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When you are in the market for a new home, one of the first decisions you will make is which home loan to choose. How do you know which one is right for you?
Here are some considerations when selecting a home loan provider plus some tips on how to choose the best loan for your needs.
Compare loans for your owner occupied house
Owner Occupied Home Loans
Fixed rate vs Variable rate home loans
A big decision – whether to get a variable or fixed rate home loan.
A variable rate home loan means your interest rate can go up or down, depending on the market conditions. A fixed rate home loan means your interest rate will stay the same for the duration of the fixed rate period.
With a variable rate home loan, your repayments may be lower if interest rates go down. Variable home loans normally have lower interest rates than fixed price loans, but the risk is, if rates rise, your repayments will also go up.
A fixed rate home loan gives you peace of mind because your repayments will stay the same for the duration of the fixed rate period, no matter what happens with interest rates. When the fixed price period ends, you will normally revert to a variable rate mortgage.
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Investment loans
Cash back home loans
Cash back home loans are a type of home loan where you receive a percentage of the loan amount back in cash.
This cash can be used for any purpose, such as home renovations, paying off other debts or simply putting it in your pocket.
On the plus side, you get cash upfront which can be helpful if you need money for home improvements, furniture or other expenses.
The downside is cash back home loans may have higher interest rates than other types of home loans.
Cash Back
Offset account
An offset account is a way of setting up your bank accounts to help save you money. Your day-to-day bank account (the “offset account”) is used to reduce the outstanding value of your loan so you repay less interest.
If the outstanding balance in your home loan account is $200,000, for example, and you have $50,000 in your day-to-day (offset) account, you will only be charged interest on $150,000.
Loan to value ratio (LVR)
When you’re looking for a home loan, one of the things you’ll want to consider is the loan-to-value ratio (LVR).
The LVR is the percentage of the home’s purchase price the lender will finance.
For example, if you have a home loan with an LVR of 80%, the lender will finance 80% of the home’s purchase price and you’ll need to come up with the remaining 20% as a deposit.
LVRs can affect your interest rate, loan type and the amount of money you’ll need for a deposit.
A high LVR (90%+) usually means you’ll pay a higher interest rate and a low LVR may mean you can borrow more.
Extra payments on a home loan
Making extra payments on your home loan can help you pay it off sooner and save money on interest. Check with your friendly Reduce Loans contact first to make sure there are no penalties for making early repayments.
Extra repayments can be made as often as you like, but there may be a maximum value you can repay each year.
Redraw facility
A redraw facility is a type of home loan account allowing you to withdraw any extra payments you’ve made.
This can be helpful if you need to access the money for unexpected expenses, such as home repairs or medical bills.
Redraw facilities are likely to restrict the maximum amount you can redraw each time.

Preapproval for your home loan
Critical if you are considering buying your home at an auction, getting preapproved for a home loan is a great way to know the value of the home you can afford and helps avoid being rejected when you find the home you want.
We are here to help!
At Reduce Loans, our aim is to help you select the best home loan for you and your situation. As you’ve seen there are many things to consider. Our team are ready to answer your questions.
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Cash Back is here!
Receive $2,000 up to $10,000 cash back on purchases and refinances with Reduce Home Loans!
Cash Back Hero is here for a limited time! Available for both Owner Occupiers and Investors. Minimum loan sizes apply
Find out moreRate Lovers Cash Back from
6.29%p.a.
Variable Rate
6.36%p.a.*
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loan features
- 100% offset available
- Full, free redraw facility
- No ongoing fees
- Loan splits available
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