Variable Rate Loan: –

This is predominantly the most common form of home loan which has an interest rate that can change at any time.  The change is linked to the movements of the Cash rate and the decisions made by the Reserve Bank of Australia.  This means Variable Product Loans will be subject to Repayments increasing or decreasing over the period of the Loan Term.

A Variable Rate Product also allows flexibility with extra repayments and redraw facilities.  There are various types of Variable Rate Loans from our Lenders including Honeymoon rates, Discounted rates, Basic rates etc.
Also ask us to discuss which Lenders can offer you an Offset Account with your Home Loan which can save considerable interest on your loan and give you the opportunity to payout the loan faster!

Product Features and Comparison Rates Schedule from each Lender will be provided to give a clear option on choices that are available to you along with Repayment and Funding schedules.

Fixed Rate Loan: –

By the nature of its name the Interest rate is “Fixed” at a pre-determined rate for a selected period of time (Term) as decided by the Borrower.  The Term can be from 1 year up to 5 years and even longer if preferred.  The Fixed Rate Product Loan keeps your repayments the same when interest rates rise (note - they will also remain the same should interest rates fall). 

Note that extra repayments are more restrictive and redraw is not a feature of these loans. Also you may be subject to Break Costs if you payout the loan before the expiry of the Fixed Rate Term.  After the Fixed Term is completed you can refix or you convert to a Variable Rate Product automatically.

Line of Credit: –

 This is a Variable interest rate and is a Loan that allows you to draw out funds as you require them.  It can be for Home Improvements or if you choose some Personal Investment or Property Portfolio.

The Line of Credit often suits Professionals or Business People or Working couples as they can work this loan with their income to lower interest costs!Note that the repayments are Interest only on most LOC's on the balance drawn down.  Extra repayments can be made either voluntarily or by way of direct debit facility.

Split Loan: –

In some situations people may benefit from doing a part fixed and part variable loan. 
We refer to this as a “Split Loan”.

For example a $300,000 mortgage may be split into $150,000 Fixed for 3 years and $150,000 Discounted Variable.  The rationale behind this is if the outlook is uncertain and you want some protection on your repayments should rates rise.  Then you have protected this to some degree by part fixing. Also if you want the flexibility offered by a Variable rate product and want benefits if the rates reduce.  Then you will also gain this benefit by making part variable. 

Interest Only Loan: –

This is a loan where you choose to pay the Interest cost only on the Loan.  This may be chosen particularly for Investment purpose Loans such as Investment Properties or Personal Investment such as Shares. 

Perhaps your cashflow position can be assisted with a short term interest only loan.  Often you can have between 5 and 10 years with most Lenders.  Then the Loan reverts to a Principle & Interest repayment.

Bridging Loan: –

A Loan Facility used where the current home is used to finance the Purchase or Construction of a new home. 

This allows you to purchase a Property or Vacant Block of Land and commence Construction whilst remaining in your own home.  This avoids the need to sell your Home beforehand or having to move into a rental property or even avoid losing a Property or Vacant Block of Land you wish to purchase.

It is normally an Interest Only Loan and can be Capitalised. This Loan is paid out when your current Home is sold.  Standard rates also apply to a Bridging Loan so it can be a worthwhile and cost effective option.

Personal Loan: –

 This is a Loan for personal purposes normally used to purchase a Motor Vehicle but can be used for other personal expenditure eg. buying Furniture or Holiday or Computer Equipment! It can be a Variable Rate or Fixed Rate Loan.  The Term is normally up to 5 years.  With Motor Vehicle Finance the Vehicle will be used as security for the Loan which will assist with lower rates. 

Business Loan: –

Various types of Business loans are available and covered in more detail in the next tab. Essentially we can raise Finance for Plant, Equipment, Stock, Motor Vehicles, Computer Equipment and even Working Capital. Options too for shop or office fitouts or factory layouts. Terms and Rates will vary between Lenders and we use both Banks and other Financial Institutions to secure the most suitable deal.

Motor Vehicle Finance: –

This comes in various forms and for personal use we recommend a Personal Loan.  For Business use we offer a number of options which should be considered in consultation with your Accountant including -

Chattel Mortgage: – Ownership of the Vehicle is with the Borrower with a Mortgage taken by the Lender.

Finance Lease: – The Vehicle is Leased and on expiry of the period a payout figure is determined allowing the Business to then purchase outright.

Operating Lease: – The Vehicle is taken similar to a Rental and Ownership is retained by the Financier and Vehicle returned at end of the period.

Various issues need to be taken into account including GST, depreciation and interest deductibility when deciding which option to use.  We will work with you and your Accountant to discuss best options for you!

Designed and Created by Dion Kalman-Breakwell 2009