| Honeymoon Loan : |
Offers a low introductory rate for a six to twelve month period. Ensure you check the interest rate that applies after the introductory period. Those with a really low initial rate tend to revert to a higher rate than others. Questionable whether the early savings justify the total cost over the full term. Break costs can be very high.
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| Basic Loan : |
Lower interest rates but few frills. The less features, the lower the rate. Interest rates and repayments vary over the term of the loan.
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| Standard Variable Loan : |
The standard variable loan is common to all institutions. These are loans where the interest rate can vary throughout the term of the loan. The most flexible loans come with redraw, and mortgage offset repayments holidays if you lose your job or start a family. Extra repayments allowed without incurring additional fees.
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| Offset Loan : |
A home loan with an offset feature allows you to make additional payments that can be offset against the balance of your loan. This will help reduce the overall interest you pay.
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| Fixed Home Loan : |
Interest rate fixed for a set period, anywhere from one to ten years. Remember that the interest rate is fixed at the date of formal approval for a loan. Interest rates can rise in between application and full approval, so be wary that you don’t wind up with a higher rate than you expected. Some banks allow you to set the interest rate at the date of application if you pay an additional fee.
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| Low-Doc Loan : |
A low-doc or no-doc loan is ideally suited for investors or self-employed borrowers looking to refinance, purchase or renovate. No tax returns or financial reports are required. Most have all the features of a variable rate loan, but can have a higher interest rate.
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| Line Of Credit : |
Works like a overdraft with a limit allowing you to access available funds when needed. There is no set term as long as borrowers make the minimum interest payments. You can pay down a loan quickly but only if you make extra repayments.
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