Get exclusive money-saving offers and guides
Straight to your inbox
By signing up, you agree to the Finder Privacy & Cookies Policy and Terms of Use, Disclaimer & Privacy Policy.
Home Loan Types
Guides & Help
Home Loan Types
Read our guide to every mortgage type, from fixed and variable to less common products like SMSF loans and low doc loans.
We’re committed to our readers and editorial independence. We don’t compare all products in the market and may receive compensation when we refer you to our partners, but this does not influence our opinions or reviews. Learn more about Finder .
There are many home loan types in Australia, some of which will likely be familiar. Though there are also some highly specific home loan products you're likely to never have heard of if your situation has never called for them.
This page breaks down all of them for you. And if you're still confused which whether there is a home loan type to suit your requirements, you can also get guidance from an expert mortgage broker.
What's in this guide?
Loan purpose: investor or owner-occupier
One way to distinguish home loan types is by purpose. If you're buying a home to live in, you need an owner-occupier loan. If you're purchasing a property as an investment, then you need an investment loan.
Loans for investors and owner-occupiers often have all the same features and can be either fixed or variable, with interest-only or principal-and-interest repayments. The main difference is investor loans have higher interest rates.
Rate type: fixed and variable
Mortgages with variable interest rates are the most common type of mortgage in Australia, especially for owner-occupiers. They're flexible products but the rate can change at any time.
Unlike variable loans, loans with fixed interest rates won't change for a set period of time (the fixed period). This means your repayments stay the same. After this period, the loan reverts to a variable rate.
It's easier to exit a variable rate loan and refinance to a new mortgage. Exiting a fixed rate loan comes with breaking costs.
Learn more about fixed versus variable loans
Construction loans
When you're borrowing money to build a home, you'll need a construction loan. These loans require repayments at different stages as construction progresses.
Line of credit loans
If you already own a property and have paid off some or all of the mortgage, you have something called equity. You can use a line of credit loan to borrow against this equity.
This can be a good way to fund a purchase such as a renovation or a holiday.
Bad credit mortgages
It's hard to get an ordinary mortgage if you've had credit trouble in the past. Bad credit loans allow you to secure finance even if you have some negative marks on your credit history.
Lenders who deal in these loans typically take a more hands-on approach to assessing your credit file and take into account the circumstances that led to your poor credit history. However, be aware that these loans often carry higher interest rates.
Low doc
A home loan application requires evidence of your employment and regular income. This is easy if you're a full-time salaried employee (in other words, a PAYG borrower). It's harder if you're self-employed. Low-doc loans exist to help these borrowers.
You can apply for a low doc loan with a letter from your accountant, Business Activity Statements (BAS), income declaration forms or other types of documentation to show your earnings. Interest rates are often higher with these loans.
SMSF loans
Self-managed superannuation funds (SMSFs) allow investors to take control of their retirement savings and invest them in property.
Many lenders offer home loans for SMSF property investment. These loans are structured like normal home loans, though the structuring of the actual SMSF for property investment can be fairly complicated.
Reverse Mortgages
Older borrowers (60 and above) looking to fund retirement costs without selling their home can take out a reverse mortgage. You borrow against the value of your property and when you sell the property (or when your heirs sell after your death), the lender gets repaid.
Bridging loans
What do you do when you've bought a new house, but you haven't sold your old one yet? Or what if you've sold but the settlement dates don't line up, meaning you don't have money to cover the purchase?
A bridging loan will help you cover this shortfall. You pay interest with an interest-only rate and then pay the loan off when your sale is finalised.
More guides on Finder
-
With interest rates so low, are savings accounts still worth it?
Interest rates on Australian savings accounts are at record lows, but there are a few key benefits to keeping cash in a savings account.Â
-
How to start a small business from home
6 tips to start a successful home based business.
-
Brighte Personal Loan
Looking to renovate your home? Find out more about Brighte's personal loan for home improvements and ways in which it may be able to benefit you.
-
Endeavour Mutual Bank Special Fixed Home Loan
The Special Fixed Home Loan from Endeavour Mutual Bank is a fixed rate mortgage for owner-occupiers and investors.
-
Planning your retirement? Here are 4 things you need to know about reverse mortgages
SPONSORED: A reverse mortgage could let you use some of your home equity to fund your retirement costs. Here's what you need to know.
-
Sydney Mutual Bank Special Fixed Home Loan
The Special Fixed Home Loan from Sydney Mutual Bank is a fixed rate mortgage for owner-occupiers and investors. Available with a 5% deposit.
-
Defence Bank Foundation Credit Card
This card gives you a way to support a program that matches rescue dogs with veterans in need and enjoy a low interest rate on all your spending.
-
How Budget 2020 will affect you
The complete guide to how tax changes and new regulations will hit your wallet.
-
Finder Cash Rate Survey: RBA holds rate at 0.25%, November cut expected
Despite mounting speculation about the possibility of another cut, the Reserve Bank of Australia (RBA) has today announced that it will hold the cash rate at 0.25% in October. See what the experts had to say as part of the Finder RBA Cash Rate Survey.
-
Australian Property Half Time Report
Various data sources reveal just how resilient the Australian property market is.
Home Loan Offers
Important Information*
Ask an Expert