Realty Review

A home loan is the amount that you borrow from a financial institution to be able to purchase a house. There are various kinds of home loans in Australia and you may need to know each of them in order to decide the one that suits your needs perfectly. Here is a list of the various kinds of home loans that you can find in Australia.

• Variable home loans – These are loans that have a flexible rate of interest that is charged to the borrower. It is a great option if you feel that the home loan interest rates are likely to reduce in the future.

• Fixed home loans – Fixed home loans are those that have a fixed rate of interest. This means that the monthly amount that you are charged remains the same throughout the tenure. While this is a steady and safe option for those who do not want surprises, you can potentially lose out on saving money in case the rates drop.

• Split rate home loans – Split home loan reduces the risk of opting for a variable home loan by splitting the total amount into two loans within one. While half the amount is charged a fixed rate of interest, the other half is charged a flexible interest rate.

• Interest only home loans – These are loans that are best suited to investors who have bought property only to resell it further. The amount charged to the borrower is only the interest and the principal remains the same. It is anyway expected that the property will be sold soon and the amount returned to the bank.

There are also other home loans in Australia like the home equity loan, construction loan, low doc home loans and more.