Residential Lending
Overview of Residential Home Loans in Australia
When choosing a home loan in Australia, it’s important to understand the different types available and how they fit your financial situation. Here’s a simple guide to the main options:
Variable Rate Loan
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The interest rate fluctuates with the market.
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Pros: Flexible—allows extra repayments, which can reduce your loan term.
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Cons: Rates can rise, increasing your repayments.
Fixed Rate Loan
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The interest rate remains constant for a set period (usually 1-5 years).
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Pros: Stability—your repayments stay the same, which is beneficial if rates rise.
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Cons: Less flexibility, often with restrictions on extra repayments.
Split Loan
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A combination of fixed and variable rates.
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Pros: Offers the benefits of both fixed and variable loans.
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Cons: Can be more complex to manage.
Interest-Only Loan
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You pay only the interest for a limited time (1-5 years), after which you start paying off the principal.
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Pros: Lower repayments initially, helpful for short-term cash flow.
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Cons: Higher repayments later when principal payments kick in.
Low-Deposit Loan
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You can borrow more than 80% of the property’s value, but you’ll likely need Lenders Mortgage Insurance (LMI).
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Pros: Allows you to enter the market with a smaller deposit.
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Cons: LMI adds to costs, and higher loan amounts mean paying more interest over time.
Offset Account Loan
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Linked to a savings account that reduces the interest charged on your loan.
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Pros: Potential to save on interest while maintaining access to your funds.
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Cons: Often comes with higher fees.
Key Loan Features to Consider
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Extra Repayments: Some loans let you make extra repayments without penalties, helping you pay off the loan faster.
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Redraw Facility: Access any extra payments you’ve made, providing flexibility when you need it.
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Loan Portability: The ability to transfer your loan to a new property without refinancing.
Each loan type has its advantages and drawbacks, so it’s wise to consult with a mortgage broker to determine the best fit for your situation.
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Choose a time that works for you and speak with us about your loan needs. All appointment times are shown in Australian Eastern Standard Time (AEST).
What happens after you book?
From understanding your situation to comparing loan options, preparing documents and planning the next step, BV Finance guides you through the process with clarity.
We take time to understand your income, goals, deposit, current loan situation or investment plans, so we can identify what needs attention first.
Based on your situation, we help compare suitable banks, lenders, interest rates, loan features and potential costs.
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We guide you through the documents needed for your home loan, refinancing, business loan or other finance application.
We help you understand whether it makes sense to apply now, seek pre-approval, review your cash flow or wait for a better timing.