1 The Honeymoon Rate  

You will be instantly attracted by the interest rate offered for the first year of your loan term. The honeymoon period does not last. The rate will usually revert to the Standard Variable Rate after the first year, which could be costly in an increasing rate market. There are often heavy penalty costs if you want to leave the relationship, and there are usually monthly account keeping fees too.

2 The Fixed Rate Loan  

If you opt for a Fixed Rate Loan you may be penalised for making higher repayments or paying it off in lump sums.  Substantial penalties may also apply if you pay off your loan before its due date.

3 The Split Loan  

If you split your loan and have part fixed and part variable, some lenders charge you set-up fees, account fees and discharge fees on both portions of the loan.  

4 The Wrong Loan  

A Line Of Credit Loan may be the wrong one for you. It is like a credit card and if you are undisciplined you may find yourself in financial strife.  

5 Upfront Costs  

Some lenders charge you an ‘all up’ establishment fee, which includes the banks’ legals, an application and a valuation fee. Others add ‘security costs’ as an ‘upfront fee’ and then boast that they give you no on-going fees!  

6 Loyalty to a Current Lender

New borrowers will probably get a better deal than you.  

7 Exit Costs  

When you pay out a loan, watch for the exit costs. The lender may charge you legal and preparation fees to discharge your mortgage, and some even sneak in a service fee.  

8 Paying for the Bells and Whistles’ Loan

Yes, you do pay for what you get. The more flexibility you get the higher the cost. Do you really need a re-draw facility? It could cost you a 0.5% premium and you’ll have to pay a fee for the privilege of getting your money back! On a loan of $150,000 over 25 years it could cost you $13,000!  

9 The Package Deal

Some lenders offer banking packages and discounts which may reduce the cost of your everyday financial needs or provide significant discounts to certain groups. So shop around.  

10 Not Seeking the Right Advice  

With access to a large panel of lending institutions and an extensive range of loan products, your Wealth Concerns Finance Consultant will listen to your needs, thoroughly explain all the options, and help you to choose the right loan for your requirements. What’s more, because the lender you choose pays us, we do not charge for our service, although other fees may apply.