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Standard
variable loan
Australia’s most popular type of loan, the interest
rate varies throughout the term of the loan with the
rise & fall of interest rates, They offer many features
& options such as offset, redraw & split loans
facilities.
Basic
variable loan
The basic variable loan offers typically lower interest
rates, but with fewer features than a standard variable
loan. The interest rates and repayments vary over the
term of the loan.
Fixed rate loan
Fixed rate loans protect you against interest rate changes
for an agreed time usually 1 – 5 years. By locking
your interest rate in you have peace of mind knowing
your repayments won't increase because of rising interest
rates. However, you won't benefit if rates go down during
the fixed term.
Introductory
(Honeymoon) loan
The interest rate is usually low to attract borrowers.
Also known as a honeymoon loan, this rate generally
lasts only for a few years before it rises. Rates can
be fixed or capped. Most revert to the standard rates.
Offset
Account
A mortgage offset account is simply a savings account
linked to your loan account. Unlike an all-in-one loan
that combines your credit card with your transaction
accounts, an offset account works like a regular savings
account. The big difference is that the balance in the
savings account is offset against that owing on the
mortgage. Any ‘notional’ interest on savings
is earned at the same rate as the linked loan. Over
time, savings in your offset account can help to reduce
the loan principal, allowing you to pay off your loan
sooner or build up equity.
Low-doc
loan
Low-doc or No-doc loans are a type of non-conforming
loan structured for borrowers that have little or no
documentation traditionally required to get a home loan.
These loans are ideally suited for investors or self-employed
borrowers looking to refinance, purchase or renovate.
Normally no tax returns or financial reports are required.
Line
of credit
This type of loan revolves around credit secured against
a residential property, allowing access to funds when
needed. These products are creative ways to raise funds
for investment by providing cash up to a pre-arranged
limit.
No
Deposit loan
Many lenders now approve loans of up to 100% of the
value of a property, this allows the many aspiring young
home owners to enter the market without having to provide
the 10% deposit normally required.
Interest
Only loan
These loans offer lower repayments as you are not paying
off any of the principal only the interest which make
these loans particularly suitable for investors.
Split Rate loan
Brings the benefits of variable and fixed interest rates
into a single home loan. you can choose a split rate
home loan, whereby part of the loan is on a floating
or variable interest rate and the other part is at a
fixed rate. These loans generally offer all the features
of a normal loan, however it there could be penalties
for early repayment of the fixed portion
Home
Loan Types 2
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