Understanding Home Loan Types
Choosing the right home loan is key to successful property ownership. Here’s a quick overview of common Australian mortgage types to help you make an informed decision:
Variable Rate –The interest rate fluctuates with market conditions. Your repayments can go up or down
Fixed Rate – Your interest rate is locked in for a set period (e.g., 1, 3, or 5 years). Your repayments remain the same during this period, regardless of market changes. After the fixed period, the loan usually reverts to a variable rate.
Split Rate – A combination of fixed and variable interest rates. A portion of your loan is at a fixed rate, and the other portion is at a variable rate.
Interest-Only Loan – You only pay the interest on the loan for a specified period (e.g., up to 5 years). The principal balance remains unchanged during this time. After the interest-only period, the loan typically reverts to a principal and interest loan, meaning you’ll start repaying the borrowed amount as well.
Line of Credit – Provides you with a flexible credit limit secured against your property. You can withdraw funds as needed and only pay interest on the amount you’ve used.
Investor Home Loan – Specialised loans with features such as interest-only repayment options, tax benefits, and tailored lending criteria to support property investment strategies.
Principal & Interest Loan – Requires repayment of both the loan principal and interest, reducing the total loan balance over time. This is the most common type of home loan for owner-occupiers.
Our Home Loan Brokers Services in Melbourne
We provide a range of home loan solutions to suit different needs:
Pathways to Buying Your First Home in Australia: LMI and Other Options
Save a 20% Deposit & Avoid LMI
Lenders Mortgage Insurance (LMI) is required to apply for a home loan with less than a 20% deposit. Saving this amount helps avoid extra costs.
Save Less Than a 20% Deposit & Pay LMI
If you have a lower deposit, LMI allows you to secure a home loan, but it adds to your borrowing costs.
Use a Guarantor & Avoid LMI
A guarantor loan allows a family member to secure your loan, eliminating the need for LMI.
First Home Guarantee (FHBG) & Avoid LMI
Victoria’s FHBG scheme helps eligible first home buyers secure a home with a lower deposit and no LMI.
Know Your Credit Score: A Key First Step
A strong credit score improves your chances of getting the best home loan rates available. You can check your credit score through various Australian credit agencies. Improving it before applying for a home loan can increase approval chances.
Our Simple Home Loan Process
Lower Interest Rates: Secure a lower interest rate and save thousands of dollars over the life of your loan.
Loan Pre-Approval – Get pre-approval to understand your borrowing capacity.
Property Search – Find the right home with confidence.
Formal Loan Application – Submit all necessary documents.
Valuation & Approval – The lender assesses the property and finalizes approval.
Settlement – Finalise the loan and move into your new home.
Get in Touch with Our Home Loan Broker Experts in Melbourne
Take the stress out of securing a home loan with Novelty Loan. Our experienced mortgage brokers will guide you through the process, helping you find the best loan options tailored to your needs. Contact us today and take the first step toward owning your dream home!
Ready to start your home loan journey? Contact Novelty Loan today for an expert home loan mortgage broker and a personalised home loan experience. Our Melbourne brokers are here to help you every step of the way.
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With expertise in handling low credit scores, we offer tailored loan solutions designed to meet individual needs. Our focus is on finding flexible options and providing guidance to help navigate financial challenges and achieve your goals effectively.
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