Choosing the right home loan is not only about the rate of interest but also consideration of the loan features. Once you know how much you can borrow, you may select the home loan that gives you the best deal, which could give you a competitive interest rate as well as the right loan features. When you look for mortgages you should not only look at interest rates but also at monthly repayments and the loan period.
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Standard Variable Loan Features
Extra payments can be redrawn.
If you are in position to pay more than the minimum repayments, you can repay the loan faster. This puts you in a better position as interest rates fluctuate.
Repayments and Interest rates can change at any time.
Availability of an offset account is likely, which will reduce the interest you pay.
Variable Interest Rate Loans are used in the following situations:
’Off the Plan’ purchase loan
Building construction, personal investment
Fixed Rate loans gives you certainty of the amount you need to pay regularly, and the duration of the loan amount
Features of Fixed Rate Loan
Increase in interest rates won't affect you for the fixed term.
Budgets and finances can be planned as the repayment amount is set.
For a period of 1 to 5 years interest rates are fixed.
Offset account of partial interest may be available, depending on the lender.
Depending on lender, extra repayments can be made but the minimum repayment amount would be fixed for the period.