Home loans for the first time buyer
What category of first home buyer are you?
Sorting through the range of first home buyer loan options can be daunting. To help you navigate the maze, we have created some scenarios which will illustrate the advantages and disadvantages of the different home loan types.
Want to keep it simple? Try a basic home loan
Donna and Ian are looking for a first home buyer loan to purchase a house in which to raise a family. Their first concern is stability and finding the lowest interest rate. In this case, the ideal solution is a basic home loan. Basic home loans typically offer fixed interest rates lower than the standard variable rate at the expense of reduced flexibility.
Worried about uncertain interest rates? Try a split rate loan
With the future of interest rates so uncertain, Ken is unsure whether to make the first home buyer loan a fixed or variable interest rate loan. The solution is a split rate home loan. This loan puts a proportion of the loan on a floating or variable interest rate and the other part on a fixed rate. These loans generally offer all the features of a normal loan, while providing a mixture of certainty (the fixed rate portion) and flexibility (the variable rate portion).
Just married? Try a Honeymoon home loan
Jo and Michael are recently married and are looking for a first home buyer loan. They are using the Federal Government’s First Home Owners scheme to help with their deposit. This will leave them with very little spare cash after moving in. For this couple, the solution is a honeymoon home loan. Honey moon home loans are similar to a standard home loan, except they offer a lower rate of interest for a fixed period at the start of the loan. This can be particularly beneficial for first home buyers as the lower repayments coincide with the costs of purchasing and setting up a new home.
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