Home Loans & Mortgages

Making sense of the mortgage maze

With so many different lenders and home loan products in the marketplace today, making a decision on the loan that is most suitable to your individual needs can be a challenging task. Listed below is an explanation of the various loan types that may help in your endeavour.

Basic Variable Rate Loans

Basic variable rate loans are extremely popular due to their low interest rates. The trade-off with these types of products is that they are limited on features.

Standard Variable Rate Loans

Standard variable rate loans are known for their flexibility and features. Partly fixing, loan splits, offset, additional repayments and redraw are usually standard with this type of product.

Fixed Rate Loans

Fixed rate loans protect borrowers against interest rate rises for a given period of time although work against borrowers when rates fall. Fixed rate loans are popular amongst investors and home owners that require a level of security when forward planning their repayments.

Combination

Combination loans allow borrowers to spilt their home loan into a partly fixed and variable portions. This provides borrowers with the flexibility of a variable rate product and added certainty of a fixed rate loan.

Equity Loans or Lines of Credit

Equity loans or lines of credit allow borrowers to unlock the equity in their properties for any worth while purpose such as renovating, investing, motor vehicles, children’s education, etc. These types of products provide a low cost option to other forms of personal lending with the flexibility of allowing interest to capitalise.

Professional Packages

A professional package can give you all the benefits of a standard variable rate loan with a discounted interest rate, in addition to some other benefits. These may include a credit card or a discount on the establishment fee. Eligibility is based on income or loan limit. Most lenders charge an annual or monthly fee for this privilege.

Low-Doc Loans

Low-doc loans are a great solution where borrowers can afford the loan repayments but are unable to disclose full income details. Low-doc loans are popular amongst self employed applicants or where they have an irregular income stream.

Non Conforming Loans

Non conforming loans are designed to benefit borrowers who do not meet mainstream lenders’ criterion. These types of loans may be the perfect solution where a borrowers’ credit history may have been impaired due to a one-off situation such as divorce, failed business, illness, or temporary unemployment.