Basic Loan

A home loan with a lower interest rate but with fewer features and benefits, often called the no frills home loan with fewer features and less flexibility than standard variable loans

Standard Variable Loan

A home loan with a standard variable interest rate is where the home loan interest rate can change depending on market conditions. The home loan interest rate is determined by the lenders but is a generally directed by the Reserve Bank of Australia cash rate. The home loan interest rate is not locked and may increase or decrease depending on the market.

Standard Variable Rate Home Loan is designed to give you full flexibility and value. It comes with a number of features that can help accommodate changes in your circumstances and help save you money.

Most Standard Variable loans offer a mortgage offset account, which makes the most of your available funds to reduce interest costs, and shorten the term of your loan:

Fixed Rate Loan

The interest rate and repayments are set for a period usually between one to ten years.
The most popular fixed-rate term being three years - which gives borrowers a sense of security with a degree of flexibility, but the choice of loan and term needs to suit your situation.
After the agreed fixed term, the interest rate will return to the Standard Variable rate unless it is fixed again.
The majority of fixed-rate home loans allow extra repayments and include redraw facilities. However, some fixed rate loans still charge you for making early repayments, which means additional prepayments above the agreed amount may attract early prepayment fees, or keep the loan for the original term and pay the full interest amount.
People whose income is not likely to vary much or who like a predictable budget will see the benefits.

Split Loans

If you like the security of a fixed rate home loan, and the benefits of a variable loan, you will get the best of both.
You can borrow some of that money on a fixed interest rate and some on a variable interest rate.

Of course, you can choose how much you allocate to each, depending on your circumstances. For instance, imagine you need to borrow $200,000.

You want repayment certainty, but you also want to be able to pay off more than your scheduled payments, or put additional funds into your 100% Mortgage Offset Account.

Usually the split is a Fixed Portion and a Variable portion.

The split can be set up at any percent eg: (60% - 40% split)

One option might be to take $150,000 at a fixed rate and $50,000 at a variable.

While the overall loan amount is considered "a total", each part is treated separately for loan contract purposes.

When you start paying off your loan, you will know exactly the amount you need to pay into your fixed rate loan and you can pay as much as you like into your variable rate loan (although you must meet the minimum monthly payments).

Features