Standard variable rate loan

Standard Variable Rate loans are fully featured loan offering flexibility & features such as the ability to make extra payments, redraw facility, split loan, or loan portability etc.

Some banks even offering offset account facility which means you could offset the interest on your loan account with the transaction account so you could reduce the interest paid over the term. The variable rate could vary depends on policy from Reserve Bank so the borrowers.

Offset Account

Offset account is additional account which is normally attached to standard variable loan as feature an everyday transaction account linked to your home loan. This is a great tool for Mortgage Reduction Strategies whereby utilizing the balance on the offset account will reduce the interest pay on your home loan so you could pay off your mortgage quicker.

Basic variable rate loan

Basic Variable Rate loans are popular because the rates offered are lot cheaper than the standard variable rate still with good feature such as ability to make extra repayments, or redraw.

However depends on the lenders, the amount to redraw maybe restricted for certain amount & generally there are fees attached to it. Most borrowers loves the simplicity & pricing of this product.

Fixed rate loan

Fixed rate loans protect you against interest rate increases for an agreed time, so you have the peace of mind of knowing what your repayments will be. However, with a fixed rate loan you won't benefit if rates go down during the fixed term.

Combination or split rate loan

Combination or Split rate loans allow you to fix part of your loan for protection from rate rises, while the rest of your loan benefits from the flexibility of a variable rate.

Low-Doc loan

Low Doc Loans are designed for people who are unable to provide financial information required to ascertain their borrowing capacity. These could be self employed people who run their own business or other form of employment such as contractor, or investor. Most of banks are now very competitive in this market by offering standard variable rate option.

Non-Conforming loan

Non-conforming loans are specifically tailored for borrowers that doesn't meet 'standard' bank criteria, this could be casual workers, non resident, borrowers with adverse credit history, lack of financial information or lack of deposit. In most cases non-conforming loans charges higher interest rate than standard variable rate, the rates usually will determine by the situation of the borrowers.

Line of credit and Home equity loan

Line of Credit is where the lender assigns you a credit limit secured against your property and you can access the funds just like your savings account via ATM, Cheque or Electronic transaction.

There are no set repayments because the interest charged on the daily balance and capitalized into the limit, some banks preferred the borrowers to make minimum interest payment for the month while the others don't. Most lenders now discounting their rates similar to the standard variable rate to make the product attractive, usually investors utilized this for wealth creation & expanding their portfolio.