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A fixed interest rate loan has an interest rate that remains the same for the entire term of the loan.

Key Features:

• Stability: Your repayments stay the same throughout the term, making budgeting easier.
• Peace of mind: You’re protected from interest rate hikes.
• Potential downside: If interest rates drop, you won’t benefit from the reduced rates.

Variable interest rate loans have an interest rate that changes over time, based on market conditions.

Key Features:

• Interest rates: They fluctuate depending on the broader economic environment, which means your repayments can go up or down.
• Flexibility: These loans often come with features like the ability to make extra repayments without penalty, which can reduce the overall interest paid.
• Potential advantage: If rates drop, your repayments decrease, but if rates rise, your repayments increase.

A packaged rate loan, also known as a package home loan, bundles your mortgage with other banking services offered by the lender.
Key Features:

• Discounted rates: Often comes with a lower interest rate compared to standard loans.
• Bundled services: May includes a credit card, mortgage offset account, and sometimes savings or everyday banking accounts.
• One fee: You pay a single package fee, which covers all the bundled services, instead of separate fees for each service.

It’s a great option if you want to simplify your banking and potentially save on interest and fees.

A split loan is when you divide your home loan balance into two or more loan accounts. A split loan allows you to tailor your home loan in a way that works best for you and your financial goals.

Whether you want to get ahead on your variable rate loan with no cap on extra repayments or are interested in the security of a fixed rate loan, split loans allow you to create the right home loan to suit your needs.

You make regular repayments on the amount borrowed (the principal), plus you pay interest on that amount. You pay off the loan over an agreed period of time (loan term), for example, 25 or 30 years.

Your repayments only cover interest on the amount borrowed. You aren’t paying off the principal you borrowed, so your debt isn’t reduced. Repayments may be lower during the interest-only period, but they will go up after that.

Interest in Advance, also known as prepaying interest for the year ahead, is an option that lets you prepay next financial year’s interest on your loan.

By paying an upfront lump sum, Interest in Advance can save you from having to make monthly payments during the year.