What is a mortgage? A mortgage (also known as a home loan) is a long term loan used to purchase a house or land. Home loans are generally repaid over a term of 25-30 years, although the term can be shorter. The interest rate is a main factor to watch out for because it can have a massive impact on y
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Flexible home loans from Resimac, a major Australian non-bank lender. Suitable for borrowers with good or impaired credit histories.
A mortgage (also known as a home loan) is a long term loan used to purchase a house or land. Home loans are generally repaid over a term of 25-30 years, although the term can be shorter. The interest rate is a main factor to watch out for because it can have a massive impact on your repayment amount.
Fixed vs Variable interest rates. You have the option to decide whether you want to choose fixed or variable interest rates. Fixed interest rates are locked in for a set period of time while variable interest rates can go up or down at any time. Fixed interest rates can help you with budgeting as the repayments stay the same. Variable rates generally allow you to contribute extra payments which reduces the overall interest cost.
Comparison rate. The comparison rate is calculated on a hypothetical mortgage amount by taking the interest rate, plus all fees and charges into consideration. It's a way to compare mortgage products by getting an idea of the overall percentage you'll be paying on your desired mortgage amount.
Offset account. A very worthwhile feature to have, an offset account is attached to the mortgage and works like an everyday savings account. Any amount sitting in the offset account directly offsets the loan amount, meaning you are charged less interest. For example, if your mortgage is $200,000 and you have $30,000 in an offset account, you will only be charged interest on $170,000.
Additional repayments. Most loans give you the ability to make extra repayments but it's sometimes not an option with fixed rate loans. Extra repayments could see you save years on your loan and thousands of dollars in interest charges.
Redraw. A redraw facility allows you to withdraw any money you've accumulated in your loan by making extra repayments. This is a really great source of funds should you need to access cash.
Rate splitting. A portion can be split into fixed with the other variable. This allows for an aspect of stability due to the fixed portion while allowing the flexibility to make extra repayments and take advantage of any rate cuts.
Loan-to-value ratio (LVR). LVR is the percentage amount the lender will lend against the property value. For example, a maximum LVR of 80% means the lender will offer up to 80% of what the house is worth, meaning you'll need to come up with the other 20% yourself as a deposit. Generally a deposit of under 20% will require you to pay lenders mortgage insurance (LMI).
