Overview of Australian Residential Mortgage Choices
Mortgage broker Melbourne– Owning a home has been the great Australia dream! Everyone wants to own a home and an investment property. The great financial crises had an enormous impact on shares, and they become less attractive to investors. Thus many shares investors still recovering from losses incurred. The best option remains to be property investment.
There four main mortgage choices popular in Australia. The four are fixed interest rate, standard variable rate, basic rate and the split rate home.
Fixed Interest Rate
The fixed interest rate Australian mortgage as the name suggests it has a fixed rate interest for a set term usually one to five years. When the mortgage loan expires, the borrower can roll over the loan into a fixed term loan. The current interest rate remains or its convert to a variable rate loan. Every mortgage broker in Australia wants to deal a fixed interest rate mortgage, especially when the interest rate is rising as borrowers can lock into a rate. This offers a lot of peace of mind and stability.
The problem arises, when a bad thing happens, and the interest rate has to fall.
- An example, if the fixed rate is 8 percent and the interest rate drops to 6 percent the borrowers can’t take advantage of the lower interest rates plus the associated lower repayments.
The fixed interest rate loans are more expensive than the variable rate. The tradeoff mortgage brokers sell the security and stability offered by fixed rate.
Standard Variable Rate
Mortgage variable rate is the most common in Australia and considered a principle and interest type home loan. Also, visit this link http://www.freedomhillroc.org/ways-cheap-mortgage/ for more to know. Its main advantage is that there is no penalty for paying off the loan more quickly if you have the capabilities.
The mortgage broker allows extra payment or more regular payment than outlined. Variable rate home loan have a redraw facility that means you can have easy aces to those additional funds if needs.
The standard variable rate home is the best when selling your existing house to purchase a new one. Take an existing loan along with you, thus saving on loan fees.
Basic variable rate
The basic variable rate home loans have a cheaper interest in the Australian market. Although, these doesn’t mean they’re most affordable loans there several extra charges such as monthly account management fees. The home loan lacks all the features of home loans. Basic variable rate home loan have few redraw facilities thus not best for top mortgage brokers.
If you are looking for a home loan very attractive in uncertain times, then you got a split rate home mortgage. A combination of a viable interest home and fixed interest loan forms the split rate home mortgage. The mortgage broker advises the borrower to a part of the fixed interest rate to keep the rate low and consistent. The homeowner then takes a portion of the loan with a variable interest rate.
Hope now you are ready to go with the variety of Australian mortgage choices and more at www..mortgagebrokerco.com.au. The loan that is right for you will depend on upon your individual circumstance and goals. It is recommended that you talk to Mortgage broker Melbourne about what type of loan might be right for you.