Guides & Tools

What Is a Home Loan?

A home loan (mortgage) is money borrowed from a lender to purchase property. The property acts as security for the loan.

You repay the loan over time, usually 25–30 years, including interest.

How Home Loans Work in Australia

When you take a home loan:

• The lender gives you money to buy property
• You repay in regular instalments
• Each repayment includes principal + interest

Over time:

• Interest reduces
• Equity increases

Main Types of Home Loans

1. Owner-Occupied Loans

For people living in the property.

2. Investment Loans

For rental properties, often with different tax benefits.

3. Fixed Rate Loans

Interest is locked for a set period.

4. Variable Rate Loans

Interest changes with market conditions.

Key Loan Features

Offset accounts

Redraw facilities

Extra repayments

Split loans

Home Loan Approval Process

Check borrowing capacity

Get pre-approval

Find property

Formal approval

Settlement

Why Home Loans Matter

Choosing the right home loan structure can save tens of thousands over the loan term.

Conclusion

Understanding home loans helps you make smarter financial decisions and choose the right lender structure.