Choosing the right loan

There are many different types of loans to choose from. They can impact you in the short and long term in completely different ways. There are loans that are more flexible and loans that are fixed.

We can go through all the options with you to help understand these differences and how they may affect you.

See more info about each loan type below:

Basic Variable rate loans/No frills home loan

A variable rate home loan at a reduced interest rate with fewer features than a standard variable rate home loan.

Bridging loans

Some borrowers use bridging finance if they need money to buy a new house while they are waiting for their existing house to sell. A bridging loan is obtained over a short period. Higher interest rates are usually charged for this form of finance, and it has to be paid back after an agreed time, usually within 12 months.

Combination loans/split loans

A loan that is a combination of different loan types such as part fixed/part variable or part interest only/part principle and interest.

Commercial Loans

Commercial Loans are used for the purchase, refinance or construction of commercial developments such as retail outlets, warehouses, factories, farms, office buildings, and wineries. It can also be for the development of townhouse and apartment complexes.


  • The interest rates and fees are usually higher than residential loans.
  • Commercial finance usually has a shorter term than residential loans.

Construction or Building loans

A loan that is specifically granted for the purpose of building a new dwelling. These loans are usually drawn down by way of progress payments to a licenced builder. In order to obtain this finance most banks require a fixed price builder’s contract. Loan repayments for the duration of construction are usually interest only.

Credit impaired loans/Non Conforming Loans

A loan for clients who have experienced financial problems in the past, this loan will help to re-build a bad credit rating and obtain a mortgage. Non-conforming lenders are very flexible – even for a bankrupt client or someone with a bad credit history.

Debt consolidation Loans

A loan which refinances debts – especially those with very high interest rates such as credit cards or personal loans and consolidates them into one loan at a lower overall interest rate. These loans are usually covered by a mortgage over a home.

Fixed Rate Loans

A home loan with a fixed rate, where both the interest rate and loan repayments are fixed for the agreed term, regardless of any interest rate variations in the home loan market. The agreed fixed term is usually 1, 2, 3, 4 or 5 years.

At the end of the fixed term these loans often roll to the Standard Variable Rate.

Investment loans

A loan for the purpose of investment, such as buying an investment property or purchasing shares.

Line of Credit/Home equity loans

A loan, where you can access funds up to your approved limit at any time. Your salary can be paid directly into the loan account and you can access the balance of the loan at any time – using a cheque book or card. You can use these funds to purchase shares, go on holiday, buy a new car, start home renovations or any worthwhile purpose.

Low Doc Loans

A low Doc Home Loan is suitable for people who are self employed or on contract and whose income patterns are not regular.

The interest rate and fees are higher but it saves the applicant time and stress by avoiding the trouble of obtaining up to date financials every time finance is required.

The way the banks confirm the applicants income is by a ‘self certifying’ declaration form. Most banks also require an ABN to be registered.

Preapproval/Approval in Principle

A home loan “approval in principle” given by a lender before a property has been found.  This approval is subject to normal requirements being satisfied such as clear credit check, confirmation of employment and income, proof of deposit/savings etc. This type of approval allows a buyer confidence when making offers on a property or attending auctions.

Professional Home Loan Packages

A professional package offers you a range of discounts depending on the loan size.  The features include a discount off the standard variable rate, fee free transaction account, credit card with no annual fee and discounts on various insurance products. These packages usually have an annual fee. The main benefit to these packages is that you can have numerous loans with the discounts and only pay the one annual fee.

Standard variable Rate Loans

A home loan with a variable interest rate, that fluctuates in conjunction with the money market and the Reserve Bank of Australia. Fixed rate loans often roll to the Standard Variable loan at the end of the fixed rate term.


  • This loan has comprehensive features including redraw, offset account and portability.