What Loan Should I Choose?

The finance market is very competitive and can be overwhelming -  with banks, building societies, credit unions, brokers and other lenders offering an enormous selection of home loan options, including honeymoon rates, introductory rates, standard variable rates, fixed rates, redraw facilities, professional packages and more.

Your First Chartered Capital consultant will help simplify this selection process and work harder to find the right loan for your needs from amongst a panel of over 30 lenders.

To find out if you qualify and to see how much lower your monthly payments could be, apply online or phone 13 62 55 to speak with a First Chartered Capital consultant.

As a brief overview, the most common property loans include:

Standard Variable Home Loans
Standard variable loans are the most popular type of home loan. The interest rate on this loan fluctuates up and down in line with official interest rate movements. Different lenders offer different features and rates on these products, generally according to the amount you are borrowing.

Professional Packages
Lender's professional packages offer a range of discounts off standard loans if you are borrowing $150,000 or over. This discount can range anywhere from .5-.7% depending on the lender and loan package.

Basic Variable Home Loans
Basic variable loans are loans with lower interest rates, but fewer features than a standard variable loan. The interest rate can rise or fall over the term of the loan. These loans are typically "no frills" products, often around 0.5% - 0.7% less than the standard variable rate and are used by people who want a variable rate, but may not qualify for or be interested in a professional package home loan.

Fixed Rate Loans
Fixed-rate loans lock in the interest rate for a set period, usually from one to 10 years but sometimes longer. These home loans usually revert to the standard variable rate when the fixed-rate period has expired, unless "rolled over" for another fixed-rate term (at the prevailing fixed rates).Fixed rate home loans appeal to people who like to know in advance what their payments will be – without suffering from unexpected rate rises (or benefiting from occasional rate drops).

Combination/Split Home Loans
Split loans allow borrowers to divide their loan into a part variable rate loan and part fixed-rate loan . While the overall loan amount is considered total borrowings, each part is treated separately for contract purposes. These loans offer borrowers a chance to hedge their bets in times of rising interest rates and provide both repayment flexibility and interest rate security.

Discount Variable, Honeymoon, Introductory, Home Loans
These are variable rate loans with a discounted interest rate off the standard variable rate (commonly over 1%), lasting a certain period of time, usually one year. After this period, they normally revert back to standard variable rates. Sometimes, depending on the lender, interest rates can be fixed or capped during the initial/honeymoon period. These rates are among the lowest rates available and are often used by first home buyers or even investors.

Bridging Finance
With a bridging loan, your lender will loan you the money to cover the gap between settlement on your old home sale and new home purchase. In effect, the lender agrees to take on both mortgages. Bridging finance typically covers a period from a few days to a few months.

To qualify for bridging finance, borrowers must demonstrate that they can pay their existing mortgage as well as interest costs on the new loan. Lenders generally apply strict criteria to bridging finance before giving approval. Conditions can include the unconditional sale of a borrower’s existing property and restrictions on proposed settlement terms and may vary from borrower to borrower.

To best determine the right kind of loan for your needs, apply online and one of our First Chartered Capital loans consultants will assist you.