Products & Services

What makes a great home loan?

For most people, an attractive interest rate is one of the most important features. For others it is having the flexibility of a redraw facility or the ability to alter their repayments.

At Australian Mortgage Brokers we offer personalised one to one service in helping you find the right loan. We will explain in detail the different products and features on offer and help find the right loan for your needs.

Standard Variable Loan

This is the most popular home loan in Australia. The interest rate on these loans vary at anytime depending on the market forces. The features of a Standard Variable rate loan vary dependant on the individual lender but these loans generally offer an offset facility, redraw facility, no limits on additional repayments and in most cases no early pay-out penalties. A standard variable loan can usually be combined with other types of loans and are ideal for the borrower wishing to pay their home off sooner rather than later.

Basic Variable Loan

Basic variable rate loans are sometimes referred to as the 'no frills' alternative to the standard variable rate loans. The interest rate is lower then a standard variable loan, making them attractive to the budget conscious borrower wanting a lower variable rate but with fewer features.

Introductory (Honeymoon)

An Introductory variable rate loan generally offer's a guaranteed low rate for an initial period of time (usually 12 months) after which most interest rates will revert to the Standard Variable Rate. An Introductory Loan is attractive for the borrower wishing to take advantage of the honeymoon period before taking up the features and advantages of a Standard Variable Rate Loan.

Fixed Rate Loan

Fixed rate loans are funds lent over a set term at a set interest rate. This gives the borrower the certainty of knowing exactly what their monthly repayments will be should their circumstances change. Some lenders may impose early repayment penalities if you make a lump sum reduction to your loan or you pay the loan out in full. However a fixed rate loan is ideal in a rising interest rate market as this guarantees you of your interest rate and repayments for a set time.

Bridging Loan

A Bridging Loan is available to borrowers who wish to purchase a new home now and sell your current home later. These loans are especially helpful to 'bridge' the gap between the sale of one property and the purchase of another. The interest rate on a Bridging Home Loan is usually the same as a Standard Variable Rate Loan. A Bridging Loan ensures that the borrower will not miss out on a desired property because they haven't sold the current home.

Line of Credit

A Line of Credit provides a borrower with access to the equity in their home or investment properties whenever they wish for any worthwhile purpose. It is similar to an overdraft facility in that funds can be withdrawn up to the original loan approved amount at anytime. The interest rate on a Line of Credit facility is usually a variable rate that fluctuates with the market.

A borrower can generally access their Line of Credit via a Cheque Book, Credit Card, ATM, Phone and Internet. A Line of Credit provides a borrower with easy access to funds ensuring peace of mind in times of need.

Credit-Impaired Loans

At some point in the past, a borrower may have experienced difficulty in meeting their monthly commitments due to lack of work, suffered unexpected business losses or had a difference of opinion with a former credit provider. Unfortunately, in these cases the former credit provider may have lodged a payment default (or black mark) on their credit report with a credit recording agency. When applying for finance, a default lodged on a credit report may cause some frustration as a lender may not take an understanding view of the borrowers explanation surrounding the default.

Credit-Impaired Loans are designed especially to assist a borrower in these circumstances. Usually these loans incur an extra interest rate margin and possibly extra fees and charges.

Low Document Loans

A Low Documentation (or No documentation) loans are designed for the self-employed or small company borrower whose financial statements may not be available for many different reasons eg Accountant hasn't completed their bookwork. The borrower must have a sizeable deposit or equity in existing real estate property.

These loans are usually a variable rate and offer most of the features and benefits attached to the lender's standard variable rate loan product. A Low document loan can be just as competitive as mainstream lenders, however they provide less hassle as the borrower doesn't have to provide the usual lender income documentation.

LOAN FEATURES

Interest Only

An Interest Only Repayment Facility is usually available on investment loans. The interest is calculated on the original borrowed amount and requires no principal reduction. An ideal borrower is an investor looking to maximise his tax and negative gearing benefits by simply paying the interest on the loan.

100% Mortgage Offset Accounts

A Mortgage Offset Account gives you all the features of a normal transaction account, but instead of earning interest, you can use the account balance to offset the interest charged on a the home loan. Any money you put into the offset account is deducted from your home loan balance before the interest is charged. A great way for a borrower to use their savings to reduce the interest charged on their home loan.

Redraw Facility

When a borrower pays extra or additional repayment on their home loan they have the ability to redraw or withdraw the extra repayments that they are in advance. A Redraw Facility works similar to an, 'all-in-one' facility. The borrower deposits all of your income and savings into the loan and then they can withdraw the money from the home loan account for all your day-to-day expenses.

Another excellent way to save interest on your home loan is to make your day-to-day purchases on an Interest Free Credit card and 'redraw' the full balance of the card at the end of the interest free period to pay the card off in full.

Split Loans

A split loan is ideal for a borrower who wishes to have two loan products rather than one. An example is a borrower who wants to take advantage of a fixed rate loan products in combination with a variable rate loan product. The borrower can fix in portion of their loan to provide stability of interest rate and repayment but still allowing themselves the flexibility to make additional and lump sum repayments on the variable portion of the loan.