What type of loan is right for you?


There is an array of home loan products on the market, which is beneficial as a finance broker can tailor a loan to your needs. Below are some of the different options available.

Fixed-rate loan

The fixed rate option allows you to know the exact fortnightly or monthly repayment amount for the fixed term of the loan. Fixed terms frequently span out over 1 to 5 years. After the fixed term, the loan will typically revert to a variable rate, unless you choose to fix the rate again.

Variable rate loans

Over the life of the loan, interest rates will go up or down on a variable rate home loan. Additionally, as the interest fluctuates, so too do the repayments. If you’re comfortable with the rate that follows the ebbs and flows of the market, this may be a good option for you. Variable rate loans also allow you to make additional repayments without any penalty.

Principal and interest loans

With this product, your regular repayments pay off an amount of principal you borrowed as well as the interest.

Interest-only loans

With interest-only, you pay monthly instalments of the interest alone. These loans normally have an interest-only period of up to 5 years, throughout that time there is no requirement to make regular principal repayments, although will generally cost you more over the life of the loan.

Split home loan (fixed and variable)

You can receive the best of both worlds by choosing to have a portion of your home loan on a fixed rate and the other portion on a variable rate. Therefore, if the rates rise, part of your loan won’t cop the increase. On the other hand, if the rates go down, you will still benefit from the variable rate portion of your loan.

Redraw facility

Some lenders offer a redraw facility on variable loans, so if you make additional repayments on your loan, you have the ability to withdraw the extra funds if you need to. This facility is typically not available for fixed loans.

Land loan

This type of loan allows you to buy a block of land without the pressure of building straight away. Land loans are usually on a variable interest rate, and you can take out the loan for up to 30 years.

Construction loan

A construction loan may be a good option if you’ve purchasing land, building or renovating. Most lenders will allow you to borrow up to 90 percent of the property value.

Non-PAYG loans

If you’re self-employed, you may still be eligible for a home loan; you will just have to supply additional supporting documentation.
Financials, BAS statements and bank statements can verify your income and will highlight whether you’re able to service the loan or not.

There are plenty of different products on the market, and even more variations of options and a finance broker will aid in finding the right loan that best fits your circumstances. To learn more about what home loan will suit you, feel free to contact Accrue Equity. We will find the right fit for you.