Worried about rising interest rates? A fixed-rate home loan will allow you to fix your interest rate for a specific period, usually from one to five years. It’s a sound option when interest rates are on the rise or in time of economic uncertainty. Should interest rates plummet, however, you’ll still have to pay off your mortgage at the fixed rate until the end of the agreed period.

Also, while you can break a fixed-rate loan – i.e. refinance a mortgage with another lender – it can come at a cost. Refer to your loan agreement or broker for advice.

Fixed rate mortgages provide certainty. You have a fixed repayment amount for a fixed term of between 1 and 5 years. Relative to floating you will pay more for a fixed rate when rates are expected to go up, and pay less when rates are expected to fall. If you repay a fixed rate early (i.e. sell the house) then you need to be aware of early repayment fees.

Floating rate home loans allow you to borrow money for a set period of time, during which you make regular repayments based on the current interest rate. The interest rate can vary depending on fluctuations in the official cash rate. Floating rate mortgages provide more flexibility. The rate can change at any time but is closely tied to the Official Cash Rate.

Want the best of both worlds? A combination home loan offers a mix of flexibility and security.

A good product for both first time and existing borrowers, combination loans allow you to customise your loan’s interest rate as you see fit: fixing the rate on a portion of your loan to give some certainty to part of your monthly repayments but also flexibility for the balance of your loan that is on a floating-rate.

If you’re a self-employed, contract or seasonal working and do not have regular income a low doc loan may be a solution.

While making homeownership a possibility for a cross section of New Zealand workings which previously found it difficult to secure a mainstream bank loan, most low doc home loans typically have a higher interest rate.

Your lending may also require you to take our lenders’ mortgage insurance in order to secure a loan.

This is like a large overdraft which operates as a current transactional everyday account where they are residentially secured and you get a low home rate on these borrowings.

Two main benefits:

Minimise your interest charges by depositing all of your income to the facility.

Access your funds up to your credit limit at any time.