Types of home loans & features

For Tic:Toc home loans, we offer two simple loan types:

Fixed rate – interest rate is locked in for a set period

OR

Variable rate – interest rate fluctuates with the market

With two simple loan uses:

Live-in – first home buyers or those buying their next home

OR

Investment – those looking to build a property investment portfolio

Two different repayment types:

Principal and interest – pay off the loan amount plus interest

OR

Interest only – pay the interest only (popular with investors)

And two different deposit requirements:

From 20% deposit – allows you to borrow up to 80% of a property’s value

OR

From 10% deposit – loans guaranteed by Lenders Mortgage Insurance (LMI).

We also offer offset accounts for both fixed and variable home loans. Yep, even fixed rate loans!

And our fees? Well, we don’t have any of those … no application fees, monthly fees, annual fees, redraw fees, valuation fees or settlement fees!

And because our application process is online, we’re able to offer some of the best interest rates you’ll find anywhere!

If Tic:Toc doesn’t meet your requirements, don’t worry! We’ll let you know along the way if we think we can find you a better home loan solution through our in-house broker offering, Tic:Toc + Choice.

It doesn’t get any simpler than that, so click here to find the right Tic:Toc home loan for you!

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At Tic:Toc, it’s not essential. We have a series of questions we ask you during the application process that will not only tell us whether you’re a good fit for one of our loans, but also help to narrow down the kind of loan that’s best for you.

During the application process we’ll ask you what the loan is for and what your goals and objectives are from acquiring the loan.

We’ll also help you narrow down things that are important to you like;

If you want to pay the loan down quickly
If you prefer knowing how much your repayments will be so you can maintain a budget (i.e. fixed rate) or if you prefer loan flexibility (variable rate)
How often you’d prefer to make repayments
Whether you want features with your loan such as an offset account and redraw facility.
Based on your answers, we’ll then recommend some loan options and once you decide which is best for you, we’ll go ahead and do your financials and crunch the numbers for you.

If you don’t qualify for a loan, we’ll let you know upfront so we don’t waste your time and if you’re approved, you’ll have your answer in a matter of minutes.

That’s the beauty of our real-time online application process and it’s what’s made us a standout provider in the home loan sector.
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Home loans can be boiled down to two main types - principal and interest loans, where you pay off the loan amount plus interest (most common type) and interest only loans, where you only pay the interest (popular with investors).

To help you along the way here are some basic considerations;

Interest rate - try and get the lowest rate you can, as even a small difference can add up to thousands of dollars over the life of the loan.
Loan term – this impacts the size of your repayments and the interest you’ll pay, so aim for the shortest term you can afford (i.e. shorter term = higher repayments but less interest).
Fixed or variable interest rate – a fixed rate helps you budget because your repayments remain the same, but you won't benefit if interest rates fall. A variable rate usually offers more loan features, but your repayments will go up if interest rates rise.
Loan features – these include redraw or line of credit facilities and an offset account so you can put extra money into your loan to reduce the interest you pay. Most cost extra though, so choose a loan with features you will use.
Loan fees - these can include application fees (up to $850), valuation fees (up to $800), annual fees (up to $500) and settlement fees (up to $200). The exception is a Tic:Toc home loan, where all of these fees are $0.
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If you’re buying your first home, you’ve probably been saving for a while to get your deposit together.

Depending on how successful you’ve been, you’ll have saved either 20% or at the very least 10%, which will determine the type of home loan you’ll be able to get.

If you’ve only managed to save 10% of the property’s value, you’ll be required to take out Lenders Mortgage Insurance (LMI). This can be quite expensive, so it’s best to try and save a 20% deposit if you can.

The type of loan you then opt for will depend on your circumstances, but most first home buyers go for a principal and interest loan, where you pay off the loan amount with interest.

Many also choose a variable interest rate loan, as this usually comes with features that can help you to pay the loan off quicker.

Some people do opt for a fixed rate loan and the advantage of this is you always know how much your repayments will be, allowing you to stay on top of your budget, particularly if it is tight.

Whichever type of loan you opt for as a first home buyer, consider having the lowest interest rate you can get, the shortest loan term you can afford, minimum fees and only those features you’re likely to use such as a redraw facility and offset account. You should also get professional financial advice to better understand your options.
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An offset account is like a savings account that’s linked to your home loan which offsets the balance of your home loan, so you only pay interest on the home loan balance minus the amount in your offset account. If you have a decent balance in your offset account, you could save thousands of dollars in interest over the life of your loan.

At Tic:Toc, we offer 100% offset accounts with all of our home loans, including our fixed rate loans. You can find more information on our offset account here.

Can you withdraw money from an offset account?

An offset account has most of the features of a normal transactional savings account. You can deposit money into it and withdraw from it any time to pay bills or for day-to-day expenses.

The thing to remember is that the more you have in your offset account, the less interest you are paying on your home loan, so the more you can keep in there without withdrawing, the better off you will be.

Your money is protected

Your offset account is maintained by our funder, Bendigo and Adelaide Bank, who are an Authorised Deposit-Taking Institution (ADI). This means your offset account is guaranteed under the Australian Government's Financial Claims Scheme (FCS) for up to $250,000.

Tic:Toc offset accounts

Unlike some other lenders, at Tic:Toc we don't build the cost of the offset account into our interest rate. You simply pay $10 per month for the feature instead. Our offset accounts include;

A Tic:Toc Visa Debit card which you can use like any other Visa Debit or EFTPOS card, including at any Suncorp or Bendigo ATM free of charge.
A BPAY facility to make bill payments and a swipe option to make transactions at retail stores.
Deposit and debit features just like a normal bank account.

Adding or removing offset account

If you decide after you get your home loan that you'd like an offset account, you can add one to your existing home loan for a fee of $150. If you are on a fixed rate an additional break cost will also apply. Removing an offset account from your existing home loan will incur the same fees.

To add or remove an offset account, give us a call on 08 7109 9010 or email myloan@tictochomeloans.com and we’ll help.

Click here to learn more about offset accounts, and how they differ from redraw facilities.
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It’s the cost of borrowing money. There's a lot of information out there on interest rates, but it can be hard to understand. This article will help you get the low down on the types of interest rates and how they are calculated.

Wondering about comparison rates? They exist as a way to more easily compare home loan products between lenders. Comparison rates consider the extra fees associated with the home loan over its lifetime and factor those costs into your interest rate.
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Principal and interest is the most common type of home loan. This involves making repayments which pay down some of the principal balance plus the interest accrued.

However, some people opt for an interest only loan period. This involves making repayments for a set time (usually 1-10 years) which are lower than principal and interest repayments. as they only cover the interest being accrued and none of the principal.

You might choose an interest only loan period if you know your budget is going to be tight for a few years, or in the case of property investors, for taxation or equity building purposes.

If you go down this road though, you’ll need to make sure you budget for the end of the interest only period, as your loan will then switch back to the higher principal and interest repayments.
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A variable rate home loan is one where the interest rate goes up and down with market fluctuations, which are influenced in part by the official cash rate set by the Reserve Bank of Australia (RBA).

The two main types of variable rate home loans are:

Standard variable rate home loans – these often include features such as redraw facilities, a line of credit and an offset account, where you can use your savings to pay less interest on your loan.
Basic variable rate home loans – these offer lower interest rates, but fewer if any of the features of a standard variable rate home loan.
Variable rate home loans are the most popular type of home loan, as they provide more features and flexibility than fixed rate home loans and usually give you the option to pay your loan off earlier.
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A fixed rate home loan is one where the interest rate is locked in for a certain period (usually 1-5 years). At the end of this period you can either commit to another fixed rate or revert to a variable interest rate.

A fixed rate loan is useful for budgeting because your repayments are the same every time, but it also means you’ll have to pay the same interest rate, even if market rates drop.

Fixed rate home loans also usually come with less features than variable rate loans and you may not be able to pay your loan off early.

The exception to this is a Tic:Toc fixed rate home loan. Unlike most lenders, our fixed rate loans come with an offset account as standard. This lets you use your savings to lower the amount of interest you pay and reduce the overall cost of the loan.
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The answer to this question will depend on your personal situation and preferences.

If your budget’s tight and you’d prefer the security of knowing exactly how much your repayments will be every month, then a fixed rate home loan locked in for a set period may be better for you.

Or if you don’t mind your interest rate going up or down according to market fluctuations and would rather have a loan with features that can help you pay it off quicker (such as an offset account), then a variable rate loan might be a better option.

Or if you can’t decide whether to go with a fixed or variable rate, you can ask your lender about splitting your loan by assigning a certain portion to a variable rate home loan and the rest to a fixed rate home loan (unfortunately, Tic:Toc don't offer split loans yet).
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A roll-to rate, also known as a revert rate, is a variable interest rate that fixed rates roll (or revert) to at the end of the fixed term period or an interest-only period. Your roll-to rate is based on many factors, but it’s typically on par with the standard variable rate at the time of signing your loan document. You can find Tic:Toc's current roll-to rates on our homepage and our home loans page in the 'Legal Things' section (near the bottom). If you're currently on a fixed rate contract, you can check your roll-to-rate by referring to your loan contract. Depending on the cost of funding at the time, you may have a low (or high) roll-to rate.

What happens at the end of my fixed term period?

Depending on your lender, you may receive a reminder closer to the end of your fixed period notifying you of the roll-to rate and the applicable date.

There are a couple of options you may wish to pursue depending on your roll-to date:

You've got a low variable interest rate

Win! When a roll-to variable rate is lower than what is currently available, the world is your oyster - depending on your situation, you could just let it roll to the roll-to rate. Variable rates are variable in nature and likely to move so it’s worth keeping an eye on your rate and shopping around, so you know what's on offer when the time comes to move on.

You've rolled to a high variable interest rate

Oh boy. Hopefully, you knew this was coming before the end of your fixed term period so that you could get a head start on negotiations with your current lender or shopping around for a home loan to suit your needs, otherwise known as refinancing. There are pros and cons so make sure your new home loan meets your requirements.

Fix again

Perhaps you’re an A-type who likes to know exactly how much to budget for loan repayments, or maybe interest rates are low right now. Either way, fixing will help you secure your interest rate and give you certainty around your repayments.

Refinancing

You’ve come to the end of your fixed rate term and there are a couple of features and add-ons you feel could help make life a bit easier. Need an offset account or redraw facility this time around? Or want to consolidate some debt to free up cash flow? Maybe you just want to make sure you’ve got the hottest rate going? Start researching so you can get onto a better deal as soon as possible.
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Budgeting can be hard. Trying to work out where your money is going and how much you will have to spare is stressful. Not to mention planning for unexpected costs that seem to pop up too often. So, having a fixed home loan repayment is something you know won’t change. And the fewer the surprises, the better.

Having a fixed period on your home loan gives you a set interest rate for a set length of time (usually 1-5 years). During this time the interest rate on your loan does not change. This gives you the security of knowing how much your repayments will be for that period. Which means you can create a more accurate long-term budget. Setting your repayments up as direct debits means you won’t think twice.

You can start prepping by using a budget calculator to figure out how much you are spending and where you are spending it. ASIC’s MoneySmart has a handy online planner to help get you started.

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Tic:Toc's live-in loans are what banks and other lenders call “owner occupied” loans - but we like to think you live in your home, not just “occupy” it. So we refer to our loans as live-in home loans instead.

What does owner occupied mean? An owner occupied home loan (or live-in home loan as we prefer to think of them), is a home loan you can get to purchase a property you want to live in. This is different to an investment home loan which is a loan you get for a property you are using as an investment, and aren’t living in. With that being said, you can easily change your investment loan into a live-in loan if your circumstances change (more on that below).
As you’d expect from their names, the difference between an owner occupied (live-in) property and an investment property is whether or not you’re living in it. If you’re living in the property it’s considered an owner occupied property, but if you’re intending to use your property as a source of income (through rental income or capital gains) and living in a different property it’s an investment property. The type of property you have will determine what type of home loan you need (either owner occupied/live-in or investment). Owner occupied home loan rates tend to be lower than investment home loan rates.
This differs from lender to lender and depends on the offset product that is offered. At Tic:Toc you can’t have more than one offset account attached to your home loan, but we offer 100% offset accounts on all of our home loans (variable AND fixed).
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Yes! At Tic:Toc you can have access to both an offset account and redraw facility. When you add an offset account, all external payments will go into your offset, which you can then transfer into the redraw if you wish.
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It depends on the offset product offered by your lender. You should get in touch with your lender to fully understand the nuances of your offset account. And be sure to do your due diligence and read the Product Disclosure Statement for the offset account you’re thinking of getting.
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Types of home loans & features

What types of home loans does Tic:Toc offer?

I don't know what type of loan or features will be best for me. Do I need to know before I apply online?

How do I choose a home loan?

What type of home loan is best for a first home buyer?

Do you have an offset account and how does it work?

What is a home loan interest rate?

Principal and interest or interest only?

What is a variable rate home loan?

What is a fixed rate home loan?

Is fixed or variable rate better?

What is a roll-to rate?

Can fixed rates fix your budget?

Can investors get interest-only home loans?

What is an owner occupied home loan?

What’s the difference between an owner occupied property and an investment property?

Do you have to live in a house before renting it out?

What does an investment loan comparison rate mean?

Can you have 2 offset accounts?

Can you have an offset and redraw?

Can I offset 100% of my home loan?