Typical Cairns Loan Features

Cairns Loans – Common Benefits & Features

Let’s talk about common loan features and benefits. These are some of the features that may be available on some loans and terminology that you may encounter on your journey:

Interest Only Repayments

By only making repayments on the interest on the loan your minimum repayment amount is lower. These loans generally are interest only for up to the first five years of the life of the loan.
Once that period expires, you may find some lenders offer an additional period of interest only repayments. Investors use these loans often and then pay the principal off the loan when they sell the property for a higher value than when they purchased it.

Extra Repayments

By making extra repayments on your home loan can reduce the life span of the loan and save you thousands on interest. Even small extra repayments can make a noticeable difference.
These payments reduce the amount of principal owing and by doing so it reduces the amount of interest you will pay on the loan.

Weekly or Fornightly Repayments

By making more frequent repayments (weekly or fotnightly) it will mean you are making more repayments annually. This will reduce the life span of the loan and is great those people who are paid
on a weekly or fortnightly pay cycle.

Redraw facility

If you are making additional repayments on your loan and have a redraw facility you can access these repayments. Having that extra security knowing you have these funds can give you piece of mind. Make sure that you are familiar with any fees or restrictions that the lender may have on these features such as redraw fees or minimum redraw amounts.

Repayment holiday

If you have this feature on your loan then it means that you may be eligible to stop or reduce your repayments for a specified period of time. This feature could come in handy when you have holidays, unexpected illness, maternity leave or a change in employment.

Offset account

An offset account is essentially a savings account which reduces the amount of interest owed on your home loan. By putting your savings into an offset, the amount in the account is deducted from the home loan before the interest is calculated. The higher the amount in the offset account means the lower your repayments will be. You can still access the funds in the offset account like a regular account. Each lender has conditions such as different account fees or balance requirements.

Direct debit

Have your repayments taken out of your selected bank account automatically. By doing this you will avoid any arrears on your loan. All you need to do is set it and forget it (just make sure the funds are available for debiting on the due date).

All in one home loan

A flexible combination account with home loan, credit card and savings. By having your wages paid directly into this account and keeping as much in there as possible it will reduce your interest repayments. You may find that these types of loans generally have a higher interest rate.

Professional package

If your Cairns home loan is over a certain amount you may be offered a discounted rate as well as discounts on other services provided by that lender. Whilst these offers can be tempting if you don’t use or need the additional services then a basic variable loan may be a better option.

Portable loans

A portable loans gives you the flexibility to take your home loan with you should you sell your current home. This is beneficial as it can save you time and loan set up costs (but at the same time you may find that there are other charges involved).