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How do I choose the repayment type for my home loan?

There are two main types of home loan repayments - principal and interest loans, where you pay off the loan amount plus interest (the most common type); and interest only loans, where you only pay the interest portion for a period of time, so the loan amount you owe doesn’t reduce during the interest only period (popular with investors).

Important things to consider when choosing a home loan:

Interest rate. The lower the interest rate, the lower the interest portion of your repayments will be. Try to find a loan with a competitive rate and the features that suit your needs - keep reading to find out more.
Loan term. This impacts the size of your repayments and the interest you’ll pay, so aim for the shortest term you can afford. Remember that shorter terms equate to higher repayments, but less interest over the term of the loan.
Fixed or variable interest rate. Repayments for a fixed rate loan remain the same for a set period of time (typically 1-5 years). Variable rate repayments can fluctuate.
Loan features. These include redraw or offset accounts so you can use extra money to reduce the interest you pay. These features often incur an additional cost, so choose a loan with features you’ll use.
Loan fees. These can include application/establishment fees, valuation fees and settlement fees, as well as ongoing fees.

Find out more information about the fees associated with a Qantas Money Home Loan here.

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How do I choose the repayment type for my home loan?

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