What is a home loan and how does it work?
If you are planning to buy any land or property, then the amount required to cover the purchasing of the property that is borrowed by a lender is known as home loans. Generally, when you borrow money from a financial institution, you would be knowing the exact amount required. So based on the amount of money you can choose the loan tenure as well.
Types of Home Loans
There are various kinds of home loans in Sydney.
Variable Rate Home Loans
This type of home loan has a variable interest rate, which means that the interest rate on the repayment amount is not fixed and it keeps changing. Based on the official cash rate, the interest rate would keep on changing, causing fluctuations in the repayment amount. When the interest rates are high, the instalments rise while the interest rate reduces the instalments decrease.
Fixed-Rate Home Loans
In this loan type, the rate of interest is locked for a certain period. You can pay the home loan instalments at the fixed interest rate for nearly 1 to 5 years. This is beneficial as irrespective of the rise in interest rate there won't be any change in the repayment value. But if the interest rate reduces, still there won't be any change.
Interest-only Home Loans
This loan type as the name suggests will give you an option to pay only the interest amount on the borrowed loan for a set period. The repayments in this loan will not move towards the borrowed amount which eventually will not reduce either.
Refinancing Your Home Loan
To save the existing home loan, refinancing is a good way. With a little bit of research on the various types of loans home loans providing lower interest rates, you can switch. Home loan experts can help you out in refinancing.
See Also: Rent Vs Buy Calculator for Australia
What is the interest rate on home loans?
While considering borrowing a loan from the market, one of the most important factors to consider is interest rates. The interest rate is of different kinds and depends on the loan term, your credit score, and many other minute factors. Types of interest rates are:
- Partially-fixed rate
- Introductory rate
How can we help you find the right loan?
APW Finance has been in this industry for a long and thus has many connections with the local financial experts. These experts would easily provide you with all kinds of advice and guidance required to make the right decisions. We assist in all kinds of loans like cars, home, insurances, etc. Our expert mortgage broker would streamline the entire loan procedure for you as per your requirement and repayment capacity.
Check Our Home Loan Calculators
There are various kinds of calculators available with us that would tell you exactly the repayment value, interest rate and the total amount to be paid all through the loan tenure. These calculators like the mortgage switching calculator are highly reliable. You need not do any more guesswork, just add in the required values and you will get the result immediately through our home loan estimator.
You can have an estimate of the following things:
- The potential amount you can borrow
- The estimation of repayments
- The potential amount of interest only mortgage repayments (if interest-only loans)
- The comparison of before and after the interest-only term ends (if interest-only loans)