Standard Variable Home Loan is when the interest rate can vary throughout the term of the loan. It is most popular in Australia, if interest rates drop, repayments also drop. This product is flexible and often has more features.
Discount Variable, Honeymoon or Introductory Loans are variable rate loans with a discounted interest rate for a certain period of time, usually 1 year. There is less interest charged during the specified period and the repayments increase after the introductory period, since the interest rate reverts to the standard variable rate.
Fixed rate loans are loans where the borrower's interest rate and repayments are fixed for a set period, usually from 1 to 10 years, and sometimes longer. With this type of option borrowers have certainty of repayment amounts.
Combination and split loans allow borrowers to take part of their loan as a variable rate loan and the other part as a fixed rate loan.
Line of Credit/Equity loans provide access to funds, when required, up to the original limit set. Since it is secured by residential property, the interest rate is less than business loans, credit cards or personal loans. It requires discipline to ensure that over time the principle balance of the loans is reduced.
Low Documentation or No Documentation loans are products available for borrowers who are normally self employed or do not have tax returns or financial reports. Borrower completes a simple income declaration form. It generally carries a higher interest rate.
Specialist lenders offer Non-Conforming Loans to people who do not meet the bank's stricter lending criteria. It is a great way to rebuild a poor credit rating.
By No-Deposit Loan you can now borrow up to 106% of the purchase price of a property allowing you to also borrow the money to pay for extras such as stamp duty. You can buy property sooner without waiting until you save a larger deposit.
by Max
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