With any home loan, you borrow a certain amount of money and make regular repayments to the lender.
Most home loans have common features. Before getting a home loan you should understand the following terms:
Term - is the total number of years it takes to pay off a home loan. For example, a home loan might have a 15, 20 or 30 year term. Usually, the longer the term, the lower the regular repayment amounts, but a longer term usually means that you end up paying more interest over time.
Unlike many other financial institutions, HomeStart Finance offers home loans that do not have a set loan term. Visit the HomeStart Home Loan page for more information.
Principal - the total amount of money you are borrowing.
Interest rate - this is the cost of the home loan. Generally the lower the rate the better, but you should also take into account features of the loan and hidden fees such as Lender’s Mortgage Insurance. Looking at the comparison rate on a loan is a good way to work out the cost of it, as this takes into account most associated fees and charges.