There are many different types of home loans on the market, and it can be confusing working out which one is right for you.
It's a good idea to talk to a NAB home loan specialist, who can explain all the features available and recommend NAB products that are right for your situation.
Most popular with First Home Buyers
Start with the home loans that have proved popular with other first home buyers.
Fixed Rate Loans have a rate that will remain the same for the fixed rate period, eg 1, 3, or 5 years. At the end of that time you can choose to lock into another fixed rate, or change to a variable or split your loan.
It's easy to budget when you know what your repayments will be each month.
You can avoid rate rises, potentially saving you interest.
Less flexibility with extra repayments. With NAB fixed rate loans, you can pay up to $20,000 in additional payments without penalty during your fixed rate period.
If interest rates fall, you won't benefit from the lower rates, so you could miss out on some savings.
Split Loans
The best of both worlds, a split loan lets you divide your loan so some of it is at a variable rate and the rest is fixed. You decide the division, for example you could have 80% on variable rate and 20% on fixed or 50% each way.
If the market rate rises, you'll only pay more interest on the variable part of the loan, the fixed part stays constant. You can make extra repayments on your variable and fixed rate loans.
If rates lower, you'll only get the savings on the variable portion.
Introductory Rate Loans
Also known as "Honeymoon Rates", these loans offer you a special discounted loan for a specified period at the beginning of the loan. The NAB 3 Year Introductory Rate Home Loan offers you a discount on the standard variable rate, or a low fixed rate, for the first three years of your loan. Or, you can split the loan between the two. After that period, you are welcome to change your loan should you so desire.
No Deposit Loans
It is possible to borrow the entire 100% of the property value with a NAB Tailored Home Loan, so you don't need the minimum 5% deposit (you will still need to cover your stamp duty and other costs - see What other cost are there? for more information).
You can get into your first home sooner because you won't have to wait until you've saved a deposit for your loan.
You may have to pay Lender's Mortgage Insurance (but you could avoid it by using NAB Family Guarantee). The more you borrow now, the more you have to pay back later.
Interest-Only Loans
Normally when you repay a loan, your repayment goes to paying the interest accrued and some of the loan amount that you borrowed, called the principal. With an interest only loan, you only pay back the interest incurred for the set interest-only period.
Repayments are low for the interest-only period.
The principal remains the same for the interest-only period so you haven't paid any of it off. You have to make 'principal and interest repayments' at the end of the interest-only period.
The interest-only option is available on most NAB home loans, except for the NAB Introductory Rate Home Loan.
