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 Basic Variable Loans

These are the simplest home loans available, known as "No Frills" loans. Generally they will attract the lowest interest rate with little or no regular fees. However, the loan will not usually include as many features such as allowing additional payments and limiting loan variations etc. These loans are best suited to clients who do not need or want flexibility or are unable to pay any extra off their loans, or who may wish to use excess funds for other investments.

Some Pros:

• When interest rates fall, your repayments may be reduced

• Usually have a lower interest rate than other options

Some Cons:

• When interest rates rise, so do your repayments

• Usually do not offer the features or flexibility of other loans

To see how this product would suit your requirements please Contact our friendly team for a FREE consultation.

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 Fixed Rate Loans

If you are not comfortable with your loan repayments fluctuating or you require a guaranteed consistency of repayments for the period of your fixed term, then a fixed rate option is for you. By paying a small premium on your interest rate, your lender will fix your rate insuring you against interest rate rises in the future. These days fixed rate loans are not as restrictive as they once were and some lenders may allow limited extra repayments without penalty.

Some Pros:

• When interest rates rise, your repayments will not change

• Provides a consistency of repayments for budgeting purposes

• Some lenders offer an offset account

Some Cons:

• Usually has reduced flexibility

• Penalties may arise if you wish to make extra repayments

To see how this product would suit your requirements please Contact our friendly team for a FREE consultation.

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 Split / Combined Loans

This facility enables a client to choose the benefits of two types of loans. For example, you may require some consistency and certainty at the beginning of your loan but may believe official interest rates will fall over the long term, so you may negotiate a Fixed Rate Loan period at the beginning and switch to a Standard Variable Loan once that period has ended.   You may also be able to portion part of your loan (say 50%) as a fixed option and the other 50% as a variable to account for all possibilities.

Some Pros:

• Can lock in a set period for consistency of repayments for budgeting purposes

• Can allow the flexibility of reverting back to a variable as interest rates fall

Some Cons:

• Usually only has a limited term allowed to lock in fixed

• Usually attracts higher fees

To see how this product would suit your requirements please Contact our friendly team for a FREE consultation.

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 Interest Only Loans

In some circumstances such as investing, a client may require an Interest Only repayment loan, which will reduce their repayments to the interest portion, leaving the Principal (or the initial loan amount) unpaid. The theory is that interest is tax deductible, whereas principal repayments aren't. This allows the investor to inject limited cash resources to the investment allowing them to use their funds elsewhere.  This loan may include a fixed rate, variable rate or split combination.

Interest In Advance allows you to pay your interest up-front, there may be tax benefits by choosing this option. Interest frequency options are yearly, half yearly, quarterly and monthly. We recommend that you seek your personal tax consultant's advice.

Some Pros:

• Reduces repayment amounts freeing up cash resources

• In most instances the interest rate is lower with an Interest In Advance option

Some Cons:

• Balance of the loan remains at the original amount borrowed.

• Leaves investor at risk if the value of the property does not rise to cover the balance of the loan

To see how this product would suit your requirements please Contact our friendly team for a FREE consultation.

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 Introductory / Honeymoon Rate Loans

Some lenders offer an Introductory Rate Loan (also known as a Honeymoon Loan) to attract new customers. This usually involves the interest rate at the very beginning of the loan being set at an interest rate lower than the standard variable rate for a period of usually 12 months, before the loan reverts to a standard variable (or other) set rate.

Some Pros:

• Lower repayments at the commencement of the loan period

• A good opportunity for a customer to refinance to a new lender

Some Cons:

• Sometimes the rate reverts to a new rate higher than the standard variable rate (quickly eroding any initial benefits)

• Some lenders limit the amount that can be paid off during this initial period

• Many lenders have high exit fees should a client refinance or terminate the loan at the end of the introductory period.

To see how this product would suit your requirements please Contact our friendly team for a FREE consultation.

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 Seniors Loans

Seniors loans (or Equity Release Loans) may allow people over the age of 55 or 60 to access the equity or value that has built up in their property as a cash resource to be used for other investment or lifestyle purposes. Generally, the amount borrowed does not require repayments during the life of the loan, however the principal and outstanding interest will be due in full on the house being sold, transferred or passed to the estate of the last surviving borrower.  

Some Pros:

• Extra cash to supplement retirement income or for other investment purposes

• Usually no restriction on how funds are used

• Most lenders have a "No Negative Equity Guarantee"

Some Cons:

• Interest is capitalised, reducing the final cash value of the home on settlement.

To see how this product would suit your requirements please Contact our friendly team for a FREE consultation.

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 Line of Credit Loans

Operating like an overdraft account, these accounts will provide a line of credit, secured against a residential property, allowing you to access funds when required, provided you stay within your limit. This will allow an investor (for example) to draw down a cash resource from one investment, to purchase another investment.

Some Pros:

• Use the money only as you need it

• Only pay interest on the amount used

• No term attached

Some Cons:

• Possibly reduces the equity in your residential property

• In you are undisciplined, the loan can get out of control

To see how this product would suit your requirements please Contact our friendly team for a FREE consultation.

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 100% Offset Accounts

Operating like an all in one account, the borrower deposits all income into an account attached to the loan (called an Offset Account). The balance of this account offsets (or reduces) the outstanding balance of the loan account before interest is calculated.  The borrower has access to the usual savings account facilities and can withdraw money from this offset account when cash resources are required.

Some Pros:

• The money in the offset account effectively attracts an interest rate exactly the same as the loan account (which is higher than a normal everyday savings account).

• Access to cash if required

• If well disciplined, this loan may be paid off much sooner than a standard loan

Some Cons:

• This usually attracts higher fees and restrictions on the savings account

• In you are undisciplined, the loan can get out of control

To see how this product would suit your requirements please Contact our friendly team for a FREE consultation.

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 Professional Packages

Some lenders offer packaged loans for borrowers who may be high income earners, in specific professions or are borrowing a minimum required amount. The benefit is that if the client qualifies for one of these types of loans, they will qualify for options such as lowered fees and charges, credit card options and other benefits.

Some Pros:

• Lower annual fee

• May offer a discounted introductory rate at the commencement of the loan

• Other options available for ancillary services (such as mortgage insurance premiums etc)

Some Cons:

• Usually offered at the lenders standard variable rate (rate discounts unusual)

• Must meet specific borrower constraints.

To see how this product would suit your requirements please Contact our friendly team for a FREE consultation.

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 Deposit Bonds

A Deposit Bond can act as an alternative to the 10% cash deposit required on exchange of Contracts for a property purchase. It is a form of future guarantee that acts as a substitute for cash between signing the contract and settling the property, allowing you to wait to pay the full amount of the purchase price including the deposit amount on settlement.

Deposit Bonds are a low cost and convenient alternative to exchanging on the purchase of a property and are commonly in use throughout Australia. They can be arranged for Short term or Long term periods.

To see how this product would suit your requirements please Contact our friendly team for a FREE consultation.

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 And More...

There are hundreds of different types of loans from many different lenders on the market today. Each of these products has its benefits and through a consultation with your home loan specialist, they can assist you in finding the one that suits your needs.

Greater Impact will conduct a professional and comprehensive review of your situation in order to ensure that you are receiving the most economical yet suitable loan with the right options and flexibility for you.  Do not fall into the trap of taking an attractive loan option with excellent features and options that you don't actually need, you will end up paying for many things you will never use. Talk to one of our friendly and qualified consultants today to save you time and money during this important process.

To find out how to reach us, please visit our Contact Us information page.

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