Identifying the right type of loan for your circumstances is a key part of the Humble Abode service.
Variable Rate Home Loans
These loans have a standard interest rate usually influenced by the Reserve Bank of Australia and can move up or down depending on economic conditions. This can allow you to take advantage of any rate reduction but also allows exposure to rate rises. Repayments will move up and down accordingly.
Fixed Rate Home Loans
These loans have a pre- determined interest rate for a set period, usually 1 to 5 years which is locked in for that time. Once this period has expired the interest rate will revert back to the prevailing variable rate. This removes the risk of any rate rises but does not let you take advantage of any reductions. Repayments will be set for the fixed rate term.
A split loan allows you to have the best of both the variable rate and fixed rate option. A portion of your loan can be locked in whilst the remaining balance can be exposed to the variable rate.
These loans provide an introductory discounted rate for a short time (usually up to a year). After this period they will revert to the standard rate. This loan helps to assist in reducing the principal of the loan quickly during that term and hence reduce your interest.
On a variable home loan with a redraw facility you are able to make additional/increased repayments to your loan. These additional payments can later be redrawn should they be needed. Over time, the additional payments can significantly reduce the term of your home loan, assuming that you do not utilise the redraw option.
Line Of Credit
A line of credit is an all in one account. A limit is placed on a transaction account which allows you to use the account for salary, BPAY, EFTPOS and day to day transactions. Interest is charged monthly and the balance should not exceed the limit. This allows great flexibility and can reduce the interest payable each month.
100% Offset Loans & Accounts
This allows your home loan to be linked to a normal transaction account. The balance of this account is offset against your home loan balance prior to interest being calculated on your loan. This allows you the flexibility of having the money available should it be needed but also reduce the interest on your loan.
Lo Doc Home Loans
Lo Doc (or No Doc) home loans are loans designed for borrowers who cannot meet the usual criteria for home loans. They are usually suited to self-employed applicants and investors who have unstable income streams and no financial statements. Interest rates are usually higher due to the lack of documents.
Interest Only Loans
A standard home loan has principal and interest repayments. That is you are paying both the interest and part of the principal with every repayment. An interest only loan allows you to only repay the interest charged each month. This will reduce your monthly repayments however your loan will not steadily reduce over the term. This option is usually considered for investment purposes.