Basic Home Loan
100% Offset Account
Fixed Rate Loan
Line Of Credit
When selecting the type of loan to apply for, you should firstly work out what features you need and which you do not. The more features your loan has, the higher the interest rate.This is particularly true for low doc loans, fixed rate loans and line of credit loans (LOCs).
The main needs you things you need to consider are:
Loan redraw gives you the power to withdrawal any additional repayments to which were made on top of the minimum loan repayment. E.g. If you had been making an additional repayment of $200 on a monthly basis, then after a year you will be able to redraw $2,400. Effectively any additional payments you have made can be accessed when you need them. This is a great way to keep funds on standby or to save for a holiday or car in your loan account rather than in your savings account. However, please be advice that some lenders may charge a fee for a loan redraw and in the case of fixed rate loans, redraw is often not available.
With this feature you have the ability to make extra repayments into your loan on top of their minimum loan repayment. For example: If your minimum monthly loan repayment is $3,000, but instead of paying the minimum figure you pay $4,000 per month into your loan. This means that they have made an extra repayment of $1,000 into the loan. Extra repayments can be made on a regular basis by changing the amount that the banks direct debit from your account. Alternatively you can make extra repayments on an irregular basis by transferring money in whenever you have it available. For fixed rate loans, extra repayments is often not available.
A professional package is where you pay one annual fee in return for discounts on a range of products and other benefits and services from your lender. In most cases a professional package is suitable for large loans (>$250,000) and is almost always used when we negotiate a special discount for customers borrowing over $1,000,000. They can also be suitable for people who have multiple products with the one bank.
Waived application fee.
Waived monthly fee on your loan.
Waived valuation fee.
Interest rate discounts (0.5% to 0.9% depending on the lender, loan size & the market).
Waived monthly fee for your cheque account.
Waived annual fee for a credit card with rewards.
Discounted insurance products.
Special service / higher level of service from the bank.
With an interest only period you will just pay the interest due each month, and not any of the principal itself. The benefit of doing this is that you keep your repayments to an absolute minimum, however you will not pay off the loan unless you make extra repayments. Interest only periods are usually for up to 5 years, however some lenders will consider 10 years or even 15 years.
This feature allows you to have your salary paid directly into your loan account. This is most commonly used for people with a ‘Line of Credit Loan or for people who are ‘Salary Sacrificing’ their home loan.
With loan portability you can move your loan onto another property. Normally this is used when you sell one home and buy another.. In most cases for this to work the settlements must occur on the same day. This can avoid the need to apply for a new home loan when you move house.
A repayment holiday can be used if your circumstances change. This may be starting a family or changing jobs, and consequently a reduction in income for your family due to taking time off. Typically you can reduce or avoid making repayments for up to six months, during which time the interest adds onto your loan. When you return to work you can then restart your repayments and eventually increase your repayments to catch up to where you were before.
This feature allows your loan to have multiple loan accounts. The most common use of this is for people to setup a loan as half fixed, half variable. This allows them to make extra repayments on the variable portion, however to partially protect themselves from rising interest rates.
You can also use multiple loan accounts to keep track of loans used for different purposes. For example if you want to buy shares and use your home as security. You can have a separate account for this purpose so that you can show the tax office which part of your loan is tax deductible.
CBA- 3 year special rate saver
Rams- Basic home loan
Westpac- Flexi first option
St George- Basic home loan
Suncorp- Back to basics
ANZ- Simplicity plus
NAB- Base variable
And many more…
Don’t need bells and whistles: Why pay the annual package fee for a professional package loan if you are not going to use all of the features it can offer, such as a credit card. That way with a basic loan you will only be paying fees for what you need and want, at a lower cost.
People who don’t want to change banks: Often with other loan types the loan comes as a package with a cheque account and credit card. Obviously if you don’t want to change banks then there is no point in getting these additional products with your loan.
Simplicity: Anyone who finds dealing with their money to be too complicated and just wants a simple, easy to use solution should apply for a basic loan.
A 100% offset account is a linked transaction account that usually has ATM and cheque access. By simply depositing your salary into this offset account, it can be used for all your daily expenses just like a normal cheque account, and the amount of interest that you pay for your loan will be decreased. The more money that you have in your offset account, then the lower your interest expense will be. You should consider the following to make sure you are making the most out of your 100% offset account:
Have your salary deposited into your offset account so that the amount of interest you pay will be less.
Ensure that you have sufficient funds in this account to make your loan repayments.
You can redraw from your home loan account to offset account if need be.
Use your offset account for transactions with your debit card including ATM, EFTPOS, internet banking, cheque book and BPAY.
Repayments are made to the home loan account from the 100% offset account.
Westpac- Premier advantage rocket investment loan / Premier advantage rocket repay home loan / Rocket repay home loan
St George- Advantage home loan package standard variable rate / Standard variable rate home loan / Advantage home loan package 1 year discount variable rate
Suncorp- Money manager standard variable / Standard variable rate loan
ANZ- Professional benefits standard variable residential land loan / Breakfree standard variable residential land loan / Breakfree standard variable package / Standard variable rate loan
NAB- Tailored home loan choice package/ Tailored home loan / National flexi plus
AMP- Professional & basic loans with offset accounts are available.
Citibank- Mortgage plus package home loan.
ING- Orange Advantage home loan.
And many more…
CBA- MAV package fixed rate / Fixed rate loan
Rams- Fixed rate pro pack / Fixed rate
Westpac- Premier advantage fixed options home loan / Fixed rate interest in advance investment loan / Premier advantage fixed rate investment loan
St George- Advantage home loan package fixed rate loan / fixed rate home loan / Advantage home loan package introductory 1 year fixed rate loan
Suncorp- Money manager fixed rate / fixed rate home loan
ANZ- Fixed rate interest in advance loan / Fixed rate home loan
NAB- Choice package 2 years fixed / Choice package 3 years fixed / Choice package 4 years fixed / Choice package 5 years fixed / Choice package 10 years fixed / Tailored home loan / 12 months intro fixed
And many more.
If you have a Line Of Credit (LOC) then you do not need a bank account as all of your income and expenses can be run through your home loan. For this reason, LOCs are also known as “all in one” accounts or all in one home loans. There are some dangers in using a line of credit in this way. such as not paying your home
In general, borrowers who cannot afford to make significant additional repayments would be worse off if they were to refinance to a line of credit. This is because a line of credit usually offers a higher interest rate which would outweigh any savings made by combining your accounts.A mortgage through a line of credit would generally be an interest only loan without a set term for the loan to be repaid. Therefore, the borrower then has the choice on deciding when they will make payments on the principal, which would suit some borrowers and would be a disaster for others.
You can withdraw up to your credit limit without having to seek approval from your lender.
The credit limit amounts are usually quite large which mean you can make larger purchases without going over the limit.
The interest rates are generally lower than that offered through a credit card, often at home loan rates or just a little higher.
You will have easy access to your funds as most line of credit facilities offer cheque books, internet and phone banking, and a range of other useful transactions.
You can consolidate your debts by transferring other debts such as a personal or car loans into your mortgage.
You can reduce the balance and consequently save on interest by directing all of your income into your home loan account.
CBA- MAV package line of credit residential equity / Line of credit residential equity
Rams- Line of credit / Line of credit professional pack
Westpac- Premier advantage equity access loan / Equity access loan
St George- Advantage home loan package portfolio loan variable rate / Portfolio loan variable rate
Suncorp- Money manager asset line / Asset line
ANZ- ANZ portfolio loan equity manager / ANZ portfolio home loan / Breakfree equity manager / Equity manager / Breakfree equity manager / Professional benefits equity manager
NAB- NAB home equity line of credit
CBA- MAV Package line of credit / MAV standard variable OR Wealth Package
Rams- Line of credit professional package / Smartway professional package
Westpac- Premier advantage rocket repay home loan & investment loan
St George- Advantage home loan package portfolio loan / Advantage home loan package standard variable rate home loan
Suncorp- Money manager standard variable / Money manager asset line
ANZ- Professional benefits package standard variable / Breakfree package standard variable
NAB- Tailored home loan under the choice package
And many more…
Regardless of how many different loans you have, you only pay for the one annual fee.
There are no ongoing or hidden fees on your loan.
Discounts on products such as home insurance, personal insurance and financial planning.
Most of the account keeping type fees on your transactional accounts can be waived.
The annual fee on your credit card can also be waived.
You do not need to be a doctor, lawyer or an accountant to get a professional discount. Usually a professional package is best suited for:
People who are intending to borrow a larger loan amount. For loans greater than $500,000 most lenders can now offer a discount of 0.5% to 0.9% from their standard variable rate.
People who prefer to apply for a whole package type of loan. This means that there will be an annual fee which would cover all the features that are included in the package. For most people, applying for a professional package would be a smart choice as you would not need to pay a fee for each feature separately.
Anyone who does not mind changing banks to get the best possible deal.
People who do not need a range of bank products.
People who do not want to switch to a new bank.
Low doc loans are usually offered to meet the needs of small businesses, contractors and other ABN holders. It is typically designed for the self-employed who cannot prove their income through documentation.
Rams- Line of credit SE professional pack / SE pro pack / Rams SE pro pack 80 / SmartWay low doc / low doc 500 plus (80%) / low doc line of credit
Westpac- Premier advantage low doc rocket repay home loan / Premier advantage low doc variable investment loan / Premium option home loan low doc / Variable rate investment property loan low doc / Low doc variable investment property loan / Low doc equity access loan
St George- Professional benefits low doc portfolio loan / Professional benefits low doc / Low doc portfolio loan variable rate / Low doc variable rate
Suncorp- Low doc back to basics variable rate / Low doc asset line / Low doc standard variable rate
ANZ- Professional benefits standard variable residential land loan / Professional benefits standard variable rate / Breakfree equity manager / Equity manager low doc 60 / Standard variable rate low doc 60 / Professional benefits equity manager
NAB- Tailored home loan low doc / National flexi plus low doc
And many more. Please enquire.