Tasmania's specialist home loan planners and credit advisors
(03) 6228 2422
BASIC HOME LOAN
This range of products are 'no frills' or 'bargain basement' type loan which make them attractive for customers who seek the lowest possible interest rates. The disadvantage is that basic home loans generally have less flexibility than the more traditional standard variable home loans.
This is the most popular form of home loan. The interest rate can rise or fall during the loan period. It offers great flexibility like accelerated repayment, redraw and mortgage offset facilities. There are many plans to choose from and the resulting large competition keeps the spread in interest rates between lenders low. Because of these flexibilities the mortgage rates are generally higher than for the basic home loans.
The interest rate for a fixed rate loan is fixed for a set period of time. These products offer predictable monthly repayments for the agreed term that are independent of the market interest rate variations.At the end of the fixed period the loan can usually be converted to a standard variable loan or a new fixed period can be negotiated.Fixed loans generally offer little flexibility and fewer features than standard variable loans and early exit can be expensive.
Split loan products allow splitting the total loan into a fixed part and a variable part for the remainder. This allows the flexibility of early repayments and other features for the variable part of the loan, whilst being protected from interest rises for the fixed proportion of the loan. The split ratio can be set at any value, 50/50 and 40/60 being the most common.