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Home Loan Types Available In AustraliaChoosing the right home loan can save you money and help you own your home faster. And, if you know who to talk to, getting a loan that suits your needs and budget is easier than it seems. A good mortgage broker can negotiate with the lenders on your behalf to help get a home loan that matches your individual requirements. More Product Information on Home Loan TypesThe following home loan types descriptions will give a basic idea of what each product offers. Terms and conditions for various loan products will differ from lender to lender and may be affected by your circumstances. To get a better idea of which specific loan product is in your best interest, call us on 13 LOAN (or +61 2 90188417 for international callers) or email us the form on this page and we will contact you within 2 business hours. Standard Variable Home LoanStandard Variable Home Loans are considered the most popular home loans in Australia becuase they are flexible with the added benefit of extra home loan features. The interest rate is also not locked in as it moves up and down in line with the Reserve Bank of Australia's interest rate fluctuations. Basic Variable Home LoanBasic Variable Rate Home Loans are sometimes referred to as 'no frills' loans and tend to offer a lower interest rate than Standard Variable Home Loans. However, Basic Variable Home Loans offer fewer features and less flexibility than standard variables. In general, if you require extra flexibility (such as a redraw facility) you may have to pay for it. Fixed Rate Home LoanThe security of having set loan repayments irrespective of interest rate fluctuations is why many Australians opt for Fixed Rate Home Loans. Variable rate products are still more popular in Australia, but fixed rates are gaining popularity. Fixed Rate Home Loans are based on a fixed rate for a set term, usually between six months and 10 years. Combination or Split Home LoanCombination or Split home loans offer security from potential rate rises by allowing borrowers to take part of their loan as a variable rate and the other as a fixed rate. While each part of the loan is treated separate when the loan contract is drawn up, the overall loan amount is still considered your “total”. No Deposit Home LoanIf you have good cash flow (a good income) but low equity (deposit), you may want to consider getting a No Deposit Home Loan. These loans allow you to borrow up to 95% of the purchase price and are available for both new and established housing, either owner occupied or investment. Introductory or Honeymoon Rate Home LoansIntroductory or Honeymoon rate home loans offer a low interest rate for an introductory period, usually for the first year. An introductory rate may be as much as one percentage point below the standard home loan rate and could be fixed or variable. All-In-One Home LoanIf you are looking to decrease your interest charges by combining all your banking transactions with your home loan, then you should consider an All-In-One Home Loan. These Loans are essentially a transaction account and a home loan combined. They allow you to directly credit your salary or other income to the account and then withdraw your funds via ATM, EFTPOS, linked credit card or cheque book, as you need it. Line of Credit/Equity Home LoansLine of Credit (LOC), also known as Equity Lines or Revolving Credit, works more like a credit card and provides increased flexibility. The lender assigns you a credit limit secured against your property, and when you need cash you draw against that limit, usually by writing a cheque or using a special debit card. Low Doc LoanTypically used by the self-employed or borrowers with no financial reports, Low-Documentation (Low-doc) and No-Documentation (No-doc) Home Loans require very little or no documentation to get approval. Rather than produce payslips, tax returns or other proof of income, the lender would ask that you state your income - a process called self-verification. Bridging Home LoanCoordinating the sale of your current home with the purchase of a new property can be complex, and for some people create considerable pressure. One way you can minimize pressure, including not being forced to sell your existing home at a lower price, is to use a Bridging Home Loan. This is a temporary loan providing financial cover which allows you to buy or build your new property before you sell your current home. Non-conforming Home LoanQualifying for a home loan can be difficult, particularly if you are close to retirement, are a seasonal or contract worker, non-resident, small or no-deposit holder or have a bad credit history. If you fall under any of these categories, you may want to consider a Non Conforming Home Loan. Professional Package ProductIf you are borrowing more than $150,000 you might be able to get a discounted interest rate with a Professional Package. The amount of the discount will usually be dependant on the loan amount - the bigger the loan amount, the bigger the discount. Reverse MortgagesReverse mortgages allow you to borrow cash against the value of your home. No repayments are required during the term of the loan, instead the interest and other charges you would ordinarily pay are added to the loan balance, which becomes payable either by the estate of a deceased borrower, when the borrowers leave the property and move into care or sell the property. Construction LoansA Construction Loan will usually help you purchase land and build a home, or construct a home on land already owned. Construction loans may also be taken out to effect extensive structural renovations on existing properties. The loan is drawn down in instalments to pay the builder, and during construction the repayments are interest only, payable on the amount of loan that has been drawn down. More information or helpFor confidential assistance with your home loan or to talk to your local mortgage broker, call us at any time on 13LOAN or call our direct line on +61 2 9018 8417. |
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