Residential Loans

Residential Loans

Standard Variable Loans

  • This facility allows you to borrow money for a set period of time (usually 25-30 years).
  • During this term you make regular repayments, based on the current interest rate. The interest rate can vary depending on fluctuations in the official cash rate, based on the Reserve Bank.
  • You can make Additional repayments without incurring any penalty. This allows you to pay off your loan earlier as well!
  • You can also have a redraw facility with this loan, which enables you to ‘redraw’ the additional repayments (if required).
  • Rates will vary according to the cash rate or lenders independently raising it.

Offset Loan

Same as standard variable but comes with a fully transactional account. The balance in this account is used to reduce the interest charge on your loan account. Operating this type of account correctly will save you thousands of dollars in interest repayments. The key is to let your own monies sit in your account for as long as possible.

Fixed Rate Loans

  • The fixed rate loans allow you to fix your interest rate for a specific period, which is usually 1-5 years. However, some lenders offer fixed terms of up to 15 years.
  • Gives you peace of mind and the certainty of knowing exactly what your monthly repayments will be regardless of any rate rises.
  • The ability to make extra repayments is limited.
  • If you had to repay the fixed rate loan facility in full prior to the expiry of the fixed term, the lender will impose additional costs, referred as Break cost of the Fixed Price Loans Contract, which could be extremely expensive as well!
  • Should interest rates fall, you’ll will still have to pay off your mortgage at the fixed rate until the end of the agreed fixed term.

Line of Credit

  • A Line of Credit is a facility that allows you access to the equity which you have built in your home or even your investment property.
  • A Line of Credit can be generally used for any purpose, but some lenders may have restrictions or guidelines attached to it.
  • It is like a credit card with a large limit. A limit is approved and set up for you to use at any time. You only pay interest for the amounts that you use. A true line of credit does not require a reduction in principal.
 

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Copyright © 2017 J.A.S.Q Investment Pty Ltd ACN 082 508 049 t/a Mortgage Zone. Australian Credit Licence Number 456786
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