Not All Home Loans Are The Same

Make sure you choose a loan with the features and benefits that are right for you. A Local Mortgage Specialists finance broker can recommend a loan for your particular needs – and take care of all the paperwork. When you’re ready, talk to us to discuss next steps.

Home loan features

Interest only repayments You only pay the interest on the loan, not the principal, usually for the first one to five years. These loans are popular for investors loans when paying off the principal is done when the property is sold, having achieved capital growth. For you home loan, most lenders will have restrictions on interest only loans, as directed by the regulators.

You typically have to have plenty of equity and a logical reason to seek interest only on your home loan.

Extra repayments If you pay more than the required regular repayment, the extra amount is deducted from the principal. This not only reduces the amount you owe but lowers the amount of interest you repay. Making extra repayments regularly, even small ones, is the best way to pay off your home loan quicker and save on interest charges. On variable rate home loans, you also have to option to redraw those extra funds at a later date, depending on the terms on the home loan product.

Weekly or fortnightly repayments Instead of a regular monthly repayment, you pay off your home loan weekly or fortnightly. This can suit people who are paid on a weekly or fortnightly basis nd will save you money because you end up making more payments in a year, cutting the life of the loan – 12 months in a year, but 26 fortnights.

Redraw facility & Offset Redraw allows you to access any extra repayments you have made. Knowing you have access to funds can provide peace of mind. There may be some charges or restrictions with redraw depending on your home loan product, and it's not available with a fixed rate loan.

An Offset is a bank account linked to your home loan. Any money paid into that account is deducted from the balance of your home loan before interest is calculated. The more money you deposit, the lower your regular interest payment is. You can access your savings in the usual way, by EFTPOS and ATMs. This is a great way to reduce your loan interest, as well as eliminate the tax bill on your savings. Lenders provide partial as well as 100% offset accounts. Be aware the account may have higher monthly fees or require a minimum balance.

Repayment holiday You can take a complete break from repayments, or make reduced repayments, for an agreed period of time. This can be useful for travel, maternity leave or a career change.

Direct debit Your lender automatically draws repayments from a chosen bank account. Apart from ensuring there is enough cash in the account, you don’t have to worry about making repayments.

All in one home loan This combines a home loan with a cheque, savings and credit card account. You can have your salary paid into it directly. By keeping cash in the account for as long as possible each month you can reduce the principal and interest charges. Used with discipline, the all-in-one feature offers both flexibility and interest savings. Interest rates charged to these loans can be higher.

Lender Package Most lenders will offer their best interest rate and fee discounts under their own “package”. Combined with discounted fees on other banking services you would usuallyu be charged and annual fee that gives you discounted or free products in turn. These can be attractively priced, but if you don’t use the banking services you may be better off with a basic variable loan.

Portable loans If you sell your current property and buy somewhere else you can take your home loan with you. This can save time and set-up fees, but you may incur other charges.

So it's best to have an expert on your side to guide you through all this - Talk Local Mortgage Specialists to navigate the lending options and track down the most competitive rate and suitable loan structure for you.