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A variable rate home loan is a home loan where the interest rate varies when either the Reserve Bank of Australia increases or decreases the official cash rate, or the banks or lenders change them. Most banks or lenders offer discount basic variable home loans. These are generally a 'No Frills' home loan but have many great features like redraw, and the ability to pay as much towards your loan, as you can afford. Variable rate home loans are generally have a lower interest rate than other types of home loans.
If you would like some more information on variable rate home loans, contact Perth Mortgage Broker Group , or call Troy on 0411 229 602, 7 days a week.
A fixed rate home loan is a loan that is fixed at a certain rate for a period of time. Generally speaking most banks offer fixed rate home loans over 1,2,3,4 and 5 years. Some lenders offer 7,10 and 15 year fixed rate home loans. With a fixed rate home loan, generally after the fixed rate period ends, your home loan will revert to the standard variable. You can re fix your home loan again, at that stage, but the bank or lender may charge a loan modification fee.
If you would like some more information on fixed rate home loans, contact Perth Mortgage Broker Group, or call Troy on 0411 229 602, 7 days a week.
A Line of credit is a home loan that is more like a credit facility. With this type of home loan you have a credit limit, and if you owe nothing, you pay nothing that month. If you owe $10,000, your repayment that month will be the interest charge on $10,000.
Lets look at a couple of example to see how a line of credit works. Lets assume the credit limit is $100,000. If you owe $10,000 your will pay monthly repayments will be interest charges on $10,000 and you will have $90,000 of available credit. If you have spent some more money, on a car for example, and now owe $40,000 on your line of credit, your monthly repayment will be the interest charge on $40,000, and have $60,000 available credit. A really handy facility.
A real advantage to a line of credit is that you can have a balance of $0, and the limit remains for the life of the home loan. Alot of investors, share traders like this facility, as its handy to have that available credit should they want to invest. A line of credit is a great tool for people who like to have a cheap credit facility available should they choose to use it.
A line of credit generally has a variable interest, although a few banks or lenders offer a fixed rate line of credit. The interest rate on a line of credit is generally a little higher than a standard variable rate home loan, but generally only 0.2% to 0.5% higher.
If you would like some more information on line of credit home loans, contact Perth Mortgage Broker Group , or call Troy on 0411 229 602, 7 days a week.
An offset account home loan generally has a savings account in which the balance of the savings account directly offsets against the balance of the home loan. For example if you have a home loan of $100,000 and you have a balance of $10,000 in your savings/offset account, the interest charged on the home loan would be the balance of $90,000 ($100,000 Home loan minus $10,000 in the savings/offset account). If you had $40,000 in the offset account, you would be charged interest on $60,000. Interest on home loans is generally calculated daily, so the interest charged on the home loan is the home loan itself ($100,000 in our example) minus the average daily balance of the offset account. This is a great way to save interest, on your home loan, as an offset account is generally a savings account, and can be used as your day to day transaction account, with a debit card, bpay etc.
If you would like some more information on offset account home loans, contact Perth Mortgage Broker Group , or call Troy on 0411 229 602, 7 days a week.