Honeymoon Rates

Many lenders offer so-called honeymoon rates during the early months of your mortgage. The interest rates offered can be significantly lower than the prevailing variable interest rate, but will only apply for a limited time - usually between six and twelve months. After the introductory period, rates usually revert to the standard rate at the time.

Line of Credit

Lenders structure home equity loans differently, but basically, it gives you access to the equity that you have already paid off. In effect, any payment you make can be drawn back out as long as you are able to pay the interest charges. This type of loan may be useful for investors or businesses.

Transactional Account or All-In-One Loan

An all-in-one loan is normally set up as a complete transactional account with your mortgage, savings and cheque accounts combined. All your income and cash deposits are paid into this account, and this reduces your loan balance. A credit card is often linked to the account, and monthly payments are drawn from the transactional account, so you can use interest-free credit card periods to let your income reduce your interest costs.

Mortgage Offset Account

If you have a mortgage offset account, your loan account is linked to a regular savings account where your salary is deposited. While money sits in your savings account, it is offset against your loan and no interest is charged on that amount.

Bridging Finance

Bridging finance has long been seen as the expensive answer to the dilemma of having bought one home before you have sold your existing property. Most banks have some form of bridging finance to tide you over until your original home sells.

Deposit Guarantee Bond

Deposit bonds are commonly used to raise a deposit for a new property when all your capital is tied up in your current property or other assets. Similar to Bridging Finance, the terms are usually short - up to 48 months.

Low-Doc or No-Doc Loans

A low-doc or no-doc loan - meaning you need little or no documentation - is ideally suited for investors or self-employed borrowers who may not have, or want to share, income records. No tax returns or financial reports are generally required, but a higher interest rate and/or fees may be charged.