The A-Z of home loan terms and jargon at your fingertips. If there is a home loan type or product feature worth knowing about you’ll find a detailed guide on it here. No matter whether you’re buying your first home or your tenth investment property, the more informed you are, the better your chance of getting the best deal.
With property prices around Australia skyrocketing in recent years, saving up a sizeable deposit isn’t an easy feat, especially when you are paying rent. The median house price in Australia’s capital cities is now $595,000, more if you live in Sydney and Melbourne. This means to save the recommended 20% deposit, you’d need savings of $119,000.
When you begin your home loan search, the headline rate isn’t the only thing you should consider, as there are many home loan features that could save you big bucks and provide you with great flexibility down the track.
Taking out a home loan to purchase a property can be exciting, but what can often dampen your enthusiasm is all the complicated home loan jargon that gets thrown around in the process.In fact, according to a survey by ME Bank, only 41% of Aussies are confident they know enough to find the right home loan for their situation.So if you’re feeling a little frazzled by all the home loan mumbo jumbo, the below guide is for you. Read on as we run through all of the most common terms and meanings you'll want to know about.
If you are one of the many first home buyers out there struggling to save up that ideal 20% deposit, you might be happy to hear you can get in earlier with just a 5% deposit. But before you think “where do I apply?”, we should mention there’s a price to pay and it’s called lenders mortgage insurance.
Have you built up some equity in your home through extra repayments or your property has appreciated in value? Then you could be eligible for a line of credit loan that allows you to draw on a portion of that amount to fund things like an upcoming renovation or new family car.
When it comes to taking out a home loan in Australia, one of the common terms you’ll see sitting within the mortgage product information is “LVR". But if you’re one of the many home hunters wondering “what is LVR?” and have no clue what the abbreviation stands for, let this quick guide answer the question.
If you are a freelancer, self employed worker, small business owner or contract worker getting a standard home loan can be difficult when you don’t have proof of salary documents like payslips or group certificates. This is where a low doc home loan comes in.
Taking out a home loan can be a pretty clear cut deal focused solely on securing financing to help you purchase property. But if you want to sort out a few other financial needs with the same institution, you might consider a packaged home loan.Many lenders present packages as a way for customers to save money across the life of their mortgage, alongside other financial products. An interest rate discount is on the table, along with more cost-saving features than a ‘no frills’ home loan, in exchange for you signing up to a bundle deal of the institution’s other products like credit cards, insurance or savings accounts. It sounds pretty swish, but it’s super important to consider all the loan costs, the additional features and discounted interest rate and size it up against other home loan types. Then compare this to the overall cost of holding the extra financial products separately or with other institutions. It may be convenient to have everything in one package, but it’s not automatically the most affordable option, even with the discounted interest rate.Once you’ve done your mathematical due diligence, then you can check out the packaged home loan options below.
When it comes to paying off your home loan, you’ll be able to choose between two options: pay off both the principal and interest, or pay interest only. What you decide will depend on your reasons for buying the property as well as your financial circumstances. For a breakdown of what you need to know about each repayment type and what they mean for owner occupiers and investors, read on below.