Residential

A traditional loan for owner-occupiers. It is most suitable for borrowers who require a flexible loan with all the features whilst still receiving a competitive variable or fixed interest rate.

Through our own products and accreditations, we have access to all the major banks, non-bank Lenders, and all the major non-conforming Lenders in the country.

What we are providing that no bank can provide, is a personal commitment to take the stress out of your home loan process. We provide our clients with a holistic advice that look at their total financial needs, which will bring them better benefits in the medium to long term. We will be your one-stop centre for all advice in relation to your home loan application. We also provide a dedicated relationship manager to deliver follow-up service and advice, to ensure that you understand how your mortgage works.

Preferably, residential home loan products should attract no ongoing fees at all, apart from the Professional Package loans which may attract a lower interest rate to compensate. Another desirable feature to have on variable interest loans is you can pay extra and redraw it for free at any time. The types of loans for owner occupiers are:

Standard Variable Home Loan

Standard Variable Rate loans are the most popular type of loan, are based on the official Reserve Bank rate and, as the name suggests, will vary with time depending on the market. If rates go up so will your repayments and vice versa if they go down. This type of loan is traditionally the most flexible and may include optional features such as the ability to make extra repayments, to redraw funds or to split your loan, just to name a few. It may also be possible to incorporate an introductory discounted rate with this type of loan. Introductory rates are usually effective for the first 12 months of the loan, at which it then reverts to the standard variable rate for a prescribed period.

Basic Variable Home Loan

Basic Variable Rate loans are sometimes referred to as 'no frills' loans. They generally offer a lower interest rate but with less features than a standard variable rate loan, and in some cases, more restrictions. If you require extra flexibility you may have to pay for it. As with all variable rate loans, the interest may be increased or decreased according to the market. If you are a budget conscious borrower, this may meet your needs.

Fixed Rate Home Loan

If the certainty of set loan repayments appeals to you then perhaps a Fixed Rate loan is just what you need. Fixed Rate loans are based on a set term and interest rate, anywhere from 6 months to 10 years. This provides some level of security but does not allow the reduction of repayment amounts should official interest rates fall. Once the fixed rate period is finished the rate will usually revert to a variable rate unless you decide to rollover for another fixed term. These loans can be combined with variable rate products to provide a mix of security and flexibility. For example 60% of your loan could be a standard variable loan whilst the remaining 40% could be fixed

Split Loan

If you are concerned about interest rates rising, but dislike the inflexibility of a fixed rate loan, you can get the best of both worlds with a Split Variable/Fixed Loan. You get the advantage of features like accelerated repayments, redraw and mortgage offset, without exposing your entire loan to fluctuations in interest rates. How you split the loan is normally up to you but 50/50 or 60/40 splits are the most common. Be aware that penalties apply if you break the fixed portion of the loan early.

Introductory or Honeymoon Rate Home Loans

These types of loans offer a low interest rate usually for the 1st year of the loan. The rate may be fixed, variable or capped, meaning that if interest rates rise your rate will not go up, but if rates fall that rate will go down and you will benefit. Once the Introductory or Honeymoon period is finished the interest rate usually reverts to the standard variable rate. The advantage of an Introductory Rate is that it offers borrowers a chance to reduce the principal quickly by making extra repayments. The main disadvantage is that most banks charge penalties if you discharge these types of mortgages within in first 3-4 years after settlement.

Line of Credit/Equity Home Loans

Line of Credit, also known as Equity Lines or Revolving Credit, works more like a credit card and provides increased flexibility. The lender assigns you a credit limit secured against your property, and when you need cash you draw against that limit, usually by writing a cheque or using a special debit card. As you pay back the loan (the terms of repayment vary), the money becomes available to you again. Line of Credit loans usually attract a slightly higher rate of interest than a loan where the balance is continuously reducing. One of the biggest advantages of a Line of Credit is that you always have ready access to money, which makes this type of loan attractive to investors.

Low Doc Loan

Low Doc Loans are useful for borrowers who are unable to substantiate their level of income using conventional documentation required by most lenders or for borrowers who may have complicated financial structures. They are typically designed for people with special needs, and allow borrowers to forego the time and effort of culling tax records, bank statements, brokerage reports and other documents in order to obtain finance.

There are many variations on these types of loans, and it is a good idea for potential borrowers to find a program that meets specific asset or income requirements. Some low-doc mortgages allow customers to simply "state" their income by filling in a blank on the application. Others go so far as to not require any information about income, assets or even existing debt.

Each step down the ladder requires the borrower to put either more money of their own into the transaction or accept a higher interest rate. Many Low Doc products these days give borrowers the option to switch back to a conventional variable rate product after a set period of time without the need to show full financial statements, provided that they have maintained a good credit history during the Low Doc period.

Non-conforming Home Loan

Non-conforming loans are designed for borrowers that do not meet 'standard' bank criteria and may include seasonal or contract workers, non-residents, small or no-deposit holders or even those with a poor credit history. This type of loan may also be suitable if you wish to borrow 100% of the property value. In most cases non-conforming loans attract a higher rate of interest.

Professional Package Product

Most banks offer a discounted rate to a variety of borrowers. This discount is usually a set percentage off the standard variable rate or a line of credit, with just a few banks offering discount to their fixed rate products.

The criteria for qualifying for a professional package varies form bank to bank, as do their tiers of discounts. The majority of lenders now base their criteria on the size of your loan - with discounts starting for loans greater than $150,000 with a limited number of banks. For loans greater than $500,000 most lenders will now discount their standard variable rate products by 0.5%.

Professional rate products are hard to beat if you qualify. They provide you with a very competitive rate along with all the features most borrowers are wanting today. Offset accounts are available on all Pro - Pac loans allowing for mortgage minimisation at a cheaper rate than normal.

The primary differences from Bank to Bank on a Pro-Pac are the ongoing fee they will charge for the facility, the level of discount available and whether they will allow you to have a one year discount product rolling straight to the discounted standard variable. This last feature is not available through many banks.

If you need more information on these types of home loan products and how they suit your individual home loan needs, our mortgage consultants can help. Simply click on the Apply Now button below or email a query.