Fixed Rate Home Loan

A fixed interest rate home loan is usually taken out for an agreed period of time between 1-5 years. When this ends, you can re-fix again or you will automatically roll over to variable. It basically ensures that your interest rate, therefore repayment, stays the same over a certain period of time so you are not subject to changing repayments if the bank is raising or lowering their interest rates.

Variable Rate Home Loan

A variable rate home loan is subject to changes in interest rates. If the Interest rate rises, so will your repayments. However, if the interest rate reduces, so will your repayments. You also have the ability to pay extra into the loan without being penalized, unlike a fixed rate loan where there can be restrictions.

Split Rate Loans

Your loan amount is divided into two parts, part one being fixed rate, part two being variable rate. An added bonus is you can decide how much of the loan amount is fixed or variable, all while having the flexibility and options of a variable loan as well as the comfort and consistency of the fixed portion.

Interest Only

This way you only pay the interest on the amount borrowed. Most lenders have this available for between one and five years.

Because you’re not also paying off the principal, your monthly repayments are lower.

At the end of the interest-only period, you begin to pay off both interest and principal. These loans are especially popular with investors who plan to pay off the principal when the property is sold, having achieved capital growth.

Introductory/Honeymoon

Traditionally designed for First Home Buyers, however it is now more widely available. This is typically an initial 6 to 12 month period where by the rate offered is extremely appealing however automatically reverts to variable at the end of the initial honeymoon term.