Types of Loans Available
There are literally hundreds of different loan types out there, from dozens of different lenders. When you’re buying or building a new home, choosing the right one can be quite daunting. That’s why we put together the following loans guide. It provides a handy ‘pros and cons’ overview of each of the main loan types.
Fixed rate home loans — You pay the same interest rate for a certain number of years (usually 1-5 years). Even if the Reserve Bank increases the official interest rate, your rate remains the same. Pros & cons…
Variable rate home loans — Your interest rate goes up and down, based on the Reserve Bank’s official interest rate and your lender’s pricing. Pros & cons…
Split home loans — The best of both worlds: part fixed rate, part variable rate, and you select how much you want to allocate to each part. Pros & cons…
Low-doc home loans — Ideal if you’re self-employed and don’t have all the financial documents (tax returns, financial reports, etc.) normally required to get a loan. Pros & cons…
Line of credit home loans — A great way to access the equity in your home and use it for things like renovations, investments or other personal purchases. It’s a bit like having a credit card with a big limit, but your home acts as security for the loan. Pros & cons…
Construction loans — Designed for people who are building a new home, a construction loan is an interest only loan on the value of the land, which increases in stages as your home gets built, then usually converts to principle and interest on completion. Pros & cons…
Home to home loans — If you’re buying or building a new home before selling your old one, a home to home loan means you don’t have to pay two mortgages at once. Pros & cons…
Guarantor home loans — Very helpful if you’re a young home buyer. Instead of paying a deposit on your loan, you can get someone else (e.g. your parents) to put up their property as security. Pros & cons…
Still got questions about loan types?
If you have any questions that aren’t covered above (in fact, even if they are!), please feel free to give us a call on 1300 883 292, or simply fill in our enquiry form below, and we’ll call you.
