Basic Home Loans | Investment Loans | Variable

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Basic Home and Investment Loans

Many lenders offer a class of home loan that has a lower variable interest rate than their standard variable rate loans however these loans come with fewer features. Usually, these loans do not come with an offset account and the fees when accessing the redraw facility can be expensive.

Basic home loans allow you to make additional repayments on your mortgage and then have access to the additional repayments if you need to. They are a variable rate loan meaning that they can change when the lender chooses to increase or decrease the rate, generally in line with the Reserve Bank of Australia's cash rate.

What to watch out for:

▪ Additional repayments are excellent for reducing the interest paid and the loan term

▪ Fees – look for loan products with nil redraw fees

▪ Minimum redraw amount – look for low redraw minimums

▪ Number of redraws – look for unlimited redraw transactions

▪ Lenders allowing direct salary crediting into your loan account so you can redraw the funds

as you need them

Advantages

▪ Good for those with a single loan or those borrowing small amounts

▪ Extra repayments can be redrawn and used for any purpose

▪ Some basic loans can be just as advantageous as a fully featured loan

▪ Usually cheaper than loans with an offset account attached

▪ A mortgage reduction program can be helpful in managing this type of loan

Disadvantages

▪ Loan may have upfront and ongoing fees

▪ Redraw facility may have fees attached and minimum amounts

▪ Not as flexible as a loan with an offset account

There are many basic home loans that can be just as effective as standard variable rate home loans. To find the better basic home loan types click the link below.

Compare Basic Home Loans