Home Loan Types

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MOBILE MORTGAGE LENDERS

Bringing the lenders to your door

At Mobile Mortgage Lenders, we assist clients throughout Mackay from pre-approval to settlement and offer support for the life of your loan.


Whether you are a first home buyer, upgrading to a new home, investing in property, adding to your existing portfolio or simply wanting to refinance, we can help you with up to date information and resources right in the comfort of your home. In addition to home loans, we have access to a variety of personal or commercial loan products for our customers.


We'll compare leading lenders and mortgage options to find the right loan product for you, and keep you informed of new products and better options that are available. We can also assist with lenders' mortgage insurance, loan pre-approval and even refinancing.


To book an appointment, call us today.

HOME LOAN TYPES

Basic Variable

BASIC VARIABLE HOME LOANS

I’m perfect for a first home buyer, the no fuss buyer or anyone on a budget!This one’s the simplest of all home-loans, call me a “Vanilla” loan.


This product usually has a lower interest rate, when compared to the standard variable loan, this is because it is exactly that… basic. No frills, limited features but great for low budget.


Advantages:

  • Lower interest rates compared to Standard Variable
  • If the interest rates fall, so too will your loan repayments
  • Extra repayments can be made, which can reduce length and $ of your loan
  • No redraw facility, so the loan will only lessen and not increase if you’re tempted to take money out.

Disadvantages:

  • Less flexible
  • Fewer features
  • If the interest rate rises, so too will your loan repayments
  • No offset and Redraw
Standard Variable

STANDARD VARIABLE HOME LOANS

The most popular home loan in Australia! Perfect for ANYONE!


Any home loan with a ‘variable’ rate all fluctuate with the market meaning if rates increase, so does your loan, but if they decrease… so does your loan. Lot’s of features with this product to help consumers make a decision to fit them best!


Advantages:

  • If the rate decreases, your repayments do too!-
  • Extra repayments can be made, reducing the length and cost of your mortgage
  • Lots of features!
  • Flexible
  • Most common home-loan product so more choice when comparing lenders!

Disadvantages:

  • If the rates increase, so do your repayments!
  • Slightly higher interest rates than a basic (you pay for the features).
Fixed Rate

FIXED RATE HOME LOANS

Perfect for buyers seeking certainty, the same repayments every single time, no fluctuation! Also great for first home buyers who might struggle (if) interest rates rose with a variable loan. This loan gives you the security of knowing what your repayments will be over the determined time period anywhere from 1-15 years! Great for easy budgeting but time is crucial to lock in a great rate!


Advantages:

  • If market interest rates rise, yours won’t!
  • Longer term certainty for repayments
  • Budgeting made easy
  • Very common, so large choice of lender and product.

Disadvantages:

  • If the rates drop, yours stay the same so you’ll miss out on saving any money
  • Limited additional repayment options
  • Penalty fee if the loan is exited before the end of the fixed rate period
Spilt Rate

SPLIT RATE HOME LOANS

Perfect for anyone looking to gain from possible interest rate troughs and not sure whether to go fixed or variable, this is the middle man! You can have a portion fixed and a portion variable, choosing the percentage of each.


For example: if you need to borrow $500,000 but would like the benefit of certainty with repayments (fixed) but also to have the option to pay off more than the scheduled repayments then this one is ideal. $400,000 could be fixed and $100,000 could be variable so then 4/5ths of your repayments are certain and there is flex on the 1/5th.


Advantages:

  • Added security as your regular repayments will vary less when interest rates change
  • When interest rates drop, so will your repayments on the variable portion
  • Easier to budget than a variable loan
  • Extra repayments can be made on the variable portion
  • Flexibles!

Disadvantages:

  • Extra repayments limited to variable portion only
  • If the rates increase, so do the repayments on the variable portion of your loan
  • 2 types of loans, therefore could be subject to additional fees
Interest Only

INTEREST ONLY HOME LOANS

Perfect for investors! You only pay the interest on the amount borrowed. Usually you can pay interest only for the first 1-5 years of the loan (some lenders offer more). At the end of this period you will then start to pay off the principal and interest of the loan, at this point you have four options:


Continue paying the principal and interest

Refinance your loan (get a loan from another lender for this property)

Pay off the balance

Depending on the lender, set up a further period of interest-only repayments.


Advantages:

  • Lower minimum repayments during the I/O period, great if you are on a tight budget or saving for renovations
  • Flexibility to pay off and redraw the principal at your leisure (if not fixed rate)

Disadvantages:

  • Higher interest rates compared to other products
  • At the end of the I/O period it can be a financial burden if haven’t budgeted accordingly for the switch
  • Typically variable rates (not fixed) so when interest rates rise so do repayments
  • If property prices fall you may end up with Negative Equity (occurs when the value of a property used to secure a loan becomes less than the outstanding amount on the loan. If you need to sell under these conditions you may have to sell at a loss.
Introductory

INTRODUCTORY HOME LOANS

Perfect for first home buyers or borrowers on a tight budget initially! This product offers a reduced rate of interest at the beginning of the loan typically lasting for 12 months (can also be 6 months - 2 years). After the intro period, the loan reverts to standard rate.


Advantages:

  • Typically lowest interest rates
  • The principal (borrowed amount) can be reduced quickly while under the honeymoon rate
  • Offset accounts available from some lenders
Line of Credit

LINE OF CREDIT

Great for investors needing to access credit! This may also be called an equity loan, allowing you to borrow back against any equity built up win your property. This enables borrowers to access the equity quickly great to use for other investments/ renovations etc. Interest is charged only on the funds used, think of it like a credit card with a big limit, however your property is used as security for the loan.


Example: If you purchase a property at $500K with a $100K deposit, borrowing $400K you have an initial equity of $100K! Ten years later your property is now worth $700K and you have paid off your loan to now balance only $250K, you have now got $450K EQUITY in the property. If you want to take a line of credit loan with an 80% limit (80% of 700K is $560K), meaning you can borrow extra 310K ($560K-$250K) You then use $25K of this line of credit to purchase whatever (shares, renovations etc), interest will only be charged on the amount drawn down ($25K), not the entire line!


Advantages:

  • Interest rates tend to be lower than credit cards or personal loans
  • If financially disciplined the line of credit can give you the flexibility to invest your built up equity when required

Disadvantages:

  • Interest rates generally higher than standard variable rates
  • Requires discipline to endure that the loan reduces over timeIf used incorrectly you can reduce the equity in your property
  • Like a credit card, lenders can view the credit as being fully drawn down when assessing you for future finance, limiting your borrowing capacity.
Construction

CONSTRUCTION

Perfect for owner occupied, investors and developers! These are designed for the building of new properties and involve staged drawdown payments where funds are received in instalments in conjunction with the build. The principal is used to pay for the property once the contract has settled. These loans are typically interest only during the land purchase and construction phases and are drawn down in stages during the build. When the construction is completed the loan will be reverted to another type.


For example the payments could look like this:

  1. Deposit
  2. Slab Down
  3. Frame
  4. Roof cover on
  5. Lockup
  6. Completion/ handover this:

Advantages:

  • Specifically designed for building and enables you to draw down the loan in stages instead of 100% upfront like other loans
  • Most are interest only until build is complete

Disadvantages:

  • At the lockup stage, typically 80-90% of a loan may be drawn down. This period can last several months, so your regular repayments will be new to their maximum and the property will not even be occupied (by you or by tenants).
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