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Types of Home Loans

If you want to buy a home, it is a good idea to know the different types of home loans available:

Basic

Basic loans are low interest, straight forward loans with no frills or hidden costs. The rate of interest is low and the process is relatively simple to understand. These home loans do not have the flexibility of other types of loans. These types of home loans are best suited for anyone taking a loan for the first time.

Variable Rate

In this type of home loan, the installment payment varies with the rate of interest. It is slightly more flexible than the basic loan in as much as, the installments become lower if the rate of interest falls. This type of loan is suitable for anyone who wants a straight forward loan with a little bit of flexibility. Contact Adelaide mortgage broker to learn more.

Fixed Rate

Fixed rate home loans have a fixed rate of interest for the entire period of the loan irrespective of the prevailing interest rates. You have the assurance of knowing in advance the amount you will be required to pay each month, however you lose the advantage of reduced installments.

Split Rate

Split rate home loans allow you to have a fixed rate of interest for a certain period and a variable rate thereafter. This type of loan is suitable for those who are new home owners and may need the extra cash later for decorating their home or for other purposes.

Honeymoon Loans

These home loans are especially for first time home owners who are in their honeymoon period. The rate of interest is considerably low during the first half of the term, to accommodate the new couple.

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