Low Frills Loans

This is the loan that has the lowest running costs so you pay a lower interest rate. In fact, the interest rate is always lower than standard variable loans because you receive fewer bells and whistles. So check carefully to see which benefits you may be missing out on. The interest rate – whilst staying low – will also still have you at the mercy of market rate fluctuations. Remember, your financial situation today may not be the same in the future and the overall cost of a loan is not determined by the interest rate, rather by how quickly you can pay it off.

Benefits

• Repayments fall when official rates fall
• Rates are always lower than the Standard Variable Loans

Pitfalls

• Repayments rise when official rates rise
• Fewer features, bells and whistles can come at a cost
• Any money held in a savings account with the same lender will normally not off-set the home loan account