Which option’s best for me?

  • I want my repayments to stay the same to help me budget.

    • Table, fixed interest rate

      How it works:

      Your repayments are calculated to spread evenly over the whole term of your loan (up to 30 years), and stay the same throughout the fixed rate period (or periods. You can split your loan over any number of fixed terms). At the start of your loan, most of your repayment covers interest, and by the end, most of your repayment covers principal (the amount you borrowed).

      Pros Cons
      It's easy to budget as your regular repayments stay the same throughout your fixed rate period Fixed regular payments might be difficult to make for people with irregular income
      You can borrow up to 95% of the property's value, or up to 100% with a Welcome Home Loan Repayments of more than 5% of the loan in any 12 month period may result in an early repayment fee and/or a fixed rate break cost.
      You can make extra payments of up to 5% of your loan in any 12 month period.  

  • I want set repayment periods with the ability to make extra payments whenever I like.

    • Table, variable interest rate

      How it works:

      Your repayments are spread evenly over the whole term of your loan (up to 30 years), and are calculated depending on the interest rate at the time. At the start of your loan, most of your repayment covers interest, and by the end, most of your repayment covers principal (the amount you borrowed).

      Pros Cons
      If interest rates fall, your minimum repayment will decrease – or you could keep your repayments the same and pay your loan off quicker If interest rates rise, your minimum repayment will increase
      You can borrow up to 95% of the property's value, or up to 100% with a Welcome Home Loan Your repayments may change whenever interest rates change, so it's harder to budget.
      You can increase repayments and make lump sum payments anytime without penalty.  

  • I want the best of both worlds – certainty around what my repayments will be, and the ability to make extra repayments whenever I like.

    • Table, part fixed interest rate and part variable interest rate

      How it works:

      Your loan is made up of two portions – one on fixed rate, and one on variable rate. You decide how much you want on fixed (which can be split over any number of fixed terms), and how much on variable. If interest rates change, repayments for the fixed portions of your loan remain the same, while minimum repayments for the variable portion will change.

      Pros Cons
      You can borrow up to 95% of the property's value, or up to 100% with a Welcome Home Loan If you have to repay the loan in the early stages, you won't have paid much off the capital, as your payments at the start mostly pay off interest
      You get a mixture of certainty around your repayments and flexibility with making extra payments Your repayments may change whenever interest rates change, as the variable section of your loan will go up and down with the market
      You can make extra repayments on the variable portion anytime, with no penalty, and you can make extra repayments of up to 5% of the fixed portion in any 12 month period. Repayments of more than 5% of the fixed portion of your loan in any 12 month period may result in an early repayment fee and/or a fixed rate break cost.

  • I want flexibility around re-drawing and using funds.

    • Revolving, variable interest rate (fixed rate not available on revolving loans)

      How it works:

      Revolving home loans work like a large overdraft. Your pay can go straight into the account, and bills can be paid from it only when they're due. By keeping as much money as you can in the account at any time, you pay less interest because interest is calculated daily.

      Pros Cons
      If you're well organised and budget well, you can pay off your home loan quicker. You have to manage your home loan carefully. If you keep withdrawing from your revolving home loan, you may end up having more principal to pay back, so it may take longer to pay it off.
      You can make lump sum repayments at any time and withdraw money up to your limit as you need it.  
      Ideal for people with irregular income as there are no fixed repayments, but you do need to meet the minimum interest payments.  
      Putting extra funds into this account rather than a separate savings account can provide you with bigger interest savings.  

  • I want a short term loan with minimum repayments

    • Interest only, fixed or variable interest rate

      How it works:

      With an interest-only loan, your regular repayments are usually lower, because they're just covering the interest. However, at the end of the loan, you still have the original amount of principal to repay. They're available for periods of up to five years.

      Pros Cons
      These are a great way to keep outgoings to an absolute minimum. You have more cash for other purposes, like renovations. You're not repaying any of the principal of your loan, so you still owe the full amount at the end of the term.