Loan Types

With so many home loan types available in the market today, it can sometimes get confusing when choosing a home loan package that'll suit your financial needs. One way to avoid confusion is to arm yourself with the right information. The Internet is a rich source of articles that can help you figure out what loan package is perfect for you. Here's a list of the basic loan types that are currently offered in the market:

Fixed loans

Fixed loans basically have fixed rates that are effective within a specific period. This means that within that given period, you won't have to deal with fluctuating rates. However, if interest rates drop, you won't benefit from it because choosing a fixed loan means sticking to a given interest rate within the specified period.

Variable loans

Interest rates that apply to variable loans can change according to several factors -- the present economic environment, the interest rate stated by the Reserve Bank of Australia, and competition among lenders. Compared to fixed loans, variable loans can offer more flexible terms when it comes to early or extra repayments.

Honeymoon loans

This kind of home loan offers lower interest rates during the starting period. After the given period, the home loan goes back into a standard variable type. When choosing this kind of home loan, make sure that you can handle the increase in payments once the low interest rate-period is over.

Split loans

Through this type of loan, you can actually divide the actual loan into several packages. the entire loan can be partly fixed and partly variable. This type of home loan is perfect for you if you wish to enjoy the flexibility of a variable loan and the security of a fixed loan.

Home Equity loans

Through this type of loan, you can use the equity in your home loan as a collateral. So if you plan to renovate your house or invest in a property, you can actually borrow against your home equity.

All-In-One loans

Through an all-in-one home loan, you can actually combine a transaction account and a home loan account into a single account.

Bridging loans

A bridging loan is perfect for you if you are trying to sell your house and buy a new one. If you can't wait for your current property to be sold, you can apply for a bridging loan that can cover the gap when purchasing a property before your current one is sold.