Principal and Interest
Both the principal and the interest are paid during the term of the loan. These can be either variable or fixed rates. Part of the repayment is used to repay interest while the balance is used to repay the principal of the loan. Repayments are calculated based on repaying the loan within a set period, usually 25 or 30 years.

Interest Only
A loan in which only the interest each month is paid. The loan amount does not decrease as you are only paying the interest and nothing off the principle. Most lenders only offer interest only loans for investment loans however some lenders do offer this repayment method for owner occupied loans.

Offset Account
With a 100% savings offset account, the interest charged on the home loan is calculated on the difference between the home loan balance and the balance you have in your offset account, thereby reducing interest and the loan term!

Portability
A portable loan allows you to sell your house and move to a new one without having to refinance. This saves application and legal fees. Most lenders, however, insist that the loan amount is the same or less.

Redraw Facility
A redraw facility allows you to make additional repayments on your mortgage, and then have access to the additional repayments. Make sure you understand the conditions attached to the redraw facility as it can include a minimum amount and a fee every time you use it.

Additional Repayments
If you expect to have some extra money from time to time, making additional repayments over and above your regular loan repayments can significantly reduce your balance and the amount of interest you pay.

Weekly/Fortnightly/Monthly Repayments
By making repayments fortnightly or weekly, you effectively make an additional monthly payment per year. This can assist in reducing the term of your loan.

Split Loan
Some loans allow you to split your loan into a variable rate portion and a fixed rate portion.

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