Which home loan could suit you?
Making yourself familiar with a few of the popular products available will give you a strong head start when discussing your loan options with us.
Here are just a few of the product types you're sure to come across:
BASIC HOME LOANS
basic home loans - or 'no frills' loans - offer borrowers a loan with a low interest rate. A popular choice among first home buyers, a basic home loan's interest rate is often half to one precent below the standard variable rate, which is sometimes combined with minimal ongoing fees. Drawbacks include limited features, less flexibility, and additional charges if you decide to switch loans or pay the loan off sooner.
FIXED RATE HOME LOANS
Worried about rising interest rates? A fixed rate home loan will allow you to fix your interest rate for a specific period, usualy from one to five years. It's a sound option when interest rates are on the rise or in tmes of economic uncertainty. Should interest rates plummet, however, you'll still have to pay off your mortgage at the fixed-rate until the end of the agreed period.
STANDARD VARIABLE-RATE HOME LOANS
Considered a popular mainstream choice, standard variable-rate home loans allow you to borrow money for a set period of time, during which you make regular payments based on the current interest rate. The interest rate can vary depending on fluctuations in the official cash rate.
LOW DOC HOME LOANS
If you're a self employed, contract or seasonal worker and do not have a regular income a low doc loan may be a solution.
While making homeownership a possibility for a cross section of Australian workers which previously found it difficult to secure a mainstream bank loan, most low doc home loans typically have higher interest rates. Your lender may also require you to take out Lenders Mortgage Insurance in order to secure a loan.
SPLIT-RATE HOME LOANS
Want the best of both worlds? A split-rate home loan offers a combination of flexibility and security.
A good product for both first time and existing borrowers, split loans allow you to customise your loan's interest rate as you see fit: fixing the rate on a portion of your loan to give you some certainty to part of your monthly repayments but also flexibility for the balance of your loan that is on a variable-rate.
INTEREST-ONLY HOME LOANS
Interest-only loans offer borrowers lower repayment options, while maintaining many of a traditional loan's features.
This type of loan allows you to pay only the interest component. They are a popular choice for investors looking for good capital appreciation on their investments.
