Fixed vs Variable

Young Couple Moving House

There’s a huge choice of home loans available, but to find your perfect match you’ll need to do your homework.

Basic Home Loans

Basic home loans- or “no frills loan”- offer borrowers a loan with a loan with a low interest rate. Generally a half to one percent below the standard variable rate and some times combined with minimal on going fees.

Fixed Rate Loans

Worried about rising interest rates? A fixed rate home loan will allow you to fix your interest rate for a specific period of time usually one to five years. It is a sound option when interest rates are on the rise or in times of economic uncertainty. You are restricted to making limited additional repayments through out the fixed period. But beware if rates drop you will still be required to pay your loan at the fixed rate until the specified period has lapsed. Opting to break a fixed rate can be costly.

Standard Variable Rate Home Loans

Standard variable rate home loans allow you to borrow money for a set period of time, during which you make regular repayments based on the current interest rate. The interest rate can vary depending on fluctuations in the official cash rate.

Lo Doc Home Loans

If you’re self employed, contract or a seasonal worker and do not have regular income a low doc loan may be a solution. These loans are specifically for people who have trouble verifying there income because of the irregular income. Generally the lenders have lower loan vale ratio’s LVR normally 60% of the value of the property. Lenders will normally only lend up to a certain LVR. Borrowing capacity is restricted because of the risk.

Split Rate Home Loans

If you want the best of both worlds, a split rate home loan offers a combination of both flexibility and security. Split home loans allows you to customise your rates as you see fit. It gives you some protection for rising interest rates but gives you flexibility to make extra repayments

Interest Only Loans

Interest only loans offers borrowers lower repayment options, while maintaining many of the traditional loan features.
This type of loan allows you to pay the interest component on a mortgage. It does not reduce the principal component. They are a popular choice for investors looking for capital appreciation on their investments

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