Loan Features

It’s common to focus on securing the lowest interest rate when shopping for a home loan.

‘No frills’ loans can be great if that’s what you’re after…but have you considered which other loan features may benefit you?

At Loanright we’re able to walk you through how each of these features applies to your scenario.

After we assess your needs, we have access to hundreds of loan products from more than 50 lenders. We’re sure to find the loan product that’s right for you.

Just a few loan features we can offer you include:

Offset Account

Allow your savings to work for you! With an offset savings account linked to your home loan, the more you save, the lower your repayments will be.

An offset account can reduce the interest on your loan while maintaining instant access to your funds. It’s like an everyday account that offsets your loan depending on the funds available in the savings account.

Money paid into an offset savings account is deducted from the balance of your home loan before interest is calculated

When you want to access these funds, it’s usually quite simple to withdraw the cash via EFTPOS and / or an ATM.

Redraw Facility

A redraw facility allows you to make extra repayments on your loan to reduce the length of your loan.

Extra repayments can shave years off your home loan, reducing the overall interest you pay. And should you require cash for any purpose, you can draw back these additional payments.

The ability to redraw these funds is a great safety net for life’s unexpected expenses.

A redraw facility may not be as flexible as an offset account.

Extra Repayments

If you have the capacity to pay more than the required repayment, you could benefit from a loan that allows extra repayments to be made.

Extra repayments are the best way to pay off your home loan sooner and reduce the amount of interest you pay.

Some lenders penalise you for making additional payments, so if you may have the capacity to make extra repayments, mention this to your Broker so we can secure a suitable loan product.

Weekly or Fortnightly Repayments

Mortgage repayments are often paid monthly.

However, if you’re paid on a weekly or fortnightly basis, you could reduce the length of your loan by making more regular payments.

By reducing the length of your loan, you could save on interest charges.

Interest Only Repayments

Are you looking to buy an investment property with low monthly repayments? An interest only period may be a suitable loan feature for you.

With interest only repayments, you don’t pay off any of the principal, so your monthly repayments will be lower – freeing up cash to use elsewhere.

This could allow you to direct more of your income into other commitments such as an owner-occupied property that is not tax deductible (you’ll want to reduce this debt sooner), renovations or other investments.

Investors who take out this type of loan generally aim to pay off the principal when the property is sold. To benefit from this strategy, you would need to ensure the property has achieved capital growth before it’s sold.

Repayment Holiday

Are you taking maternity leave or an extended holiday? Perhaps you’re completing study or are between jobs?

In any of these situations, the ability to take a ‘repayment holiday’ for an agreed period of time can be very useful.

‘All in One’ Home Loan

Would you like to seamlessly use extra cash flow to pay off your mortgage?

Consolidate your accounts by combining your home loan with a cheque, savings and credit card account.

With an ‘All in One’ home loan you can have your employer pay your salary directly into your mortgage account.

The longer the cash is in the account, the less interest you will pay. The downfall is if you spend your income too quickly, interest rates on these loans can be higher.