Product Types

BASIC HOME LOAN
This loan is considered a no frills loan and often offers a very low variable interest rate with little or no regular fees. Be aware that they usually don't offer additional extras or flexibility in paying extra on the loan or varying the repayments.

INTRODUCTORY OR HONEYMOON RATE
This loan is attractive as it offers lower interest rates than the standard variable rates for the initial (honeymoon) period of the loan (i.e. 6 – 12 months) before rolling over to the standard rates. The length of the period depends on the lender, so too does the rate you will pay once the honeymoon is over. This loan usually allows flexibility by allowing you to pay extra off the loan. Beware of any caps on additional repayments in the initial period, of any exit fees at any time of the loan (usually high if you choose to exit immediately after the honeymoon period), and what your repayments will be after the loan rolls over to the standard interest rate.

REDRAW FACILITY
This loan allows you to put additional funds into the loan in order to bring down the principal amount and reduce interest charges, plus it provides an option to redraw the funds you put in at any time. Simply put, rather than earning (taxable) interest on your savings, putting your savings into your loan saves you money on your interest charges and helps you pay off your loan faster. Meanwhile, you are still saving for the future. The benefit of this type of loan is the interest charged is normally cheaper than the standard variable and is doesn't incur regular fees. Be aware that there may be an activation fee to obtain a redraw facility, there may be a fee each time you redraw, and it may have a minimum redraw amount.

PROFESSIONAL PACKAGES
Professional Packages Home Loans are designed to provide the borrower with additional benefits based on either their total borrowing amount, the applicants income, or an annual benefits fee that is paid.

The rewards can vary from interest rate discounts and savings on home and investment products. Generally speaking the discounts will remain for the life of the loan, as long as you remain a Package customer.

Professional Packages are designed with flexibility in mind. You may have the choice of a variable rate loan or the convenience of a line of credit. You may choose to combine the special discounts with the ability to pay extra and the benefit of a 100% offset account and you have a loan that helps you to own your home sooner.

Professional Packages tend to suit a higher net worth client, or someone who requires a number of sub accounts for flexibility for business and/or investment purposes.

LINE OF CREDIT/EQUITY LINES
This is a pre approved limit of money that you can borrow either in it's entirety or in bits at a time. The popularity of these loans is due to it's flexibility and ability to reduce mortgages quickly. However, they usually require the borrower to offer their house as security for the loan. A line of credit can be set to a negotiated time (normally 1-5 years) or be classed as a revolving line of credit (longer terms) and you only have to pay interest on the money that you use (or ‘draw' down). Interest rates are variable and sue to the level of flexibility are often higher than the standard variable rate. Some lines of credit will allow you to capitalise the interest until you reach your credit limit i.e. use your line of credit to pay off the interest on your line of credit. Most of these loans have a monthly, half yearly, or annual fee attached.

100% OFFSET ACCOUNTS
This account is similar to the all in one account, however the money is paid into an account which is linked to the loan – this is called an Offset Account. Income is deposited into the offset account and you use the offset account for all your EFTPOS, cheque, internet banking, credit transactions. Whatever is in the offset account then comes directly off the loan, or ‘offsets' the loan amount for interest. Effectively you are not earning interest on your savings but are benefiting as what would be interest on your savings is calculated on a reduction on your loan. The advantages are similar to an All in One Account. These loans normally have a higher interest rate and higher fees due to their flexibility.

SPLIT LOANS
This is a loan where the overall money that is borrowed is split into different segments where each segment has a different loan structure, or purpose i.e. part fixed, part variable, part line of credit, or, part owner occupied loan, part investment loan.

CONSTRUCTION LOANS
These loans are tailored to those building a home when you don't need the entire amount from the start – only pay interest on what you have spent over the stages of construction.

BRIDGING LOANS
These loans are for when the sale of an existing property takes place after settlement of a new property – when you want to buy a new property before selling the old one, where the funds from selling the existing property are paid straight into the loan for the new property.

INVESTMENT LOANS
An investment loan can comprise of any of the above mentioned product types, and is structured in a certain way, in order for it to meet the needs of an investor, e.g. flexibility, interest only, portable etc.