No matter whether you are buying your first or subsequent home, building your dream mansion, developing an investment portfolio, refinancing or consolidating your debts, there are a number of different home loan product types offered which can be used to serve your requirements.
This type of loan has a variable interest rate which is prone to change either up or down during the course of the loan term. Therefore when the interest rate rises your repayments increase and vice versa. With this type of loan you can generally make additional repayments with no penalties. Most lenders offer variable rate loans with a maximum 30-year term period.
This type of loan has a fixed interest rate which doesn't change during the course of the loan term. Therefore your repayments stay the same regardless of any external lender interest rate changes. There is usually a limit on the amount of additional repayments you can make and there may be break costs involved if you try to terminate the fixed rate loan early. Most lenders generally offer this type of loan for up to 5 years.
Lenders offer this type of loan to consumers as part of a variable or fixed rate loan where for a monthly or annual fee a number of features are offered. They can include a discounted interest rate for the life of the loan, transactional offset account, credit card, and the ability to have multiple loan accounts. Lenders will have various names for their own Pro Pack offerings.
This is your "no frills" variable rate loan that lenders offer at a discount to their standard rate and usually have low fees. It is generally for consumers who have a low borrowing amount. The drawback is that there are normally upfront costs involved and they lack the features that are offered with loans such as a Pro Pack.
Similar to a credit card but using your property as security, a line of credit loan allows you to use the equity in your property to access funds up to a pre-determined limit. Repayments are generally based on the interest only calculation on the balance of the loan however you are allowed to make extra payments. Lines of credit generally don't have any set term lengths but may be reviewed periodically.
This type of loan is used by consumers who are looking at building a property. As part of the application the lender will need to see a signed copy of a fixed priced builders contract and approved council plans. The loan is essentially drawn upon and paid to the builder in stages over the construction phase and as a result you only need to make interest only repayments on the drawn down balance. After construction finishes it usually reverts to a standard loan product.
Also known as a relocation loan, this allows you to purchase or build a new home while you are in the process of selling your current property. That way you get to live in your new home earlier without the worry of trying to sell your existing property beforehand as a way of obtaining funds. The bridging loan normally allows you 6 months to sell the existing property with capitalised interest permitted during that period.
This type of loan is suitable for self employed or business owners where it is difficult to substantiate their income via historical and current tax returns. Instead you are able to acquire a loan by providing alternate supporting financial documents. The drawback is generally you need a larger deposit and the interest rate is higher.