Home Loans Australia – Which Home Loan Suits You Best
Which home loan option is right for you ? Whatever your needs, be it your first Home Loan, Investment Property or you simply wish to Refinance your existing Home Loan, there are numerous options available and selecting the right mortgage and home loan is crucial to you and your family.
The various types of home loans currently available in Australia offer varying interest rates, functions and features, repayment options and loan structures.
Various Home Loans include:
Standard Variable Rate Home Loans
As the name suggests the interest rate can and does change frequently. This is normally dependent upon the Reserve Bank of Australia (RBA) changing official cash rates. Australian banks can alter their home loan rates independently from the RBA so prior to applying for a home loan, be aware of how the market operates. Keep your finger on the pulse, because no matter what the Interst rate is the day you obtain your home loan, it will almost certainly rise and fall.
Many Home Loan Lenders, subject to the their normal terms and conditions, will have provisions to allow you to redraw surplus money in your home loan account. Additionally, Standard variable rate home loans will often have extra features such as the ability to make extra home loan repayments. The repayments on a Standard Variable Rate Home Loan can be weekly, fortnightly or monthly, depending on which repayment option suits you best.
Basic Variable Rate Home Loans
are also referred to as ‘no frills home loans’. Basic Variable Rate Home Loans come with lower interest rates than standard variable or fixed rate loans. Interest Rates for the Basic Variable may vary from a half of a percent and one per cent lower. So Home Loan borrowers must weigh up whether a slightly lower home loan rate suits their needs more than the extra features that other home loans offer.
Fixed Rate Home Loans
With a fixed rate home loan, the home loan borrower and the home loan lender agree on a fixed home loan interest rate on the home loan, the interest and the repayments remain the same for a determined set period, usually from one to five years.
Fixed rate home loans as the name implies allows borrowers to know exactly what their home loan repayments will be each and every month. A fixed rate home loan also provides protection over any interest rates rises. Conversely, should the interest rates fall, you are still locked into the agreed interest rate. Fixed Rate Home Loans set there rates for a term between one to five years. Additionally, home loan customers can elect to fix either a part of the home loan or the entire amount of the loan. Once the fixed rate home loan term ends, the loan generally reverts to a standard variable rate.
Low doc Home Loans
Low Doc Home Loans are traditionally designed for self employed people and means less paperwork than a standard home loan application.
The loan can be a fixed rate or variable rate mortgage, and can be used to borrow, up to 80% of the value of the property.
Low Doc Home Loan was created to assist those who do not meet the standard lending criteria. A low-doc loan still requires some evidence of income such as back statements or tax returns for example and of course
Lender Mortgage Insurance applies to the above.