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There are a variety of home loan options available in the market today. New loan products are launched every day. Which home loan is the best one for you?


Some of the popular types of home loans;

Introductory home loan

Introductory home loans usually offer low interest rate to attract borrowers. It is also sometimes known as a honeymoon rate and only for around 12 months before it rises.
The interest rates on these loan can either be fixed or capped. This type of home loan is usually offer the lowest available rates. People usually revert to the standard variable rates after this period is complete.

Standard variable rate loans

This is the most popular type of loan in Australia and offered by most lenders. The rate charged changes according to the interest rates set by the reserve bank so your repayments fall when the official interest rates fall. They also provide additional features like a redraw facility or the ability to make additional payments to pay off the mortgage quickly.

Fixed-rate loans

With fixed rate loans the ineterst rate is set for a particular term, usually from one to five years. The repayments do not rise if the official interest rate rises, this can help you with more precise budgeting. After you fixed period is complete you have an option to either switch to a variable loan or extend another fixed rate term with your loan provider. This loan lacks the flexibility of a variable loan but borrowers who like to know exactly what their repayments will be.

Split-rate home loans

A split rate loan allows you to split your loan to fixed and variable rate. You can select how much to allocate to each and provides more certainty in budgeting.

Some more types of home loans in the market include:

  • Interest only home loan

  • Packaged home loans

  • Low-doc home Loans

  • Non-conforming home loans


This is only a quick overview of the different types of home loans available in the market. A mortgage broker can help you to compare the different home loan products from lenders to help you find the loan that suits you.

You should also use mortgage calculators available online as a guide to how much you can borrow and what your repayments will be.