Types of Loans

Choosing the Right Loan

There are various types of home loans, all offering different rates and features. It is vital that you always check the terms of your loans. Our role as your mortgage specialist is to provide you with comparisons of various loan options from a panel of lenders, and assist you with choosing the right loan for your circumstances. And if you are ready to apply now, feel free to submit your information to us.

Fixed Rate Loans

These loans are set at a fixed rate for a specified period - usually one to five years. Repayments do not rise or fall with interest fluctuations throughout the specified period. At the end of the term you can lock in another fixed rate, switch to variable or go for a split loan. These loans may have limited features and lack the flexibility of variable loans. There may be early exit fees and limited ability to make extra payments.

Split Loans

Splitting your home loan marries the flexibility of a variable rate loan with the stability of a fixed rate loan to reduce the impact of any interest rate changes. Split loans are especially popular when interest rates are increasing. By splitting a loan, borrowers can be protected against the risk of higher rates. If interest rates increase the fixed portion repayments will remain the same but the variable portion repayments will increase. But if interest rates decrease then the variable portion of the loan will be repaid faster. The loan can be divided equally or split into different amounts, eg 60% fixed and 40% variable.

Split loans can be customised to take advantage of the various features that different loans have to provide. The features available with this type of debt make it particularly attractive for first time borrowers.

Loan Consolidation/Refinancing

Debt consolidation is a process where all of your debts are rolled together into a single loan.

Debt from personal loans and credit cards can be incorporated into your mortgage at a much better interest rate as home loans tend to have lower interest rates than other forms of credit. Consolidation will reduce your interest rate overall, and in this way save you money. Consolidation of your debt into your existing mortgage is most effective for larger amounts of money and should reduce the amount of your monthly payment. It also has the advantage of only having to make one payment per month.

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