Making sense of the mortgage maze

With so many different lenders and home loan products in the marketplace today, making a decision on the loan that best suits your individual needs can be a challenging task. Listed below is an explanation of the various loan types that may help in your endeavour.

Basic Variable Rate Loans

Basic variable rate loans are extremely popular due to their low interest rates. The trade-off with these types of products is that they are limited on features.

Standard Variable Rate Loans

Standard variable rate loans are known for their flexibility and features. Partly fixing, loan splits, offset, additional repayments and redraw are usually standard with this type of product.

Fixed Rate Loans

Fixed rate loans protect borrowers against interest rate rises for a given period of time although work against borrowers when rates fall. Fixed rate loans are popular amongst investors and home owners that require a level of security when forward planning their repayments.

Combination or Blended Loans

Combination or blended loans allow borrowers to split their home loan into partly fixed and variable portions. This provides borrowers with the flexibility of a variable rate product and added certainty of a fixed rate loan.

Equity Loans or Lines of Credit

Equity loans or lines of credit allow borrowers to unlock the equity in their properties for any worth while purpose such as renovating, investing, motor vehicles, children's education, etc. These types of products provide a low cost option to other forms of personal lending with the flexibility of allowing interest to capitalise.

Professional Home Loan Packages

A professional package offers you a range of discounts depending on the loan size.  The features include a discount off the standard variable rate, fee free transaction account, credit card with no annual fee and discounts on various insurance products.  These packages usually have an annual fee.  The main benefit to these packages is that you can have numerous loans with the discounts and only pay the one annual fee.

All In One Loans

All in one loans are everyday transaction accounts where salary and expenses are paid and withdrawn from the loan. The idea here is that by depositing your salary into your loan account and only withdrawing your living expenses as required, is that the interest charges are reduced. The trap with this type of product is that it requires a high level of discipline or borrowers could end up spending more than they should. To realise the same benefit whilst minimising the overspending risks.....we recommend a variable rate product with a 100% offset facility.

Low-Doc Loans

Low-doc loans are a great solution where borrowers can afford the loan repayments but are unable to disclose full income details. Low-doc loans are popular amongst self employed applicants or where they have an irregular income stream.

Non Conforming

Non conforming loans are designed to benefit borrowers who do not meet mainstream lenders' criteria. These types of loans are the perfect solution where a borrowers' credit history may have been impaired due to a one-off situation such as divorce, failed business, illness, or temporary unemployment.