With so many different types of loans on offer, it’s easy to get confused.

We’ve designed this list to give the fast facts on the some of the more common options. 
If you want to know more, just get in touch and we can discuss what works for you.

Standard Variable

  • Best for most borrowers, provides more flexibility
  • For owner/occupier borrowers, principle and interest repayments is best as this reduces the balance from the start
  • For investors, interest-only repayments allows for maximum tax deduction claims

Offset

  • A sub-category of standard variable, attaching a savings account to the mortgage, with the balance offsetting the interest charge on the loan
  • You can bank deposits in your loan account, with loan interest calculated on the daily balance after the deposit

Fixed

  • Set interest rate for nominated term (usually one to five years)
  • Exact repayment amounts are set for a given period
  • You may pay less or more than the standard variable
 

Construction

  • For borrowers building a new home  
  • Paid in stages (progress payments) to the builder  
  • Some lenders require valuations at each stage  
  • Once construction is complete, loan reverts to the standard variable for the loan of choice 

Line of Credit

  • A maximum amount is usually set by the lender, with the borrower able to borrow up to this amount at any time  
  • Repayments do not have to be made until the maximum is reached, though the lender may have other conditions

Low-Doc

  • A low-doc loan is specifically for self-employed people  
  • Applicants have to sign a declaration, and in most cases financials are required  
  • Low-doc loans generally have higher interest rates than full-doc loans  
  • You may be able to switch to a full-doc loan at a later stage with proof of financials.
 

Consumer

  • For people looking to make large individual purchases, like a new car  
  • Usually requires monthly payments, can vary depending on the seller for the purchase

Business

  • For newly-created or expanding companies, these loans are generally for covering start-up costs, or to finance development  
  • May require collateral to secure loan

Asset Finance

  • For businesses looking to buy equipment for their operations  
  • Useful for growing or expanding capacity quickly  
  • Similar to hiring, with full ownership the equipment given after final payment