Lender | |||||||||||||
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Variable | More details | ||||||||||||
FEATURED | loans.com.au – Variable Home Loan 90 P&I
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loans.com.au – Variable Home Loan 90 P&I
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Variable | More details | ||||||||||||
HSBC – Home Value Loan - Owner Occupied (LVR 70% to 80%)
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HSBC – Home Value Loan - Owner Occupied (LVR 70% to 80%)
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Fixed | More details | ||||||||||||
Newcastle Permanent – Fixed Rate Home Loan (1 year)
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Newcastle Permanent – Fixed Rate Home Loan (1 year)
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Variable | N/A | More details | |||||||||||
Beyond Bank – Purple Basic Variable Home Loan (<80% LVR)
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Beyond Bank – Purple Basic Variable Home Loan (<80% LVR)
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Variable | More details | ||||||||||||
Athena Home Loans – Straight Up Owner Occupier (Principal & Interest) - Liberate (LVR70%-80%)
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Athena Home Loans – Straight Up Owner Occupier (Principal & Interest) - Liberate (LVR70%-80%)
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Fixed | More details | ||||||||||||
IMB Bank – IMB Fixed Rate Home Loan (1 year)
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IMB Bank – IMB Fixed Rate Home Loan (1 year)
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Variable | More details | ||||||||||||
Liberty Financial – Liberty Financial Flexible Home Loan LVR >95% (Owner Occupier)
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Liberty Financial – Liberty Financial Flexible Home Loan LVR >95% (Owner Occupier)
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Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of November 8, 2024. View disclaimer.
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The figures provided should be used as an estimate only, should not be relied on as true indication of your home loan repayments, or a quote or indication of pre-qualification for any home loan product. The figures are based upon the information you put into the calculator. We have made a number of assumptions when producing the calculations including:
• Loan term and loan amount: We assume the loan term and loan amount are what you enter into the calculator.
• Interest rates: We assume that the rate you enter, is the rate that will apply to your loan for the full loan term even if you choose an interest only rate which, in practice, will only apply for a limited period after which a different rate will apply.
• Interest and repayments: The displayed total interest payable is the interest for the loan term, calculated on the entered interest rate. We make the following assumptions about repayments:
An interest-only loan requires you to only pay interest on the loan for a fixed time period. Most other home loans require you to cover both the interest costs and the loan balance (principal) upon the start of the term.
Interest-only loans allow you to have lower monthly repayments for a set period of time, usually 1-5 years, where you only pay the interest charged on your loan. At the end of this interest-only repayment period, you will begin to repay the principal loan balance plus the interest, resulting in increased monthly repayments.
Below are some of the pros and cons to interest-only loans.
Pros
Initial monthly repayments are relatively low for the initial period of the loan
If invested, loan qualifies for tax-deduction (on certain loan amounts) during the interest-only period
Helps free up extra cash to help cover other expenses
Cons
Greater risk of spending extra money instead of saving it for future repayments
Interest rate is likely to be higher than a standard principle and interest loan
Repayments will increase once the interest-only period ends
The amount borrowed does not reduce until you start paying off the principle
People with smaller cash flow generally benefit from interest-only mortgages. Home buyers that need to use extra money for other expenses should consider applying for an interest-only mortgage.
However, this type of loan may not be suitable for those who struggle to save money due to the increase in the repayment amount once the interest-only period ends. The risks of not saving enough money could incur when the interest-only period ends.
Qualifications when applying for this loan are comparatively higher than principal and interest loans, so if you have a low credit score approval may be difficult.
It's important to keep in mind in mind the importance of a well-constructed payment plan for interest-only loans, so don't forget to explore and make use of our interest-only mortgage calculator before making a decision.
For an interest-only mortgage, you are only paying the interest, not your loan balance. When the interest-only period ends, you will likely have an increased monthly repayment, as you will begin to pay back the principal as well as the interest charged each month.
Interest-only loans offer lower monthly repayments upon the start of the term for a given period. Low payment expenses give the advantage of increased cash flows for home buyers.
In most cases, having a high credit score and demonstrating the ability to make your repayments will significantly increase your chance of getting approved for an interest-only loan.
On an interest-only mortgage, lenders may charge higher interest rates compared to principal and interest loans, as interest-only loans pose a higher risk to the lender because you aren’t immediately paying down your principal.
Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of 9 October 2024.
^The addition of offset sub-account means your comparison rate will change.
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Savings.com.au Pty Ltd ACN 161 358 363 | Australian Financial Services Licence and Australian Credit Licence 515843