Today, there are close to 10.3 million residential properties in Australia, with over 6 million having a home loan / mortgage against them.

Currently, home loan interest rates are at historical all time lows.

This means getting a home loan that matches your personal and individual circumstances is now more achievable than ever before.

As a result, there is now a vast range of home loan lenders and products available throughout Australia.

However, finding the right type of home loan for your needs and wants depends on many factors, including your personal circumstances.

So that is why here at DFS, we take the time to understand your individual requirements before helping you get a suitable loan with the best possible terms and conditions.

Our expert team knows the ropes, and so not only will we save you money, but we will also save you time and the headache involved with the paperwork and application process.

Read our guide: 8 Simple Steps – The Mortgage Home Loan Process

Why should you apply for a home loan with DFS?

As one of Australia’s leading lending specialist, more and more people are turning to us here at DFS when they are looking for personalised home loan solutions.

We have helped many clients all over Australia find the perfect home loan, so we are confident that we can find the ideal financial product from our trusted lenders to meet your individual needs.

The DFS team understand that finding the right lender for your needs can be time-consuming and working with banks can be very frustrating.

We understand that you want to find the best deal now, that is where we come in.

Our expert team can source the lowest mortgage rates possible, saving you significant money right off the bat.

We supply our services with no out-of-pocket fees to you.


What kind of home loans can I get at DFS?

At DFS, we offer you a whole range of home loans to choose from. Each of our loans differs based on its rates, terms and conditions.

Hundreds of Australians choose DFS every year. With mortgages backed by market-leading lenders, you can be sure that your home loan is safe and secure.

Check out the different types of home loans we offer here at DFS.


Principal and Interest

In a principal and interest home loan, borrowers need to pay off both the amount they have borrowed, (which is the principal amount) and the interest, calculated based on the interest rate.

This means that when you take out a mortgage, you will be borrowing a specific amount of money called the principal. The amount you will then repay each month is made up of your principal and interest.

In this type of home loan, you need to make regular payments (usually monthly) over the length of the mortgage to pay off the entire amount you borrowed.


Interest Only

Interest-only home loans allow you to repay only your loan’s interest payments during the interest only term. At the end of the interest-only period, you will typically go back to paying off both the principal and interest.

This means that with an interest-only home loan, you only repay the interest on your home loan until the end of term, which is usually up to 5 years. Your principal or borrowing amount remains the same at the end of the interest-only term and simply rolls into a new principal and interest home loan.

Interest-only home loans have been growing in popularity over recent years. This could be possible because it allows you to defer repayment of the principal until a later date. And thus, making it a more affordable and faster way to own your dream home.


Fixed Rate Home Loans

Fixed-rate home loans offer a consistent and fixed repayment scheme for nearly one to 5 years. Your interest rate and monthly repayment stay the same for a fixed term.

If variable rates move upwards, you don’t move with them, and your repayments become cheaper. This gives you peace of mind knowing that your rate won’t change for the length of the term and instead gets you charged a lower interest rate than if you were on a variable rate.

Because fixed-rate home loans are based on the current interest rate, your repayments will remain the same over time, regardless of interest rate movements in the economy. This type of home loan offers certainty, consistency, and stability.


Split Rate

A split rate home loan features two different interest rates. One portion of the loan has a fixed interest rate, and the other has a variable interest rate.

This means that the fixed-rate portion will not be influenced by market movements and will be more affordable, while the other portion’s interest rates will always vary. A split rate mortgage offers a lower rate upfront and protects your loan from future market fluctuations.

If you’re looking to fix your home loan rate and protect it against future movements, a split-rate mortgage could be the answer. It is ideal if you would like to reduce the risk of variable interest rates and protect yourself against interest rate movements.


Low Deposit

A low deposit home loan is a type of loan that that allows you to get a home loan at low deposit amounts. However, this kind of loan comes with two conditions.

The first condition is that the borrower needs to pay a Lenders Mortgage Insurance (LMI) because these lows have high risks for the lenders. By paying LMI, you may be able to afford a home loan with a smaller deposit.Since this is a high-risk home loan, often the interest rates on these loans are also high. These interest rates are charged based on various factors.

DFS lending specialists can help you get a home loan even if you want to deposit 5% or less. Based on your budget and requirements, we can even help you find the best lender charging the ideal interest rates that matches what you can afford.


Low Doc

A low documentation home loan is a type of home loan that may require little to no supporting documents for your application. In this type of home loan, a lender allows a borrower to purchase with less documentation in their application.

However, this type of home loan has high-interest rates charged on the principal because of the lender’s increased risk. Although the rate becomes higher to compensate for the higher risk, it can help those buyers who have difficulty meeting the standard home loan criteria.

The loan is also easy to get but comes at a higher price than usual.

However, this can be a good short-term option. A typical scenario where this may be a good option is if the borrower does not have 2 years financials up-to-date (tax returns etc.).

Once the clients tax returns are finalised, it’s possible to refinance them out of a low doc loan and into a cheaper full doc alternative.


Guarantor

A guarantor loan is a type of home loan in which a lender requires a third party to become legally liable for your debt if you fail to make your repayments. This means that someone has agreed to be legally responsible for your payments if you cannot keep up with your repayments.

The person legally responsible for your debt is called the guarantor and can be one or both your parents, for instance. It is an option if you are having trouble getting finance for a home loan.

A guarantor co-signs the loan with you and becomes legally liable for your debt, so they will have to pay it off if you cannot. If you plan to get a guarantor home loan, it is important to ensure that your guarantor can afford the responsibility.


Line of credit

A line of credit home loan is also considered to be a “home equity conversion mortgage.” This type of home loan allows you to withdraw your home’s equity to a pre-set limit.

This pre-set limit is the maximum loan amount that you can borrow. It reflects the total amount of your equity. Keeping that as collateral, we can help you find lenders to borrow the maximum amount of your equity.

These lenders lend this maximum amount over an agreed term. If you take a line of credit loan, then your home’s equity is the collateral for this loan.


Home loan features

Many lenders offer a range of optional features with their products. Two of the most popular are offset accounts and redraw facilities.

An offset account can allow you to pay less interest. The amount you have deposited in your offset account is subtracted from the amount you owe on your home loan for interest calculation purposes.

A redraw facility allows you to withdraw repayments you make up to a pre-set limit if you need extra funds.

It’s important to understand that most lenders charge additional fees for optional home loan features. For the feature to be worthwhile, the benefits it provides needs to outweigh the costs. Different features will provide different benefits depending on your individual financial circumstances.


Comparison rate

You should always look at the comparison interest rate on a lender’s product to work out the total cost of all fees and charges. Lenders usually advertise two rates on their products. The lower nominal rate is just the interest charge. The higher comparison rate includes both the interest rate and any additional fees and charges. It therefore reflects the true cost of a loan.

Lenders in Australia are legally required to provide you with the comparison rate on their products BEFORE you take out any loan.

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