For most people, an attractive interest rate is one of the most important features. For others it is having the flexibility of a redraw facility or the ability to alter their repayments.
At Australian Finance Division we offer personalised one to one service in helping you find the right loan. We will explain in detail the different products and features on offer and help find the right loan for your needs.
Our range includes:
Australian Finance Division helps customers to find the best home loan for their circumstances. We recognise that our clients have different needs, so we tailor a loan package that will suit them. We offer a wide range of home loans, with over 40 lenders to choose from, including:
- standard variable rate loan
- basic variable rate loan
- Introductory (Honeymoon) / first home buyers
- fixed rate loan
- bridging loans / construction loans, including owner builder
- line of credit / equity release loans
- interest only home loans
- credit impaired / loans for borrowers with credit problems or bad credit history
- low doc loans
- no deposit home loans / 100% home loans
- reverse mortgages (for retirees)
- investment property finance
- debt consolidation
- family equity loans
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Australian Finance Division has a wide range of finance options to assist property investors and owner occupiers achieve the best pricing and structures through a varied panel of commercial lenders. We can offer:
- loans up to 70% of the property value, in some cases up to 80%
- finance for office, retail and industrial premises
- loan terms from 3 years to 25 years
- interest rates as low as residential rates
- mezzanine and second mortgage finance up to 90% of property value
- low doc commercial loans
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Australian Finance Division arranges construction finance for residential, commercial and industrial properties. From home renovations to property development, our panel of lenders have a loan to suit your circumstances. Owner builders are also catered for.
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Australian Finance Division offers Leasing, Commercial Hire Purchase, Chattel Mortgages and Novated Leases on a range of products including:
- motor vehicles
- fit outs for offices and factories
- plant and equipment
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A standard variable rate home loan is one of the most popular mortgages in Australia. For many borrowers, a standard home loan offers the right mix of features, flexibility, interest rate and fees.
This type of loan is particularly suitable if you want to make extra repayments without penalty, split your loan or access a line of credit. In return for these benefits, a standard variable rate mortgage will have a higher interest rate than a basic home loan.
- repayment flexibility
- ability to make additional repayments
- redraw facility
- split loan feature
- portability
- may offer direct deposit salary, rental or dividend income, credit/debit card and line of credit facility
- can be used for building purposes
- higher interest rates
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Basic variable rate loans are sometimes referred to as the 'no frills' alternative to the standard variable rate loans. The interest rate is lower then a standard variable loan, making them attractive to the budget conscious borrower wanting a lower variable rate but with fewer features. Popular with First Home Buyers.
- lower interest rates
- lower ongoing fees
- minimal features
- less flexibility
- no additional repayments
- or owner/occupiers only
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An Introductory variable rate loan generally offer's a guaranteed low rate for an initial period of time (usually 12 months) after which most interest rates will revert to the Standard Variable Rate. An Introductory Loan is attractive for the borrower wishing for to take advantage of the honeymoon period before taking up the features and advantages of a Standard Variable Rate Loan.
- redraw
- offset
- flexible repayments
- portability
- line of credit
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Fixed rate loans are funds lent over a set term at a set interest rate. This gives the borrower the certainty of knowing exactly what their monthly repayments will be should their circumstances change. Some lenders may impose early repayment penalties if you make a lump sum reduction to your loan or you pay the loan out in full. However a fixed rate loan is ideal in a rising interest rate market as this guarantees you of your interest rate and repayments for a set time.
- Stability – fixed repayments allow you to plan your finances and stick to your budget, even in times of economic uncertainty
- Cost – when interest rates rise, repayments won’t increase
- motor vehicles
- motor vehicles
- monthly repayments remain the same
- interest rate fixed
- some lenders charge hefty exit fees
- less flexible features
- limited repayment and redraw options
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A Bridging Loan is available to borrowers who wish to purchase a new home now and sell your current home later. These loans are especially helpful to 'bridge' the gap between the sale of one property and the purchase of another. The interest rate on a Bridging Home Loan is usually the same as a Standard Variable Rate Loan. A Bridging Loan ensures that the borrower will not miss out on a desired property because they haven't sold the current home.
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A Line of Credit provides a borrower with access to the equity in their home or investment properties whenever they wish for any worthwhile purpose. It is similar to an overdraft facility in that funds can be withdrawn up to the original loan approved amount at anytime. The interest rate on a Line of Credit facility is usually a variable rate that fluctuates with the market. A borrower can generally access their Line of Credit via a Cheque Book, Credit Card, ATM, Phone and Internet. A Line of Credit provides a borrower with easy access to funds ensuring peace of mind in times of need.
- easy access to funds, with most line of credit facilities offering cheque books, plastic cards, Internet and phone banking and a range of transactions
- withdraw up to your credit limit without having to gain pre-approval
- credit limit amounts are usually higher than credit cards
- interest rates are generally lower than credit cards
- interest on the credit facility can be minimised by directing all your income into your home loan account
- consolidate your debts by transferring other debts such as personal and car loans into your mortgage
While these loans give borrowers considerable freedom, they are not for everyone.
Like any credit card account, line of credit loans require financial discipline and good budgeting skills to stay within your financial limits.
However if you are careful with your money and want the flexibility a line of credit offers, this type of loan may suit you.
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If you’ve ever purchased an investment property, chances are you’re familiar with the concept of an interest only home loan. Offering lower repayments and many of the same features as traditional loans, interest only loans are particularly suitable for investors. However interest only loans are also suitable for general home buyers, refinancing an existing loan, as bridging finance or to pay for home renovations.
A principal and interest loan is still the most common type of home loan. Loan repayments include interest and principal, allowing home owners to repay the loan in full by the end of the loan term, assuming they make the minimum repayments.
With an interest only home loan, repayments only cover the interest component. The principal is repaid in full at the end of the loan term.
Because borrowers only repay the interest component, interest only loans have lower repayments than principal and interest loans.
- lower repayments
- loan terms typically between two and five years
- repay principal in full at the end of the loan term
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At some point in the past, a borrower may have experienced difficulty in meeting their monthly commitments due to lack of work, suffered unexpected business losses or had a difference of opinion with a former credit provider. Unfortunately, in these cases the former credit provider may have lodged a payment default (or black mark) on their credit report with a credit recording agency. When applying for finance, a default lodged on a credit report may cause some frustration as a lender may not take an understanding view of the borrowers explanation surrounding the default.
Credit-Impaired Loans are designed especially to assist a borrower in these circumstances. Usually these loans incur an extra interest rate margin and possibly extra fees and charges.
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A Low Documentation (or No documentation) loans are designed for the self-employed or small company borrower whose financial statements may not be available for many different reasons eg Accountant hasn't completed their bookwork. The borrower must have a sizeable deposit or equity in existing real estate property.
There is a growing range of lo-doc products on the market with many lenders offering standard and premium lo-doc loans with the choice of fixed or variable interest rates. Borrowers also get access to a range of loan features and options never previously available.
However, most lenders require lo-doc borrowers to take out lenders’ mortgage insurance when borrowing up to 80 per cent of the property value. Some lenders also charge a higher interest rate for these products. These rates may be reduced after a certain time period or when you are able to provide tax returns.
In general these loans are usually a variable rate and offer most of the features and benefits attached to the lender's standard variable rate loan product. A Low document loan can be just as competitive as mainstream lenders, however they provide less hassle as the borrower doesn't have to provide the usual lender income documentation.
- less paperwork - requires self-certification instead of traditional proof of income
- streamlined application process
- generally can only borrow up to 80 per cent of property value
- interest rate discounts may apply after specific time period
- may be eligible for lower interest rate if able to supply tax returns at a later date
- requires clean credit history
- lenders may not lend in high risk areas such as inner city high-rises or large rural allotments
- generally higher interest rates with less features than a traditional loan
- may require lender’s mortgage insurance, adding to cost of loan
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Many Australians dream of owning their own home but with property prices rising faster than incomes, first home buyers are finding increasingly difficult to raise the traditional 5 to 10 per cent deposit required for a standard home loan.
To help you get into your new home sooner, many lenders now approve loans of up to 100 per cent of the value of a property.
While this can be a good option for some buyers, remember that you still need to save for purchase costs such as stamp duty and conveyancing. And most lenders require you to show a savings history of at least six months.
When considering a no deposit home loan, check and compare interest rates as most attract higher interest rates and fees. Also check the borrowing requirements as many lenders impose stricter rules than if you were applying for a standard home loan.
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A reverse mortgage enables retired homeowners to access the equity in their homes, without having to sell their home. You don’t have to make a monthly repayment. The loan is simply repaid when you cease to occupy your home as a principal residence. This can be when you sell the home, or permanently move out, or the last surviving owner passes away. Instead of making regular repayments, the interest simply gets added on to the total loan amount each month.
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A Mortgage Offset Account gives you all the features of a normal transaction account, but instead of earning interest, you can use the account balance to offset the interest charged on a the home loan. Any money you put into the offset account is deducted from your home loan balance before the interest is charged. A great way for a borrower to use their savings to reduce the interest charged on their home loan.
When a borrower pays extra or additional repayment on their home loan they have the ability to redraw or withdraw the extra repayments that they are in advance. A Redraw Facility works similar to an, 'all-in-one' facility. The borrower deposits all of your income and savings into the loan and then they can withdraw the money from the home loan account for all your day-to-day expenses.
Another excellent way to save interest on your home loan is to make your day-to-day purchases on an Interest Free Credit card and 'redraw' the full balance of the card at the end of the interest free period to pay the card off in full.
A split loan is ideal for a borrower who wishes to have two loan products rather than one. An example is a borrower who wants to take advantage of a fixed rate loan products in combination with a variable rate loan product. The borrower can fix in portion of their loan to provide stability of interest rate and repayment but still allowing themselves the flexibility to make additional and lump sum repayments on the variable portion of the loan.
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