Rising interest rates are a concern for many people. A fixed rate home loan protects you from potential rate rises during the fixed rate period of your loan.

The benefit of a fixed rate home loan gives you peace of mind in knowing that your repayments will not increase during the fixed rate term, giving you certainty in your budget planning.

The options available for fixed rate home loans include periods ranging from 1 — 5 years and you may wish to split your loan and have part fixed and part variable.

A variable rate home loan is the most popular home loan. Variable rate home loans offer many and varied features including interest only or principal and interest repayment options. Variable rate products are available with no ongoing monthly fees at competitive rates.

Variable loans can also offer the benefit of making extra repayments at no additional cost and allow you to split your loan and have access to a broad range products with features including:

• flexibility in repayment options
• ability to make extra repayments
• redraw facility
• split loan options
• portability (substitute security)
• direct salary crediting
• nil transaction fees
• debit / credit card
• offset savings account

What ever you need or purpose at powerhouse mortgages we have a variable rate home loan to suit every lifestyle.

Loan splits are a very effective way of making your loan work for you by providing you with the security of a fixed rate loan and the flexibility of a variable rate loan.

Most people fix their loans because they are concerned about rising interest rates. Whilst fixing your loan gives you certainty and security, it does have disadvantages. For example, you are unable to make extra repayments without penalty. Variable rate home loans however do allow you to redraw and make extra repayments.

Therefore, splitting your loan into part fixed and part variable gives you:

Security:

avoid interest rate rises and minimise repayments

Flexibility:

make extra repayments and redraws without penalty

Loan splits may be applied to a line of credit, offset or standard loan.

Principal is the amount borrowed or the remaining unpaid balance. It forms part of the monthly payment that reduces the outstanding balance. Interest is the fee charged for borrowing money.

Principal and interest loan repayments are calculated to reduce your principal and pay the interest over the term of the loan. A typical principal and interest loan has a 25 or 30 year term.

Interest Only repayments are when you repay the interest only charges that are incurred on the balance of the loan. There is no reduction on the balance of the loan during the interest only period.

You may want to consider an interest only option to:

• minimise your repayments
• keep debt maximised for taxation purposes
• improve net cash flow
• apply a strategic borrowing structure

Be smart, get a pre-approval first and get your finance sorted so that you can put all your energy into finding your first home. When you find the home you want having pre-approval will minimise the risk of your contract falling through because your finance wasn't approved within the fourteen day contract deadline.

Pre approval gives you negotiating power and an advantage over other buyers.

Pre approval gives you a maximum amount that you can borrow helping you in you choosing the right property.

Pre approval avoids any delays in settling your contract. All we need is the property valuation to complete the settlement.

To find out how you can obtain pre approval, complete the enquiry form and have one of our specialist consultants contact you today!