 Choosing the Best Loan for you
Throughout life you will spend hundreds of thousands of dollars paying off your mortgage, yet most of us spend more time seeking information and advice before purchasing household appliances than we do choosing the right home loan.
Purchasing a home is one of the single largest investments most people make in their life therefore choosing the right home loan is one of the most important financial decisions you will make.
We need to understand your needs, budget and lifestyle so we can assess what the best home loan options are for you.
There are literally thousands of different home loan products on the market, all with different rates, fees and features. Your personal situation will determine which type of home loan will best suit you.
Principal & Interest Home Loan
As the name suggests you will repay both the principal amount borrowed and the interest charged. This is the most common type of loan structure for a mortgage on the home you live in.
Revolving Line of Credit Home Loan
This type of home loan is worth exploring as it allows you to use your mortgage as a bank account, whereby all income is direct credited into the mortgage account. You use a credit card (with up to 55 days interest free) to put all household expenses on and then repay that credit card at the end of each month with a direct credit from your mortgage to clear the credit card in full, (thus no interest is charged on your credit card), while your salary has sat in your mortgage account all month, saving you interest on your mortgage.
 Interest Only Home Loan
As the name suggests you only pay the interest being charged to you. While the repayments are less than a Principal & Interest Home Loan this is often not advisable for a mortgage on the home you live in, as you will still owe the original amount of the home loan borrowed at the end of the term.
Fixed Interest Home Loan
You can choose to fix the interest rate on your home loan anywhere from six months to five years at a time. The upside to this is that you will know for the duration of the fixed interest rate period what your loan repayments will be, they cannot go up or down in that time. The possible downside to this type of loan is that if the interest rates do go down and you have fixed your rate for a longer period of time you are stuck paying the higher rate.
Variable Interest Home Loan
This means that your interest rate can go up and down as the rates offered by the banks or lenders change. A possible downside to this type of loan is that your repayments can vary from payment to payment as the interest rates change, on the upside there are very few restrictions or penalties should you chose to make changes to payments or the structure of the loan.
Capped Interest Home Loan
A capped rate allows you to have the security of knowing what your maximum repayments will be like a fixed interest home loan, but with the benefit that if the floating rate drops below the capped rate, your repayments will also drop. Like a Variable Interest Home Loan there are also few restrictions or penalties should you chose to make changes to payments or the structure of the loan.
Combo Home Loan
It is becoming more and more common to combine two or more of the above Home Loan giving you flexibility and the advantages that each loan structure offers.
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