When it comes to home loans, one size does not fit all.
Like many things in life, mortgages are a complicated beast, and what works for one person does not work for the next.
The good news is, we’ve got all the skills and resources to arrange the best loan structure for your personal situation and ambitions – whether you’re buying your first home, your next home, a new home or investment property……or if you’re simply looking to refinance.
Here’s a taste of what’s out there:
Fixed rate loan
With a fixed rate loan, the interest rate is set in stone for a period of between six months and five years, so you’ll know exactly how much each repayment will be. Fixed Rate Loans work well if you’re on a fixed income, and have similar expenses month to month. Did you know you can split your loan into smaller amounts with different rates to protect against rate fluctuations? You should also be aware that if you need to pay off your loan before its expiry, you’ll be charged an early repayment fee. The amount of this fee has a number of variables, which we can discuss with you.
Floating/variable rate loan
The interest rate for floating/variable rate loans can be changed by the bank or lender at any time. But, this type of loan gives you greater flexibility to make changes without penalty. If interest rates drop, your loan repayments drop, or you can reduce the length of your loan. Floating rates can become higher than fixed rates, but if rates are increasing, you can convert your loan to a fixed rate loan.
Revolving credit/line of credit
This type of loan works like a large overdraft, giving you the most flexibility in your repayments. Interest is charged daily at a floating/variable rate, so by keeping the loan balance as low as possible, you can end up paying less interest over all. This is great if you’re very disciplined with your spending. If you’re not so disciplined, you can end up paying a lot more in the long run! Revolving credit/line of credit works best for people who are self-employed, property investors, or those who are good savers.
Interest only loans
With an interest only loan, you pay only the interest owing each month, but nothing off the principle. This type of loan has a shorter term, usually from, say, one to five years. Interest only loans work well if you’re trying to keep repayments as low as possible, such as when you’re building or renovating.
Talk to us, so we can help find the right loan structure for you.