Mortgage, it’s a scary-sounding word. Mort is a Latin root word for death; us mere mortals are destined to be claimed eventually. In the middle ages this word literally meant “death pledge” a pledge to be held until death.

Luckily, we live in the 21st century, and a mortgage isn’t a scary death pledge, it is simply an agreement made by a lender or bank. A mortgage sees a bank take ownership of your home, in a  contract to sell it back you in repayments. If you are looking to secure your own home, chances are you will need to take out a home loan. A home loan can be a manageable way to own a slice of Australia, here’s why a home loan shouldn’t be feared but embraced.

Low interest.

Unlike a personal loan, a home loan is protected by collateral. An unsecured personal loan, depending on your credit history, can attract upwards of %20 interest, with some loans exceeding %30! That’s a lot of interest paid on a small amount of money borrowed.

A home loan is different, the loan, and your ability to repay it, are secured by the value of your property. If you are consistently unable to make the loan payments, the lender can recover the money lent by repossessing the home. The insurance provided by this mortgage makes repayment interest rates very low, with the cheapest home loans attracting less than %3 interest.

A cheap home loan means low repayments and more money in your pocket. Borrowing a large sum of money can be scary, but with super-low interest rates on a cheap home loan, you can borrow big for the future, with manageable payments now. 


Buying a property isn’t all about the cheapest home loan. It is about investing in something for the long term. A home can be an excellent investment and offers a slew of benefits to not just the investor, but regular hard working Australians. 

Benefits for the first time homeowner includes a reduction or elimination in stamp duty, as well as a one off payment from the government. Owning a home gives you a powerful asset that will give you leverage when it comes to applying for finance. 

The biggest advantage of owning your own home is the living security it provided. There is a reason why owning a home is referred to in many countries as ‘the great dream.’ A cheap home loan is a practical way of owning a home now, a big reason why you shouldn’t fear a home loan.

Some home loans allow you to make extra repayments and even withdraw funds. Having a home loan with a redraw facility gives you access to funds in an emergency, say if your roof collapses in heavy rain or the family car needs urgent repairs. 

Building value.

The end goal of a home loan is to pay it off and own your own home. I have already discussed some big advantages of owning your own home, but what about the loan itself? There are some hidden benefits of successfully repaying a home loan. 

Your credit score will be vastly improved by paying out a home loan, and as such, your ability to borrow will be heightened. Not only will you be able to borrow more, but you will enjoy reduced interest rates as your ability to make repayments is clearly demonstrated. Less risk for the lender equals more power to the borrower.

Taking out a home loan is a fantastic way of building your credit score, and gives you financial reach past your means. Yes, borrowing a large sum of money can be a harrowing experience but when you remember what it’s for, it will all be worth it. Don’t be scared of a home loan, embrace it for what it is, and what it can do for you.