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In Australia we have over 120 home loan lenders, thousands of products, with rates and policies changing daily. There’s never been more choice and confusion in the market. It’s no surprise that over 74.1% of borrowers now use a mortgage broker.

Mark NovoselFounder, Feather Loans
Loan Purpose

I want a loan to buy my first home start investing in property buy a family home get a better rate build our forever home knockdown and rebuild subdivide my land expand my investment portfolio renovate my home build a granny flat

A home loan is much like a mixed box of Lego. With the right combination of pieces (product features), assembled correctly (expertly structured), anything is possible. 

Explore home loans to suit your purpose, then discover the different types of home loans.

First Home Loans

All you need to know as a first home buyer, start here

Investment Loans

First, fifth or fifteenth property, discover more here

Upgrading Home Loans

Need more space? We break down the options

Refinancing Loans

Refi with Feather Loans it’s easier than you think

Construction Loans

Ready to build your dream home? See what’s involved

Home Loans for Doctors

You could borrow up to 95% without paying LMI

Self Employed Loans

We have lenders who help the self employed

Legal & Finance Professionals

You could borrow up to 90% without paying LMI

Defence Force Loans (DHOAS)

Review your loan options based on your subsidy level
Loan Types

There's a home loan to suit everyone, learn more

These loans are also known as basic or “no frills” loans, often having no ongoing fees. With very few extra features and mainly focus on providing a competitive interest rate. They may be suitable for smaller loan sizes, first home buyers and simple situations. 

Options like a redraw facility, splitting between fixed and variable, making extra repayments and portability should be considered. As interest rates fluctuate, your repayments will vary throughout the life of the loan. Variable rate loans are the most popular in Australia, often providing the best mix of value and flexibility.

These loans include extra features, such as one or more offset accounts, portability or the ability to split and top up your loan. Often attracting an ongoing fee or higher base rate in exchange for additional features, these loans may be better suited to larger loan sizes, investors and families. 

To sweeten the deal, lenders may provide these loans as part of packages with a discount off the base interest rate and additional benefits like credit cards with no annual fee and discounts off other products. Being variable, the interest rate and repayments are sucbject to change.

Features a set interest rate for a specified period of time (typically one to five years). This provides certainty that your loan repayments won’t increase during the fixed period. Conversely if interest rates drop, you won’t benefit from a lower rate.

Fixed loans can have significant break costs if you need to sell or want to refinance during the fixed term. You may also be limited from making additional repayments or having an offset account

After the fixed term ends, the rate automatically reverts to a variable rate. You may now lock in another fixed rate for a new term, remain variable or refinance your loan without penalties. Fixed loans are suitable when interest rates are low and expected to rise, or for people who  value certainty.

These loans are multiple separate loans, secured against the same security. This can provide the best of both worlds, allowing multiple fixed and variable components. Borrowers must be mindful of any conditions or limitations of each loan split. 

Split loans can be seen as hedging your bets when there’s uncertainty about which way rates will move. They can be beneficial for larger borrowing, allowing extra repayments into the variable component and locking in a fixed portion at a lower rate.

IO loans involve you only paying the interest on your loan for a specified period, and not the principal amount. This means your monthly payment might be lower, however your loan balance won’t decrease during the IO period. 

IO loans are mainly used by investors to improve cash flow, by lowering the out of pocket expense on negatively geared investments. This may free up funds for other investments, however IO loans often have higher interest rates, potentially reducing the benefits. 

These loans are also helpful for owner occupied loans if circumstances change and you need to lower your repayments for a period. Construction loans are also typically IO during the term of construction, before reverting to principal and interest (PI).

A bridging loan is used to fund the purchase of another property, before your current one is sold. They provide the convenience of giving you time to sell your property for the best price possible, rather than being rushed to accept any offer.

Bridging loans are interest only, as you’re essentially paying two loans until your current property is sold. Some lenders provide the convenience to capitalise interest on the bridging loan. This means you want to sell your property quickly, otherwise each month your interest charges will keep growing. 

The convenience does come at a price. Usually bridging loans are short term, for up to 12 months and more expensive than other types of loans. There’s also the risk of not being able to sell your existing property, or receiving offers significantly lower than expected.

When building a new home or planning major structural renovations, a construction loan is generally most appropriate. Construction loans are drawn down in stages and not paid as a lump sum. Often subject to satisfactory inspection of completed milestones, this provides added peace of mind that all work is completed to a set standard.

Construction loans are typically limited to two years and a fixed budget. During construction, payments are interest only, reverting to principal and interest once construction is complete, or two years have elapsed. Construction loan terms vary between lenders, so it’s important to get in touch early to discuss your project. This ensures you select the best lender for your project.

These loans work like a credit card, providing a revolving facility for larger expenses like home renovations, investments or personal purchases. Repayments are generally not set, so you can repay and draw down on your line of credit as needed. 

You must pay attention to the conditions of these loans as they can be more expensive than standard products. An alternative is an equity release, or “cash out” for those who are eligible. This involves establishing a new loan secured against an existing property with available equity

Depending on the lender, the equity release amount and purpose needs to meet their policy. So get in touch, we can help you select the most suitable lender for your needs.

Alternative documentation loans are typically used by small business owners, or those not in regular employment. This is a broad category and can include credit impaired borrowers, as well as expats and investors with foreign income. 

Lenders in this space are generally very open-minded with flexible policies to assist people across various circumstances. Feather Loans is accredited with multiple lenders who can usually assist where others have said no. Whilst these loans tend to come at a premium, they can often provide the lifeline needed at a critical time. 

Alt-doc loans can also be a valuable stepping stone towards a mainstream “prime” loan. Once borrowers can demonstrate two years of clear repayments, this opens the door to many more lenders. There’s no need to wait. 

We can help you buy the home you want now, then manage your loan ensuring you’re always getting the best rate. Reach out for a friendly chat today.

A reverse mortgage is a loan for people 60 years and over, typically used for lifestyle expenses or home improvements. The loan is secured against the equity or asset value of their home, holiday home or investment property

The equity can be taken out in a lump sum, through regular ongoing payments or a combination of both. Interest is added and no repayments are required until the borrowers either pass away or leave the home. 

Legal and accounting advice is recommended prior to considering this type of finance. It’s also a good idea to discuss this with your family and explore alternative options for finance.

Although not a loan, a deposit bond is a guarantee to the vendor that they’ll receive their 10% deposit. They are underwritten by an insurance company and incur a premium. Deposit bonds are useful when funds are tied up in a term deposit, or for investors wanting to maximise cash flow. Long term bonds are also a very popular funding source for off the plan purchases.

Ordinarily, settlement takes place and the initial 10% deposit is paid to the vendor. The deposit bond then simply lapses. If the purchaser defaults on the contract of sale, the insurance company will pay the 10% deposit. The purchaser must then pay these funds to the insurance company. 

Feather Loans is accredited with multiple deposit bond providers. Keeping your cash in an offset or high-interest savings account can earn more than the cost of the deposit bond. Reach out and we can compare the cost/benefit of using a deposit bond.

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