With so many mortgage options available, it’s important to choose the right structure for your goals and timeframe. Interest rates, fees, and flexibility can vary between lenders and loan types, so understanding your options is key.
Below, we’ve outlined the most common mortgage types and how they can be combined to suit your needs.
A fixed rate mortgage locks in your interest rate for 6 months to 5 years, giving you certainty over repayments. It's ideal if you expect rates to rise, but if they fall, you could end up paying more. We can also advise on capped rate mortgages, which protect you from rising rates while still allowing savings if rates drop.
A floating (or variable) rate mortgage changes with the market, making it flexible for extra repayments without penalties. It’s useful if you plan to fix your rate later or expect market shifts.
A table loan is the most common mortgage, with terms up to 30 years. You pay more interest early on, then gradually reduce the principal. It can be fixed or floating, and fees are often negotiable.
A revolving credit loan works like a large overdraft, combining your income and spending in one account to reduce interest costs. It suits those who want to pay off their mortgage faster and have flexibility with lump sum payments or withdrawals.
Offset mortgages let you link savings and other accounts to your home loan, reducing the amount you pay interest on. For example, with a $500,000 mortgage and $100,000 in linked savings, you only pay interest on $400,000.
An interest-only loan suits buyers planning to renovate and sell quickly, as you only pay interest and free up cash for other uses. It can also be a short-term option before switching to a principal-and-interest mortgage.
A reducing loan repays the same principal each time, with interest decreasing over time, starting with high payments that reduce later.
