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Finder’s home loans methodology
Here's how we determine our monthly best home loan picks by selecting the types of loans suitable for typical borrowers and then evaluating these loans based on interest rates and fees.
Every month, Finder examines the loans in our database and determines our best home loan rates for Australian borrowers. We select loans from our partner lenders, analysed according to a comprehensive, data-driven methodology.
Finder's best home loan categories
We find the best home loans for the following types of borrower:
First home buyers
Borrowers looking for their first loan to buy a home.
Refinancers
Existing borrowers looking to switch to a better deal.
Investors
Property investors looking for a better investment loan.
To ensure all our home loan picks are suitable for a typical borrower, we filter the loans in our database using the following criteria:
Loan purpose. We do not consider investor loans when looking for the best home loan for first home buyers or refinancers (and vice versa).
Loan-to-value ratio (LVR). A loan's LVR shows how much you can borrow relative to your deposit. A standard deposit is 20%, so a standard LVR is 80%. For first home buyer picks, we only consider loans with LVRS of 90% or higher, meaning borrowers can get these loans with smaller 10% deposits. Refinancers, who have built equity, can get loans with much lower LVRs.
Loan amounts. We filter out loans with unusually low maximum loan amounts to ensure our home loan picks are loans most borrowers can actually use.
Rate type. We filter the home loans into variable and fixed interest rate categories to make a fairer comparison.
While we examine 100s of home loans in our database, our best home loan picks are taken from lenders with whom Finder has a commercial partnership.
Our lenders represent a wide range of market participants, including banks and smaller online lenders.
Methodology
Once we've selected the eligible home loans we rank and score them according to 2 key factors:
Interest rate
The lower the interest rate, the lower your loan repayments and the less interest you pay. This is the number 1 factor we consider when determining our best loans.
Loans with the lowest rates receive a higher score.
Loan fees
A home loan's fees can really add to a borrower's costs. We add up the upfront fee costs for each loan, including application, settlement, and valuation fees, plus ongoing monthly fees.
Loans with the lowest total fees receive a higher score.
We use a weighted methodology that puts more emphasis on the interest rate than the fees. This reflects the fact that the interest rate has a much greater impact on a borrower's overall loan costs.
In-depth methodology for each home loan category
We apply the same basic principles for each best home loan category, but the selection criteria and methodology differ slightly for each category.
Selection criteria
Loan purpose: Owner-occupier.
LVR: 90% or higher.
Rate type: Variable rate.
Repayment type: Principal-and-interest.
Methodology
Scores are determined by:
The interest rate (the lower the rate, the higher the score.
Combined cost of multiple loan fees (the lower the total cost, the higher the score).
Selection criteria
Loan purpose: Owner-occupier.
LVR: 90% or higher.
Rate type: Fixed rate.
Repayment type: Principal-and-interest.
Methodology
Scores are determined by:
The interest rate (the lower the rate, the higher the score.
Combined cost of multiple loan fees (the lower the total cost, the higher the score).
Selection criteria
Loan purpose: Owner-occupier.
LVR: 60% or higher.
Rate type: Variable rate.
Repayment type: Principal-and-interest.
Methodology
Scores are determined by:
The interest rate (the lower the rate, the higher the score.
Combined cost of multiple loan fees (the lower the total cost, the higher the score).
Selection criteria
Loan purpose: Owner-occupier.
LVR: 60% or higher.
Rate type: Fixed rate.
Repayment type: Principal-and-interest.
Methodology
Scores are determined by:
The interest rate (the lower the rate, the higher the score.
Combined cost of multiple loan fees (the lower the total cost, the higher the score).
Selection criteria
Loan purpose: Investor.
LVR: 80% or higher.
Rate type: Variable rate.
Repayment type: Principal-and-interest.
Methodology
Scores are determined by:
The interest rate (the lower the rate, the higher the score.
Combined cost of multiple loan fees (the lower the total cost, the higher the score).
Selection criteria
Loan purpose: Investor.
LVR: 80% or higher.
Rate type: Fixed rate.
Repayment type: Principal-and-interest.
Methodology
Scores are determined by:
The interest rate (the lower the rate, the higher the score.
Combined cost of multiple loan fees (the lower the total cost, the higher the score).
Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification.
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