Sign Up For Our Regular E-mail Bulletin
Stay in touch with current market trends and keep ahead of the game, with fortnightly insights from Moneybox CEO John Cameron
Sign Up
Buying property is one of life's big events. Moneybox can guide you through this process - just when you need it the most.
Loan Types and which option is best for you?
Loan Types and which option is best for you?
A home loan (also known as a mortgage) is essentially an obligation to repay the money that you borrow in order to purchase a property, with the propertTable Loans - Every payment is a combination of principal and interest. Initially your repayments are predominantly interest; however as you pay off more interest, they become mostly principal. Table loans can have both fixed or floating interest rates and are the most common type of loan.
"Ideal for people looking for certainty in their repayments, to help them budget"
Interest Only Loans - Your repayments are usually lower with an interest only loan, because you are just covering the interest. At the conclusion of the loan you still have the original amount of principal to repay.
"Suitable to those trying to keep their repayments to an absolute minimum"
Revolving Credit Loans - Operate like a large overdraft facility. The idea is to direct all your income and surplus funds into the account, and repay your bills only when they are due ensuring you leave as much money as possible in the account. This in turn will reduce your interest cost which is calculated daily.
"Ideal for people with irregular income, looking for flexibility"
Interest Options
When choosing the type of interest rate that's right for you, it's important to know what your options are - floating, fixed or a combination of both.
Floating Interest Rates rise and fall with the market. One key advantage of a floating rate is that you make lump sums or repay the loan in full without penalty.
Fixed Interest Rates remain the same for the period you have chosen. Fixed rate terms typically range between 6 Months to 5 years. The main advantage of fixed interest rates is that you have certainty around your repayments, which helps with budgeting/managing your finances.
Unsure which option is for you? Talk to your Moneybox advisor - we're here to help.
Note: Interest costs on your home loan are not usually tax deductible unless you are running a business from home, or the property is a rental property. When there are tax benefits available the structure of the loan is crucial to your eligibility to claim a tax deduction.
Commercial lending
Commercial lending is a niche and specialist part of the market where Moneybox has had significant mutual success with our clients. As with any finance package we pride ourselves in understanding our customers and their businesses to ensure they receive competitive and tailored solutions.
Having options in commercial space is equally, if not more important than it is in residential space. Our relationships and understanding of this environment ensure we can look at creative options without being disadvantaged by limited avenues. With commercial lending we often find that ‘innovation’ and ‘looking outside the square’ are critical aspects of making deals work, which again reiterates the importance of having an well versed advisor on board.