Home Loan Options

Home Loan Options

Choosing the right loan can be challenging, with many options to choose from, making the right decision can be difficult. Here are a few things to consider before finalising your decision:

Both fixed and variable

The great thing here is you don’t have to choose one over the other. If you’d like to diversify your mortgage with a percentage fixed and a percentage variable you can – giving you the best of both worlds.

Having one loan fixed and one loan variable is referred to ‘splitting’ the loan. This means you’ll have two separate loan accounts for both options, so you get the comfort of a fixed rate with the flexibility of a variable option.

Interest only or principal and interest loans

When paying a principal and interest loan, the monthly repayments comprise of the interest and a part of the principle (the loan you borrowed). The principle is gradually reduced over the loan term (usually 30 years) until it’s fully paid.
Interest only repayments only cover the interest charged on the loan amount, the principle is not reduced when making interest only repayments (although some lenders will allow you to make additional repayments). At the end of the interest only period the loan will change to principal and interest payments – unless otherwise arranged with your lender for another interest only period.

Interest only loans allow you to make smaller repayments however the loan principle isn’t reduced over the interest only period.

To find out how Hunter Galloway can help you call Nathan Vecchio on 0410 000 689.

For information on Hunter Galloway or to find out what a line of credit is.