Key Facts Sheets (or as some call them, Key Fact Sheets) were introduced by the Australian government on 1 January 2012. The sheet is a document that all lenders need to be able to produce for borrowers to help them compare various loans in a more apples-with-apples comparison rather than the current fruit-salad approach.
We have noticed some increased interest in people searching for information about these sheets and we thought it would be worthwhile to expand on the subject a little. The strongest point to remember here is that making a decision based solely on comparison of Key Fact Sheets is not the way to go about obtaining your home loan.
Whilst the information in the sheet goes somewhat further than the simple comparison rate approach, borrowers should bear in mind that the interest and fees payable can still work out vastly different for two loans depending on how you “actually” end up using them despite the data on the Key Fact Sheet showing that they are very similar.
If you intend to make lots of additional repayments, or to use your loan account more like a transaction account, or even if you think you fit the profile of a “typical” borrower, you should be aware that the end result could be quite different for two “similar-on-a-key-fact-sheet“ loans. As such, comparing loans using Key Facts Sheets is a good idea to help identify and narrow down potential lenders, but it should be just one step in the process of final selection.
Unfortunately, as we all operate our loans differently, and as we all deal with changing personal financial circumstances, there is no silver bullet approach to selecting the best loan for you needs. Each option on a short list of potential lenders should be analysed in more detail by speaking to a lending manager at each lender.
There are also other factors to consider when deciding – factors not covered on the Key Fact Sheet – factors such as lender credibility, where loan funding comes from, customer testimonials and reviews, independent industry body membership, industry recognition through awards, media coverage of the lender, etc. etc.
These are all important points to bear in mind when shopping around for a loan. MyRate reviews these factors regularly and always tries to present a solid option for borrowers looking for finance. When we compare ourselves to other lenders, we think we have a great product – we hope you agree!