When you begin your search for a home loan, there’s a lot to take into consideration.
It’s more than just finding the cheapest home loan rate, other features associated with your loan are also important. Often, the additional features are what make a home loan a perfect match for you.
1. Split Home Loan Facility
Allows you to get the best of both worlds by enabling you to fix a portion of your loan and keeping another part variable at the same time. This feature offers the dual benefit of protecting you against sudden rate hikes and also allowing you to take advantage of current low rates. A flexible lender will grant you the choice between what portion of your loan you’d like to fix and what portion you’d like on a variable interest rate.
In addition, you can divide your home loan into parts at any time during the application process or after funding.
2. Redraw Facility
This feature helps you establish better security by offering you a financial safety net. It allows you to access additional funds paid into your home loan up to the amount of the additional repayments. These accessible funds come in handy if you’re short of cash in case of emergency, but will put you behind in terms of interest savings.
3. Offset Account
This is a savings account link to your home loan account. Instead of paying interest to the offset account, the balance is deducted from your loan account before the interest on your home loan is calculated. Hence, less interest is charged to your loan.
Which means that you can make significant interest savings even if you have a smaller amount sitting in your offset. This feature not just helps you reduce the interest you pay but also shorten the term of your loan.
4. Additional Repayments
This feature allows you to make repayments on top of your home loan’s minimum repayments, which effectively reduce the interest charged and the length of the loan term. Some lenders may limit the total amount you can repay within a certain period of time, or may not allow extra repayments without incurring an additional cost with fixed rate home loans. So, make sure that you’re aware of any limits or restrictions.
5. Rate Lock
As interest rates change from the time you apply for a loan to when it’s funded, this feature guarantees your chosen fixed rate for an agreed time frame. This is a good option for buyers who haven’t yet found a property. Just make sure you get all the facts ironed out as there are fees associated with this additional feature.