More warnings, this time from comparison site Mozo on the risks of borrowers grabbing the “cheap” special mortgage offers which are flooding the market at the moment.
Aussie lenders are luring prospective home loan customers with competitive introductory rates, but these could cost you thousands in unnecessary interest over the long run, according to recent Mozo research.
Crunching the numbers in the Mozo database, we found that homeowners could pay as much as 174 basis points more when the ‘honeymoon period’ on their home loan ends.
In fact the research revealed that the average homeowner with a $300,000 home loan could end up paying as much as $3,423 in additional interest charges each year if they’re caught taking the introductory rate bait.
But this can become an even more costly error when you consider how much extra interest you could end up paying over the life of the loan, said Mozo Director, Kirsty Lamont.
“If borrowers fail to check the fine print they can end up stuck with a loan that has an uncompetitive ongoing rate after the introductory period ends,” she said.
“That mistake can end up costing you tens of thousands of dollars in extra interest over the term of the loan.”
