The home dream is real and home loan products exist to help you make it a reality.

Whether you’re looking for a preliminary loan to start you on the real home ownership path, transitioning from fixed-rate to variable interest rate loans, or having trouble financing that ‘landed’ property, there are a variety of home loans to suit you.

Depending on your age and financial health, you could qualify for one of the most popular types of home loans in Australia. Continue reading to learn more.

1. Fixed Rate Home Loans

There are several types of mortgages available in Australia, and the most popular ones vary depending on the borrower’s needs and circumstances. This type of loan offers borrowers the security of knowing that their interest rate will not change for the life of the loan, which is usually between 25 and 30 years. This type of loan is also attractive to borrowers because it often comes with a lower interest rate than variable rate loans.

Fixed-rate home loans offer borrowers the stability of knowing their repayments will remain the same for a set time, usually between one and five years.

2. Variable Rate Home Loans

Variable rate home loans give borrowers the flexibility to make additional repayments, redraw funds, or make lump sum payments, but their interest rate will fluctuate with changes in the market. The interest rate on a variable rate home loan can change over time, which may mean your monthly repayments will increase or decrease.

For guidance and other information on split loans, you can view here.

3. Tracker Home Loans

A tracker home loan is a loan that tracks the movement of a benchmark interest rate, such as the Reserve Bank of Australia cash rate. This means that when the cash rate changes, your interest rate will also change, either up or down.

You can usually choose how often your interest rate will adjust – monthly, quarterly, or annually.

4. Offset Home Loans

Offset home loans offer many advantages, including the ability to offset your loan against your savings, which can save you a considerable amount of money in interest payments. Additionally, offset home loans tend to have lower interest rates than other types of home split loans, making them an even more attractive option.

5. Capped Rate Home Loans

A capped rate home loan is a loan where the interest rate is capped, or fixed, for a certain period. This type of loan is popular because it offers borrowers protection from interest rate increases. The interest rate on a capped rate home loan is usually higher than the interest rate on a standard variable rate loan, but it is still lower than the interest rate on a standard fixed rate loan.

Capped rate home loans are available from most lenders in Australia.

Types of Home Loans According to the Borrower’s Preferences

The most popular types of home loans in Australia differ depending on the borrower’s needs and preferences. However, some of the most popular home loan products include Variable rate home loans, fixed-rate home loans, Tracker home loans, Offset Home Loans, and Capped rate home loans.

Speak to a mortgage broker to find out which type of home loan is right for you and start your mortgage application.

While you’re keeping yourself up-to-date on the latest financial information, check out the rest of our blogs for more crucial tips and tricks to help improve your personal finance.