Why can't I have the interest rate I saw on the internet?

This is one of the most common questions we hear as finance brokers. Like most people, those looking to obtain finance will often do their preliminary research on the internet. Lenders will try to attract clients by advertising their best interest rates on comparison sites or on in advertising everywhere.

However, like everything in this life, their are always strings attached, and usually those strings are contained within all the small print at the bottom of the page. To give you understanding about some the terms and conditions associated with these "Low Low Interest Rates", here are some of the criteria you will generally need to meet

Deposit - Lenders prefer a loan to value ratio of 80% or less. This means you will need a $60,000 deposit for a loan of $300,000 plus costs.

Location - Not all lenders will lend in all locations. Lenders will have different risk profiles for different areas so your ability to borrow money for a home in the country, will often be different (read more difficult!) than if you were borrowing to buy in a capital city.

Loan Size - Often the very low rates are limited to both a minimum and maximum loan size.

Loan Purpose - Lending for the purpose of buying an owner occupied residence will nearly always attract a lot better interest rate. This is particularly relevant at the moment with many lenders raising their interest rates on investment lending in order to keep within their regulatory requirements.

So in conclusion, if you are a PAYG wage earner, looking to buy an owner occupied residence in a capital city and have a 20% deposit...or more, then no problem, you will nearly always be eligible for the lender's best interest rate.