Home Loans Features

Basic and Standard Variable Home Loans

• Interest rate of loan will rise or fall over the period of the loan (usually following official interest rate set by Reserve Bank of Australia)
• Ability to make extra repayment without financial penalty
• Basic generally offers a discounted rate, but has fewer loan features, such as 100% offset, redraw facility and repayment flexibility

Fixed Rate Home Loans

• Interest rate is fixed for a predetermined period of time
• Repayments remain the same regardless of changes in official interest rate
• Ability to fix or switch to variable at the end of the fixed period
• Restrictions on extra repayments
• Financial penalties / break costs will be charged if loan is repaid before the end of the fixed period

Split Rate Loans

• Ability to split the total loan amount into portions of fixed and variable
• Usually the same flexibility applies to the variable portion only
• Usually the same restrictions / financial penalties apply to the fixed portion only

Interest Only Loans

• Monthly repayment excludes principal repayment
• Mainly for managing cash flow
• Popular for investors, or homeowner looking to sell property in the near future

Line of Credit

• Usually higher interest rate
• Flexible and works like a credit card / overdraft facility
• Popular with investors or homeowners looking to finance purchase at home loan rates

Low-doc Home Loans

• Popular with self-employed people, as these loans require less documentation or proof of income
• Usually higher interest rate