Term Loans
A term loan is the traditional mortgage that is designed to be repaid in full over an agreed term, usually 30 years. To achieve this principal and interest (P&I) repayments are made. Each P&I payment has an interest component, which is calculated on the daily outstanding loan balance, and a principal portion that is allocated to reducing the original borrowed amount, the principal. Many term loans may be structured with an initial interest only period, during which the repayments are a little lower as they are for the monthly accrued interest only. As there is no principal portion to the repayment the loan balance does not reduce.
Term loans typically offer some basic functionality such as redraw, telephone and internet access and additional repayments (may be limited during a fixed rate period). Should you be seeking additional functionality from your mortgage this may be available via Lines of Credit and Offset mortgage products.
Term loans are available as either variable or fixed rates. Whilst fixed rates can provide the security of knowing what your monthly repayment will be during the fixed rate period, a variable rate will move with the market, ie. May go up or down.
Iden Money Term Loan product spec available here.
Make an appointment to see an Iden Money Loan Consultant.
