Loan Comparison

Below is an explanation of what type of loans are available in Perth's loan market.

Discounted or Fixed Introductory Interest Rate Loan

Under this type of loan, the interest rate is either discounted or fixed for an initial period, which is usually six or twelve months. During this period, the discounted interest rate rises or falls. An introductory fixed interest loan rate remains the same for the fixed period. These introductory loans are often reffered to as "Honeymoon" rate loans. These loans usually offer the lowest interest rate available and they can assist a new borrower to settle into making mortgage repayments. However, with this type of loan you need to be prepared for an increase in repayments once the fixed/discounted period expires.

Standard Variable Interest Rate Loan

This is the usual loan offered by home loan lenders and the most popular type of loan. In Australia this type of loan usually offers a honeymoon rate for an initial period. The Interest rate can fluctuate throughout the term of the loan, once the honeymoon period expires. Repayments, which can be weekly, fortnightly or monthly are based on the term of the loan and will be changed with the rise and fall of interest rates. Features such as flexible repayments redraw facility and mortgage-offset facilities are often included with this type of loan.

Fixed Interest Rate Loan

This type of loan offers an interest rate for a specific period eg. One year to five years. At the end of the fixed rate the loan is either renegotiated for a further fixed term or reverts to the current variable interest rate. This type of loan is usually restrictive in that extra repayments are generally not permitted without incurring a penalty. A penalty may apply if the borrower wishes to refinance (payout) the loan during the fixed rate interest period.

Basic Variable Rate Loan

This type of loan offers a lower interest rate and repayments than a standard variable interest rate loan but has fewer features than those types of loans. This type of loan was introduced by mortgage managers several years ago and has proven very popular with borrowers looking for a cheap "no frill" home loan. Most lending institutions now offer these types of loans as an alternative to standard interest rate loans.

Mortgage Comparison

Mortgage Magnet offers a free service comparing your current mortgage product to other products offered in the West Australian Market.

Identifying any products that may provide a material benefit (net of any refinancing costs) over and above your current loan product. A material benefit may be financial and/or non-financial.

Clients are sent the results of the Mortgage Comparison and if a superior product has been identified by Mortgage Magnet, the client is given the opportunity to discuss the findings.

The Mortgage Comparison offer provides you with the peace of mind that you will always have the best mortgage product while you are a client of Mortgage Magnet. This is a free service and clients are under no obligation to act on the findings