There are many different types of home loans and some will be more suitable for you than others. Here are some of the most common options available.

This is the most common loan, where the interest rate can vary with official interest rates, but are ultimately determined by the lender. They typically have redraw facilities and offset accounts that give them flexibility. Many lenders will consider a discount or honeymoon rate based upon the size or initial nature of the borrowing.


They can be refinanced with another lender, some loans without exit costs. The interest rates do vary and, unlike a fixed interest loan, the borrower will also experience different repayment rates over the life of the loan.

This type of loan is similar to a standard variable but the borrower sacrifices flexibility for a lower interest rate. This means that offset accounts and redraw features are usually not available.
These are loans where an agreed interest rate is fixed for a specified period. It suits a borrower seeking a constant loan repayment who wants to avoid the ups and downs related to variable rate contracts. When interest rates are dropping you can be paying more interest than a variable rate borrower; however, it can also work in your favour when interest rates climb. Some fixed rate loans do not allow additional repayments.
You can have one portion of the loan at a variable rate and the other at a fixed rate. This is attractive to borrowers who want to limit their risk of increasing interest rates by fixing a portion at an acceptable rate.
When you have an interest only loan, the principal isn't reduced by the minimum required payment. The principal will remain unpaid for the interest-only period. After the interest-only period, the loan will convert to a principal and interest loan for the remainder of the term. 


You might elect to continue on an interest-only basis for another term and defer the conversion to principal and interest. However, at some point the lender may force the repayment of principal to reduce their risk. These loans are typically used by borrowers for investment purposes and by borrowers wanting a lower repayment amount than would otherwise apply under a principal and interest loan.

Where a borrower has established equity in their home, they may request a pre-approved credit limit that can be drawn upon at any time. They are often used by those who invest and move funds between investments, giving them the capability to invest borrowed funds with flexibility. 

The repayments are drawn against the line of credit and the borrowers are required to maintain the credit at an acceptable level