Honeymoon rate loans can be good for those people in a situation who want as low a rate as possible in the early days of their loan – usually the first 12 months. After that these loans usually default to the standard variable rate. Whether it is better to go for the honeymoon rate loan or a discount variable rate loan from the out set is dependant on the client’s individual preference and situation however it is very simple to calculate exactly the interest payments for each option to determine which is best for you.

It depends on the actual loan. Most loans have a monthly service fee of around $8 to $10 however others have none. Usually the loans which have a monthly fee have a lower interest rate which can often make them worthwhile. There are also a number of premier package loans on offer by many of the main lenders which charge an ongoing yearly fee of between $295 and $350 and where the benefits are rate discounts and other advantages.

It depends on the actual loan. Most variable rate loans have this facility and the cost varies between $15 and $50 per redraw and the minimum amount is usually $2000. Some loans allow free redraw.

Mortgage insurance covers the bank in case you default on your loan repayments. It does not cover you - the borrower. As a general rule, the banks require you to pay for this if the loan amount you are requesting is greater than 80% of the purchase price. The only way to avoid it is to borrow less than 80% or provide additional real estate security to bring the loan to value ratio (LVR) to below 80%.

It depends on the actual loan. There is no set rule but most standard variable rate loans and honeymoon rate loans will allow them but most discount variable rate loans won't. They are useful to have because they save on interest and are convenient however there are other ways to set your loan up to do the exact same thing.

You can potentially save very large amounts in interest cost by paying the loan off more frequently and by paying off extra amounts. The software used by Home Loan Advice Centre can show you exactly how much you would save in any given scenario and suggest ways you can achieve the greatest savings. Setting your loan up with an offset account also can be a way to pay your loan off more quickly because any funds placed within this account is effectively equivalent to paying principle off your loan.

As long as it’s a variable rate loan, virtually all banks allow you to pay off as much as you like in extra repayments. With fixed rate loans the situation varies between banks. Most limit the extra amount you can pay off to $5000 per year but some allow up to $10,000 extra per year. Splitting your loan to half variable and half fixed overcomes the problem if you want pay extra and still have the security of a fixed rate loan.

It costs you nothing. Home Loan Advice Centre is a member of the Professional Lenders Association Network of Australia. As a group we refer large volumes of loans to each bank and commissions are paid back from these lenders based on this volume.The end result is that you end up with exactly the same loan as if you went to the bank directly but gain through getting our knowledge and advice on which banks it is worthwhile for you to approach and which banks are not. You also gain from our knowledge of loans and advice on the best way to structure your loan. The whole picture. The right loan.

It depends on your circumstances and your outlook. Fixed rates are usually a little higher than variable rates so you have to weigh up the alternatives ie comparative cost of each option, the requirement you have for certainty in your repayments, what you believe rates will do in the future, and the question of how long to fix for. Fixed rates have the benefit of giving you full knowledge of what you repayments will be over the term you fix however they also have a number of disadvantages.

See table 1 below for Lender interest rates. The table shows a brief summary of current interest rates of the banks on our lending panel. Please note - that many discount rates offered by each lender are not shown. Please contact your Home Loan Advice Centre loan consultant for more information on other discount rates that may be available to you.