Variable rate home loans The interest rates on loans with variable interest rates change in response to market conditions. The Reserve Bank Of Australia will respond to market conditions and sometimes forecasts by raising or lowering the official interest rates.
Your Home loan provider will then respond accordingly and pass on the rise or fall onto the borrower of the home loan.
Basic variable home loans If all you require is money to buy a home, then this is a loan for you. It a basic straight borrowing of money to purchase a home set on a variable interest rate.
It is important to shop around and find a provider that will offer you a little more, such as lower fees etc. Take advantage of Competition. Standard variable home loans Standard variable home loans generally have a higher rate of interest attached to them. However, they do allow you to make extra repayments and most often will offer you features that do not exist in the Basic variable Home Loan.
Fixed-rate loans This Loan facility allows you to retain the interest rate percentage for a specified period of time. Regardless of whether there are fluctuations of interest rates, your loan repayments will remain the same. It is possible to Split your loan, ie: set an amount to remain on a variable interest rate and set the rest to be fixed for a time to be negotiated by yourself and the provider Line Of credit A line of credit allows to have your maximum borrowing capacity approved based on the equity of your home and other assets.
You do not have to borrow the full amount but the facility is there if you wish to borrow more than your mortgage is set as. The interest rates are normally a little higher for this facility. Redraw Facility If the provider has approved a certain amount you can borrow, then this amount becomes your maximum borrowing capacity based on your assets and income. With this facility, you may borrow up to this point in the future. That is reborrowing the amount of money that you have paid off up to that point on your mortgage.