Home loan comparisons made easy
Compare home loan features with ITP
All Australian home loans are not alike. As you can see from the guide below, apart from different home loan rates, their features are many and varied. A friendly mortgage broker at ITP Home Loans is the right person to go through all the home loan comparisons with you and advise you on the type of mortgage for your needs.
Typical loan features worth considering
An offset account is an account linked to your home loan in a way that reduces the amount of interest you have to pay. Basically, the interest earned on the offset account is applied to reduce the interest payable on the home loan account. A mortgage offset account is a great loan feature to have.
A popular home loan feature is the redraw facility, whereby you can withdraw any additional repayments you’ve already contributed to pay off your loan. Many account holders like the peace of mind that comes with being able to access their funds at any time, if they have been paying extra income or savings into their home loan account. Be aware some institutions may charge a redraw fee, limit you to a few redraws per year or have a minimal redraw amount.
Choosing a loan that allows you to make extra repayments without any fees or charges for doing so means reducing your overall mortgage and ultimately paying off your debt faster. Making extra repayments can potentially cut your loan down by years and save you thousands.
|Principal & interest
Your mortgage repayments are made up of two portions – the principal (the amount you originally borrowed) and the interest (calculated on the principal you owe). In having a combined principal and interest loan, you will actually be reducing the amount you originally borrowed with each monthly repayment.
An interest only loan is where the borrower, for a set term, pays only the interest calculated on the amount you owe. Choosing interest only means your monthly repayments are lower, however the principal balance remains unchanged and you are therefore not reducing your loan.
|Switch to fixed rate
Allows the borrower the flexibility to switch from a variable to a fixed rate home loan. Each of these loan types offers benefits, however having the flexibility to switch to suit your individual situation throughout the life of your home loan is a smart feature.
Many lenders offer repayment holidays from your home loan, meaning for a set period your lender allows you to take a break from making repayments. Some lenders require you to have made extra repayments before taking a repayment holiday, whilst others will grant this regardless. Repayment holidays are beneficial when faced with a change in financial circumstance.
A top up mortgage allows homeowners to access the equity in their homes in order to fund other projects, such as funding home improvements, paying for school fees, as a deposit on an investment property, buying a new car or consolidating other debts. Minor renovations are the most common reason people apply for a top up. Most lenders place limits on top ups, but some remain uncapped.
|Direct salary credit
A direct salary credit allows you to pay your salary directly into your home loan account, therefore reducing the amount of interest you have to pay on the principal balance.
A portable loan allows you to take an existing loan to a different property when you move, saving the hassle of loan refinancing. Many home loans offer loan portability as a standard feature, however it is worth checking, given it likely you will move property within the term of the loan (most often 25-30 years).