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Mortgage types

What types of mortgage loans are out there?

Most mortgage lenders will offer you different types of mortgages.

Honeymoon rate mortgages

These offer a discount introductory mortgage rate for 6 to 12 months that then revert back to a variable rate mortgage. The key question you need to ask– what is the interest rate after the honeymoon period?

Low variable rate mortgage

These have a lower rate than the standard variable rate but some features are not available or you'll pay extra for them. For example, facilities such as redraw.

Standard variable rate mortgages

Usually carry a higher rate than the basic variable rate but gives you more features, and has either lower or no fees.

Fixed interest mortgages

These can give you certainty about what your repayments will be. They generally revert back to a standard variable mortgage at the end of the fixed period. Fixed rates are usually between 1 and 5 years.

Line of credit loan

You borrow a ceiling amount and can pay down and draw back up to that ceiling amount.

Offset

This is a transaction account you have in addition to your mortgage. You deposit your income into the transaction account and use it for your everyday expenses. Any money in this account is offset against the amount you owe on your mortgage, and since you only pay interest on the outstanding balance of your mortgage, it helps save you money on interest.

Check out ING DIRECT's Orange Advantage Offset Home Loan or Orange Everyday transaction account.

Compare ING DIRECT mortgages

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