Standard variable loans are one of the more popular choices. Interest rates will increase and decrease over the course of the loan term, depending on the official rate set by the RBA (Reserve Bank of Australia) and funding costs. Mortgage payments pay off both the loan principal, as well as interest.

Advantages to variable interest rate loans mean that if interest rates fall, your minimum repayments also fall. Standard variable home loans enable additional payments to be made to cut the interest accrued on a loan, and basic variable loans don't come with a redraw facility, which removes the risk of spending money you paid off on your home loan. 

However, if interest rates rise, so do your repayments; consequentially increasing pressure on  your household budget. As well as this, customers with a variable home loan must be disciplined with a redraw facility, as using this too often means it takes you longer to pay off the loan. 

Fixed home loans will normally mean that your interest rates are locked for a certain period of time, such as five years. This means repayments remain the same whether interest rates from the RBA increase or not. At the end of this period customers have the option to fix the interest rate, or opt for a standard variable rate. 

Advantages to fixed home loans are repayments remain the same for a certain period, whether or not RBA rates change. If assists with managing budgets better as repayments do remain the same. 

Disadvantages also mean if interest rates decrease, you won't benefit from lower interest rates. You can end up paying more over the life of a loan with a fixed rate as well. 

Split Rate home loans mean that part of your loan has a variable rate, and another part is a fixed rate. As a buyer you have the option to decide how much of the loan is fixed rate, and how much is variable. 

Advantages to a fixed rate mean that regular repayments will fluctuate less when there are interest rate changes, meaning that repayments too will drop when RBA rates drop. You can also repay the variable loan amount faster. 

However, only limited additional repayments on the fixed rate portion are allowed, and you will likely be financially penalised if you exit the fixed rate portion early. 

Interest-only loans mean you only repay the interest of your home loan, usually for the first few years of the loan term, meaning your repayments are much lower. This is best suited for people who plan to sell a home for capital growth before principal has to be paid. 

Advantages to this loan is lower repayments during the interest-only period, also enabling you to pay off and redraw the principal at your own convenience (if variable). 

Disadvantages however is you will have the same level of debt when you started once the interst-only period has ended, and you can face a sudden increase in regular repayments at the end of the interest-only period. 

A Line Of Credit home loan enables buyers to pay into and withdraw from the loan every month as long as regular repayments are consistent. This is good for people wanting to maximise their income to pay off their mortgage quickly, and who want maximum flexibility with access to funds. 

This is beneficial as it enables customers to use their income to reduce interest charges, and pay off their mortgage quicker. If provides great flexibility with access to available funds, and enables consolidation of spending and debt management. 

Without proper financial discipline, principal would not be paid off and customers will continue to carry, or even increase, their level of debt. As well as this, line of credit loans also normally carry a higher interest rate. 

Mainly focused for first home buyers, these loans generally offer a discounted introductory rate for the first few months, before rates revert to a usual variable interest rate. 

This enables lower repayments for the first few months of paying off the loan, however loans normally have restrictions such as no redraw facilities, and you may be locked into a period of higher interest rates at the expiry of the honeymoon period. 

A great option for self-employed customers is low-doc loans, as these require less proof of income, however often carry higher interest rates due to increased lender risk. 

Advantages mean lower requirement for evidence of income, or nonexistent/poor credit ratings. 

It does however also mean as a buyer you will be paying a higher interest rate, require a higher deposit, or both.