These are usually the lowest interest rate products around (no-frills loans).  The loan’s interest rate rises and falls in line with the prevailing market. They usually have very limited features (e.g. they usually have no access to offset facilities and are more expensive to redraw from). Most have terms of 25 or 30 years.

A very popular type of mortgage. It is more flexible than a basic variable mortgage. They usually allow you to make extra repayments without penalty as well as offering other features, such as offset an account. For this reason they are usually offered at a slightly higher interest rate then a basic variable loan. Most of them have terms of 25 or 30 years. The loan interest rate rises and falls in line with prevailing market interest rate.

The interest rate is fixed for a term of the loan. This type of loan can be useful if it would be better for you to have a known cost for a period of time.

By only paying the interest on the loan, naturally the repayment will be less expensive. This type of loan is typically used on investment loans when the purchaser would rather use their available cash to put towards a non-tax-deductible debt, like their home loan.

Lenders will usually offer a five-year interest only period, some go to 10 years, and then the loan reverts to principal and interest. Having said this, it is possible to renegotiate further interest-only periods with the lender.

Sometimes called a “honeymoon loan” because you benefit from a lower interest rate, usually for the first 6 to 12 months.

This is where an amount is added to the periodical repayment to repay the loan over time, as opposed to an interest only loan where the repayments never reduce the sum borrowed. Principal and interest repayments are usually calculated based on a 25 or 30 year term at the prevailing interest rate.

A flexible type of loan which enables you to use the equity you have in your property for worthwhile purposes. Ideal for disciplined investors.

This is a separate transaction account which is attached to your mortgage. The money in your offset account is deducted from the loan balance before the interest is calculated. This effectively means that your savings are earning interest at the same interest rate as the home loan.

The offset account is much like a normal savings account (i.e. usually offers ATM access, internet banking and a cheque-book). When used correctly, an offset account can be very effective in saving you vast amounts of interest over time.

Low-Doc loans are a flexible solution for self-employed people who have good assets in property and a good cash flow, but are unable to provide the required financial statements at the time of the application. Some lenders will lend up to a set percentage of the property’s value with minimal financial verification.

Range of loans offered by specialised lenders for borrowers who fall just outside the credit criteria of the major banks. The interest rates are usually higher but you can negotiate loans that become cheaper over time. This way you are not disadvantaged for too long while getting the start you need.

These type of loans allow you to divide your loan into different loan structures; for example half of your loan can be a fixed rate and the other half a standard variable rate.

A specific type of loan offered by some lenders to facilitate the building or renovating of a new home or an investment property. This includes progressive payments directly to your builder. As you are not drawing down on the full amount of the loan immediately, interest payments are minimised. Construction loans usually revert to standard variable loans once the construction has been completed.