COMBINATION HOME LOAN

A combination or split home loans allows you to customize the home loan and bring together the benefits of a variable  home loan and a fixed home loan into a single  loan. You can also nominate how much of your home loan you would like to be secured with a fixed interest rate and the remaining amount on a variable interest rate.

Advantages of combination/split home loans

• Borrowers have the opportunity to hedge their bets in times of rising interest rates and gives a blend of repayment flexibility and interest rate security

• Allows you to customise the home loan and combine fixed and variable into your  home loan, for example, 80% variable rate with a 20% fixed rate

• A good solution if you are unsure of interest rate movements

• Additional repayments can be made on the variable portion of the split home loan

• Competitive fixed and variable interest rates

• Most split home loans have redraw available on the variable portion of the combination split home loan

Disadvantages of combination/split home loans

• The variable portion of the home loan is still vulnerable to interest rate rises

• If interest rates rise, repayments on the variable portion also rise

• A redraw facility may not be available on the fixed portion of the combination home loan

• You may be penalised if you pay out the split home loan before the term ends on the fixed portion of the mortgage

• Borrowers may be charged setup fees, account fees and discharge fees on both the fixed and variable portion of the home loan

• You may be charged for making higher repayments on the fixed portion of the split loan

Please use the home loan calculators including the borrowing power calculator or the split loan calculator. Alternatively, speak to one of the mortgage brokers at Intellichoice on 1300 55 10 45 for more details on the various home loan products available and whether split loans are suitable for your needs and circumstances. With access to over 35 mortgage lenders and 800 home loans and mortgage loans, the mortgage brokers at Intellichoice will find a home loan to suit your needs.

FIXED HOME LOAN

If you're worried about rising interest rates, then a fixed rate home loan will allow you to plan your finances and stick to your budget, because repayments will not change during the fixed period - usually between one to five years.

Advantages of a fixed rate home loan

• If the interest rate rise, your home loan repayments stay the same, as the interest rate is fixed for the duration of the agreed period

• Makes it easier for you to budget as you know exactly how much you need to repay each month so you can plan accordingly

• Some fixed rate home loans may allow you to make additional repayments during the fixed period and includes redraw facilities

• Many fixed rate home loans offer competitive interest rates

• Fixed home loans give you the flexibility to choose the term of the loan - between 1 to 5 years and sometimes even 10 years

Disadvantages of a fixed rate home loan

• Reduced flexibility, for example you cannot make extra repayments and thus shorten the duration of your home loan

• If interest rates fall, the repayments will not reduce, as the rate remains fixed

• Additional home loan repayments are limited, and exceeding these limits may incur break costs/fees

• Once the fixed rate expires, the interest rate will revert to the prevailing variable home loan interest rate

• Some fixed home loans may charge you for making early repayments

• Some mortgage lenders may charge hefty exit fees if you want to exit or refinance your home loan

Please use the online finance calculators, including the borrowing power calculator, loan repayment calculator or stamp duty fees calculator. Alternative, speak to one of the mortgage brokers at Intellichoice on 1300 55 10 45 for more information about the various home loan products we have available or whether a fixed rate home loan or a split home loan may better suit your needs and circumstances.

INTRODUCTORY HOME LOAN

Introductory or honeymoon rate home loans offer you a discount off the standard variable interest rate at the beginning of your home loan. The discount can be up to one percent off the standard variable rate and is usually for the first 6-12 months of the home loan.

After this period has expired, the interest rate will revert to the mortgage lender's standard variable interest rate.

Advantages of an introductory home loan 

• Offers a low interest rate usually for the first year of the home loan

• The interest rate can be fixed or variable or capped

• During the honeymoon period, the interest rate cannot go higher, but it may go lower if the mortgage lender's standard variable interest rate falls

• Repayments made at introductory rates can reduce the principal quickly, as there is less interest charged during the specified period  

• An offset facility can usually be used in conjunction with an introductory home loan

Disadvantages of an introductory home loan  

• Repayments for your home loan increase after the introductory period, since the interest rate reverts to the standard variable rate

• If you have fixed the honeymoon rate and the standard variable rate decreases during this period, your honeymoon rate will not decrease

• May have early repayment fees (or exit fees) if you pay off the home loan sooner

• Most mortgage lenders will charge you a penalty if you discharge from this home loan within 3 to 4 years

• Some mortgage lenders may limit the availability of features, such as redraw facilities and extra repayments to offset the lower interest rate  

Please use the home loan calculators available to check your borrowing capacity, loan repayment calculator or stamp duty fees. Alternatively, you can speak to one of the mortgage brokers at Intellichoice on 1300 55 10 45 for more information about our other home loan and mortgage loan products and whether an introductory home loan is suitable for your circumstances.

BASIC VARIABLE HOME LOAN

Basic variable home loans only cover the basic home loan features without the bells and whistles. However, it does offer lower interest rates than a standard variable home loan. Basic variable home loans are usually quite popular with first home owners who don't need all the features of a standard variable home loan, but want a competitive interest rate.

Advantages of a basic variable home loan

• Lower interest rate than standard variable home loans

• Repayments are lower than standard variable home loans

• If interest rates drop, repayments also drop  

• Most basic variable home loan products allow the borrower to make extra repayments

• Most basic variable home loan products have terms of 25 to 30 years

Disadvantages of a basic variable home loan

• Fewer features and less flexibility

• Many basic variable home loans cannot be used in conjunction with other loans and are not portable

• You may have to pay an extra fee for additioanl loan features

• If interest rates rise, repayments also rise

Please use our home loan calculators to get an idea on your borrowing capacity, monthly loan repayments and stamp duty fees. Alternatively, speak to one of the mortgage brokers at Intellichoice on 1300 55 10 45 for more information about our various home loan products and whether a basic variable home loan is suitable for your needs. With access to over 800 home loan products and 35 mortgage lenders, our mortgage brokers will find a home loan to suit your needs.