MY HOME LOAN TYPE GUIDE

When buying a home or investment property you may require a certain type of home loan structure.

We have compiled a guide that provides you with some general categories to help you differentiate between the many home laon types available in the market place.

Combination Split Loan: This type of facility offers maximum flexibility. It may be used for investment property loans and owner occupation type loans. It gives you the benefit of using features of different loan structures as a combination to meet with your changing circumstances and needs. With available structures: Variable Rate Loan - principle and interest repayment or interest only option. Can accept additional repayments at any time. Many of such loans are also offered with re-draw option. The rate is based on the standard variable market rate. This rate is subject to change up or down depending on the economic conditions. Fixed Term Interest Rate Loan - interest only repayment or principle and interest option. Available for 1 year, 2 years, 3 years and 5 year terms. Each fixed term has a different interest rate. Once you lock in a fixed rate loan the interest rate is guaranteed until the expiration of the fixed term. It is not subject to economic conditions or changes in interest rates. You know exactly what your repayments are going to be for the next few years. There are usually break costs associated with this product if repaid earlier that the fixed term period. Line of Credit - with interest only repayment option with full redraw facility. Mostly used to borrow against the equity in a home, also acts as a transactional savings account to offer additional flexibility. All-in-one Home Loan Account - principle and interest repayment or interest rate only option. Up to 4 sub-accounts (depending on the specific bank). A transaction account is linked to the loan for maximum benefit such as minimising the interest payable over time. The above loan structures when used as package may be referred to as a Combination Split Loan. Each split is an individual loan type and is issued with a separate loan account statement to give you more control of your finances. The combination split loan works quite well for investment property loans. Also for loan types where there is more than one applicant. The combination split loan when used in a strategy will benefit you from rising interest rates and also benefit you from reducing interest rates.

Disclaimer: The above is a generic representation only. It does not constitute financial advice or mortgage structuring advice. It is only to be used as a guide only. Please discuss your financial needs with a financial planner, accountant or your banking representative. No reliance should be placed on the above information.