Every loan type, explained.

A variable rate moves with the market. When rates fall your repayment falls, and you typically get full flexibility: unlimited extra repayments, a proper offset account, and the freedom to refinance without a break cost.

A fixed rate locks your repayment for a term, usually one to five years. You get certainty — valuable if your budget is tight or you simply sleep better knowing the number. The trade-off is restriction: capped extra repayments, often no offset against the fixed portion, and break costs if you exit early.

A split loan divides the balance — say 60% variable and 40% fixed. You get partial certainty, keep an offset working against the variable portion, and you're not fully exposed either way. For a lot of borrowers this is the sensible middle, and it's under-used because nobody explains it.

Principal and interest is the default: every repayment chips away at the balance as well as covering interest. It costs more per month and far less over the life of the loan. For an owner-occupied home it's almost always the right answer.

Interest-only means you pay only the interest for a set period — commonly one to five years — and the balance doesn't move. Repayments are meaningfully lower, which frees up cash flow. When the interest-only period ends the loan reverts to P&I over a shorter remaining term, so repayments jump.

Used deliberately on investment debt — where the interest is generally deductible and the goal is holding the asset — interest-only is a legitimate strategy. Used to afford a home you otherwise couldn't, it's a problem you've scheduled for later.

Investment loans generally carry a slightly higher rate than owner-occupied lending and lenders assess them differently: they'll shade your rental income (often only counting 70–80% of it) and apply a buffer well above the actual rate when testing whether you can afford it.

Structure matters more than rate here. Keeping each property on standalone security rather than cross-collateralising means you can sell or refinance one without unpicking the whole portfolio. Spreading across lenders preserves your capacity, because every lender assesses your existing debt by its own rules — and some are far harsher than others.

More on building a portfolio here.

A construction loan releases funds in progress payments that track your builder's stages — slab, frame, lock-up, fit-out, completion. You pay interest only on the amount actually drawn, so your repayments start small and rise as the build advances.

The lender values the property “on completion” using your plans and fixed-price building contract. Once the final inspection passes, the loan converts to a standard principal and interest home loan.

Construction is also where the First Home Owner Grant usually applies in Queensland, since it's targeted at new builds.

Bridging finance covers the gap when your purchase settles before your sale does. The lender calculates your peak debt — both properties plus costs — and typically charges interest-only, often capitalised, for a bridging period of six to twelve months.

When the old property sells, the proceeds clear the bridging portion and you're left with the end debt on the new home as a normal loan.

It removes the worst dynamic in moving house: being forced to accept a low offer because you've already committed to a purchase.

Low-doc loans let self-employed borrowers verify income with BAS statements, an accountant's declaration or business bank statements instead of two years of full financials. Rates sit slightly above standard lending, reflecting the reduced verification.

Specialist or non-conforming lenders cover situations the majors decline outright: a recent credit default, a short time in business, an ATO payment plan, or income that is genuinely sound but unusual in shape.

These are usually a bridge, not a destination. The plan is normally two to three years of clean conduct, then a refinance back to a mainstream lender at a mainstream rate. More for self-employed borrowers here.

A self-managed super fund can borrow to buy investment property using a limited recourse borrowing arrangement. The property is held in a separate bare trust, and if the loan defaults the lender's recourse is limited to that property — the fund's other assets are protected.

Deposits are larger (commonly 20–30%), fewer lenders participate, and the compliance requirements are strict. You'll need your accountant and financial adviser involved alongside us, because the lending is only one part of the decision.

If your property has risen in value or you've paid the loan down, that gap is usable equity — generally up to 80% of the current value, less what you owe. A top-up increases your existing loan and gives you the funds as cash.

A line of credit works more like a large approved limit you draw on as needed, paying interest only on what you use. It's a common way to hold a deposit ready for the next investment purchase without paying interest while you wait.

Lenders still want to know the purpose. “Future investment deposit” and “renovation” are straightforward; vaguer answers get more questions.