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HOME LOAN RATES As at 22 Feb 2008 Loans for Investment |
Interest Rate* |
Comparison Rate* |
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Fixed Rates |
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1 Year |
8.39% |
8.85% |
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2 Years |
8.39% |
8.68% |
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3 Years |
8.39% |
8.63% |
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4 Years |
8.29% |
8.48% |
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5 Years |
8.29% |
8.48% |
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Introductory |
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1 Year Fixed* |
7.89% |
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1 Year Variable |
7.79% |
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Variable Rates |
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Discount Variable |
8.22% |
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Line of Credit |
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Line of Credit Rate |
8.22% |
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*Fees and conditions may apply Visit our calculators page to find out your likely repayments and borrowing limits. The following material is provided to help you understand some of the commonly used terms and product types. To find the best loan product(s) for you, please contact Interbank to discuss your unique circumstances with one of our qualified lending experts. Standard Variable Standard variable loans are the default loan package offered by the banks. These loans usually come with all of the extra features (internet access, offset accounts, etc) but the interest rates are not very competitive. It is rare that a standard variable loan is the best option for a customer but unfortunately this is the product that the banks have pushed onto most of their customers to maximize their own profits. If you currently have one of the following standard variable loan products you are paying too much interest and should call us immediately:-
“Honeymoon” or “Introductory” Rates Most lenders now offer special deals for new customers. These specials usually give a significantly discounted rate for the first 6 or 12 months of the loan term. This is called the “honeymoon” or “introductory” period. Most lenders are currently offering introductory rates that are set around 1.32% below their standard variable rates for 12 months. At the conclusion of the honeymoon period the rates usually revert to the standard variable rate of the particular lender. Note: When we refinance your loan with a different lender you will be eligible for a honeymoon deal with the new lender. You do not need to be a first home buyer, nor do you need to be purchasing a new home. Is there a catch? Most (but not all) lenders impose additional fees if you pay your loan out during an introductory period or within 3 or 4 years of commencing the loan. However, you will still save thousands of dollars despite these extra fees. To get onto a Honeymoon rate of 7.95% for the next 12 months, give us a call now. Basic Variable Basic variable loans are “no-frills” loans that offer low rates. Most banks set their basic rates at 0.6% below their standard variable rates. The “frills” that you may miss out on include offset facilities, Internet and ATM access and transaction account and credit card packages. Basic variable loans are suited to
Split Loans Split loans involve breaking your loan into 2 or more separate smaller loans (splits). This can be useful for keeping your personal and investment interest cost separate for taxation purposes. Some banks allow each split to be a different product type. For example you may have an offset split for your own home, a basic variable split for your investment property and a line of credit split for your business. Split loans are suited to those customers that are borrowing for multiple purposes or for those people that are prepared to endure a little more complexity to save a little extra money. Introductory Split Loans Some banks offer large honeymoon discounts (as much as 1.73%) on a variable split as long as at least half of the total loan amount is on a 3,4,or 5 year fixed rate split. These loans are suited to those people that want to take advantage of the savings offered by a honeymoon rate but also want the security offered by a long term fixed rate. Line of Credit or Equity Loans A line of credit is like an overdraft that is secured against your property. Lines of credit give you great flexibility and freedom in how you use your equity. They allow you to pay off as much (or as little) as you like each month, as long as you keep your loan balance below your approved limit. You can access unused equity by writing cheques or withdrawing from ATMs, just like a savings account. You only pay interest on your outstanding balance. The interest rate on Line of Credit products is usually higher than other product options that are available to you. Warnings:
Lines of Credit are suited to business use, share investment and where the balance of the account will fluctuate significantly. However, a Line of Credit is usually best used as part of a multiple product package where most of your debt is on a lower interest rate. Professional Packages Most banks have offered professional packages to members of certain professions, high income earners, and large borrows for many years. These packages vary from bank to bank but they commonly include such features as discounted interest rates and application fees, and credit card and insurance discounts. Most banks offer their regular range of loan products but with discounts on rates and fees, while some lenders have specific “professional” products. Due to the increased competition between the banks caused by the growth in the loan broking industry the banks have made these packages increasingly available to the broader market. You can now qualify for a professional package with some banks simply by having a loan greater than $100,000. You don't need to be a doctor or an accountant. Low-Doc and No-Doc Loans Low-Doc lending is a relatively new area of the lending industry. Low-Doc loans are primarily aimed at self-employed people that do not have documents (pay slips, tax returns, etc) to prove their income to the banks. This suits customers that do have not yet had their annual tax returns prepared or customers that earn a lot of cash income that is not declared on their tax returns. Most banks will want to see proof that you have been operating your business for more than 2 years. Some banks offer their normal product range and interest rates to low-doc borrowers but they will only lend 60% or 70% of the value of the property instead of the normal 80%-95%. Other banks will lend more money but they will compensate for thier increased risk by charging a higher interest rate (1%-3% extra). Credit Impaired Credit Impaired lending is another growing sector of the lending industry. Customers that have a poor credit history find it impossible to get loans from the major banks but there are now several lenders that will lend to these people. Even discharged bankrupts can get loans from a growing choice of lenders. To compensate for the additional risk of lending to credit impaired customers, the banks will set the interest rates 1%-4% higher depending on the magnitude of the customer’s past problems. Non-Conforming Non-conforming customers are those that do not fit into the ideal mould demanded by the premium lenders. In addition to Low-doc and credit impaired customers, non-conforming also includes:
Non-conforming loans will attract interest rates that are 1%-5% higher than standard variable rates. If you can afford a loan , Interbank can find you a lender. Call us now to let us determine the best loan type for you.
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