Home loans / mortgages
Home loans are so varied it’s difficult for one person to research them all. There are many different features which may or may not suit you. The following outlines some of the basics you may come across as you search for the ideal loan.
Types of home loans
This means your interest is set at a certain rate for a defined period. Normally, you can fix your interest rate for up to 10 years. Generally:
- you know exactly what your repayments will be for the period the loan is fixed
- your repayments are unaffected by interest-rate rises and falls during this period
- your mortgage will revert to the standard variable rate when the fixed period is over
- you pay fees for early exit and there may also be charges for making extra repayments or making changes to the loan during the fixed interest period and there may be limits to the additional repayments that you can make.
Standard variable rate
This means your interest rate can vary depending on market conditions (for example if the official rates set by the Reserve Bank change). Generally:
- you can make additional repayments of any amount as often as you want without early repayment fees
- you can pay off the entire loan early without early repayment fees (though, some institutions may charge a deferred establishment fee if you pay out your loan within up to five years)
- you can access (or redraw) additional loan repayments if you need them.
You can split your loan so that part is fixed and part variable. Generally:
- You will have flexibility over the variable portion of your loan and can make extra repayments when it suits you and access those funds if you need them
- The interest rate for the variable portion of the loan will fluctuate with the changes in official interest rates
- You will have less flexibility over the fixed portion – fees may apply if you pay the loan out early and there may be limits to your ability to make additional repayments, but your interest rate and repayments are set.
Our partner ANZ is Australia’s most awarded home loan lender and offers a range of Home loans and has home loan specialists who will work with you to determine the right ANZ loan for your situation, find out more.