Australia offers a wide variety of home loan products. Understanding the key types and features helps you choose a loan that matches your financial goals and risk tolerance.
Variable Rate Loans
Interest rate fluctuates with the market. Offers flexibility with unlimited extra repayments, redraw, and offset accounts.
Best for: Those who want flexibility and can handle rate changes.
Fixed Rate Loans
Rate locked for 1-5 years, providing repayment certainty. Limited extra repayments and significant break costs apply.
Best for: Those wanting budget certainty or expecting rates to rise.
Split Loans
Part fixed, part variable. Enjoy some certainty while maintaining flexibility on a portion.
Best for: Those who can't decide between fixed and variable.
Interest-Only Loans
Pay only interest for a set period (usually 1-5 years). Lower repayments but no equity built through principal payments.
Best for: Investors maximising tax deductions or those with short-term cash flow constraints.
Offset Accounts
Transaction account linked to your loan. Balance offsets loan principal, reducing interest charged.
Best for: Those with savings who want to reduce interest while maintaining access to funds.