With so many products out in the market, it’s now even easier to find the right flexible product to suit your needs. Home buyers can now use their home loan to help them achieve other lifestyle goals while they continue to pay off their mortgage.
Those looking to purchase a property should consider the following to help determine the level of flexibility you may need for your particular circumstances:
- First Home Buyers – it’s a good idea for people in this market to look for a home loan with a low interest rate over a long term, unrestricted additional repayments and a redraw facility.
Being able to make additional repayments, combined with the flexibility of a redraw facility, allows you to build up funds in your mortgage account which may be used in the future for larger expenses, unexpected emergencies, or a rise in interest rates.
- Home Buyers/Renovators – may select a home loan with a low introductory interest rate or ‘Honeymoon rate’, so if you want to renovate as soon as you move in, the low interest rate repayments can help you cover the cost of doing so.
Alternatively you could use this ‘honeymoon’ period to make additional repayments to build up your mortgage account to help cover any future renovation costs or a rise in interest rates.
- Experienced home buyers – buying their second or third property. An experienced home buyer might select a split loan option, so that they can fix the interest rate on part of the home loan and pay the variable interest rate on the remainder of the loan amount.
This can allow you to protect a portion of your mortgage against future interest rate rises while still allowing you to make additional repayments to help reduce your mortgage account.
- Property investors – may focus on rental income, tax savings and set monthly repayments. A basic home loan which will provide a low interest rate over a fixed interest period – allowing for set repayments which will not fluctuate with interest rate changes – may suit the property investor.
The variety of home loans is increasing all the time, providing home buyers with a wide selection of choices. So it is important that you decide on the loan and interest rate options which will best suit your lifestyle.
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