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residential loans

Residential Loan Options

Some of our Loan Options

Standard Variable Home Loan

A fully featured loan with the interest rate set at a margin above the cash rate set by the Reserve Bank of Australia from time to time.  Loan repayments may move upward or downward in line with rate movements.  Many people who walk into bank branches for home loans come away with this product.  This loan comes with many bells and whistles, but frankly they are probably paying too much for their money.

Basic Variable Home Loan

This loan generally has fewer features but comes with an interest rate that is discounted by at least 0.5% p.a. against the standard variable rate.  This discount affords the borrower the opportunity to repay the loan at a faster pace, or benefit from a lower minimum monthly repayment.  Most lending institutions provide sufficient capabilities with their basic product to allow the borrower the capacity to make extra repayments and to access those funds if required.
This product can be the most flexible in the market, however the flexibility varies between lenders. Banks often place a small premium on the interest rate to these loans.

Fixed Rate Home Loan

By fixing a loan interest rate you are not vulnerable to interest rate changes over the fixed rate period.  Many banks offer fixed rates over terms of up to 15 years.  These loans are often suitable to borrowers or investors looking to hold property for a minimum period before considering resale.  Upon expiry of the fixed rate period, borrowers may elect to re-fix the rate for a further term of their choice or move to a variable rate product.

Detracting features may include:

  • Limited ability for extra repayments
  • Potential for substantial penalties upon lump sum/early repayment in full
Split Loan

Borrowers are often given the option to split their loan into a fixed rate portion and a variable rate portion.  This strategy can allow the borrowers to take advantage of the security of the fixed rate option and the flexibility of being able to reduce the variable portion without penalty at the borrower’s own pace.  Investors may opt for a split loan, choosing an ‘interest only’ product for their investment loan split, leaving their owner occupied loan as principle and interest.

Introductory or Honeymoon Rate Home Loan

These loans come with a substantially reduced interest rate for an introductory period of usually 12 months. After the introductory period the interest rate usually reverts to the bank’s standard variable rate.  This is often a great option as long as you can switch to a basic loan or

Revolving Line of Credit

A loan limit is set by the bank at time of approval. The borrowers can make deposits and redraw up to the approved limit throughout the life of the loan.

These loans became very popular in the 1990’s through financial advisors. They offered strategies to reduce home loans at a faster pace using the borrower’s full cash flow to work against the debt, rather than just a regular fortnightly repayment.

This product can be the most flexible in the market, however the flexibility varies between lenders. Banks often place a small premium on the interest rate to these loans.

Low Doc Loan

Sometimes it is difficult to provide the lender with all the financial documentation it needs to assess capacity to repay a loan. In many circumstances the lender will agree to accept the borrower’s word for how much income they receive, allowing the loan application to proceed to approval and settlement.

Most lenders have their own specific requirements with regard to these loans, and pricing can vary dramatically, so it is imperative that an applicant uses the services of a specialist if considering a low doc loan.

RELOCATION Home Loan

This loan product allows the borrowers to purchase their new home before they have sold their existing property. This affords them the opportunity to get the ideal home they may have found, relocate at their own pace, and be under less pressure to accept an offer on their property that they are not entirely happy with.

Some or all of the interest can be capitalized to the loan account throughout the sale process, thereby not unduly affecting the borrower’s cash flow over that period.

No Deposit Home Loan

This loan is primarily available to people who have strong stable incomes but have yet to put together enough savings to qualify for a more traditional home loan. Establishment costs are higher, but that often does not matter to buyers in a rising property market who wish to enter it as soon as possible.

Equity Finance Mortgage

An equity partner may be prepared to provide up to 20% of the purchase price of a home to allow a potential buyer to enter the property market, or to buy a property that they might not normally be able to afford. This equity partner charges no interest, but asks for a share of any capital gain made upon resale of the property.

This is a recent entrant to the myriad of options available so is relatively unknown, but should definitely be considered by many who are considering a purchase.

Professional Package Products

Banks are happy to offer reduced interest rates and other product benefits to clients looking to borrow larger amounts. To get full advantage the loan amount should exceed $250,000.00. A package fee is charged monthly or annually but can easily be justified by the interest rate reduction, often up to 0.7 % p.a. off the standard variable rate. These packages are always fully optioned and flexible.