Key takeaways:
Home loan features may help reduce costs or add flexibility. Offset accounts, redraw facilities, and extra repayments are among the most common options.
Choose features that suit your borrowing needs. Options such as interest-only repayments, split-rate loans and portability are designed for specific situations.
Compare the whole home loan, not just one feature. Consider the interest rate, fees, features and eligibility criteria before deciding.
Lender policies and eligibility vary. Check the fees, limits and loan terms before applying or refinancing.
An Aussie Broker can help you compare home loan features. They can explain your options and help you find a home loan that suits your needs.
While you can still find basic, no-frills home loans, mortgages with loan features are increasingly common. These features are typically designed to help you save money and make repaying your mortgage more convenient.
In this article, we’ll look at 7 different types of home loan features that you might come across.
Note: This article contains general information only. It doesn't take into account your personal financial situation or needs, so consider whether it's right for you before making a decision. Talk to your Aussie Broker for advice specific to your circumstances.
Home loan features at a glance
Feature | Best suited to | Typical cost |
|---|---|---|
Offset account | Borrowers with regular savings | Often monthly or annual package fee |
Redraw facility | Borrowers making extra repayments | Some lenders charge redraw fees; others offer free redraw |
Extra repayments | Borrowers wanting to reduce interest | Usually free on variable loans (limits may apply on fixed loans) |
Portability | Borrowers buying and selling at the same time | May incur lender or settlement fees |
Interest-only repayments | Some investors and eligible borrowers | May have higher interest rates |
Split rate loan | Borrowers wanting fixed and variable features | Usually no separate feature fee |
Cashback offers | Eligible refinancers | Cashback varies by lender and loan size |
1. Offset accounts
One of the most popular home loan features is an offset account. An offset account is like a transactional savings account connected to your home loan. You add your savings to the account, and the balance offsets the interest you are charged on your mortgage.
For example, if you have $200,000 left to pay on your home loan and $50,000 in your offset account, you'll only pay interest on $150,000 of your home loan.
This can lead to massive interest savings over the years, especially if you maintain a high balance in the account. But you can freely spend money from your offset account as desired.
Some offset accounts attract package or account fees, while others are available at no extra cost, depending on the lender.
Before you open one, it's important to do the maths and figure out if your interest savings will outweigh the costs of having an offset account. It's not really worth having an offset account if you aren't going to use it or benefit from it.
2. Redraw facilities
If you've made extra repayments on your home loan, a redraw facility pools these additional funds. You'll be able to withdraw these additional funds, but not any funds that make up your minimum repayment amount.
For example, if you've made $20,000 worth of extra repayments, you'll be able to withdraw this amount (but not any more).
Some lenders charge a fee each time you redraw, while others include free or unlimited redraw facilities, particularly on certain variable-rate home loans. So, it's smart to take money from your redraw in larger amounts and for specific, bigger expenses. Also bear in mind that when you withdraw money, you increase the amount you owe on your home loan.
Extra repayments pay down your loan faster and reduce how much interest you'll pay over the life of your loan, so think carefully before withdrawing from your redraw facility.
3. Extra repayments
Speaking of extra repayments, not every borrower can make them without consequences. If you have a fixed-rate home loan, your lender may not permit you to make additional repayments or might place a limit on the amount you can make.
If you want to make extra repayments, speak to your lender first to find out their policy.
If you make too many extra repayments on a fixed-rate loan, you may be charged break fees for violating the terms and conditions of your loan.
However, if you can make extra repayments, they're worth considering. The faster you pay off your home loan, the less interest you'll pay over your loan term. Plus, you'll be out of debt sooner.
So, the next time you have some extra cash (e.g., from a tax refund, gift, sale of an investment or inheritance), consider putting it towards your home loan.
You might also be interested in: How to reduce your mortgage repayments
4. Home loan portability
Home loan portability is a useful loan feature that helps you keep the same home loan while selling your home and moving at the same time.
Dealing with your home loan when buying and selling can be complicated, so home loan portability can make things more convenient for you.
Home loan portability isn't for every situation, as there can be obstacles that prevent you from being approved for the feature. For example, many lenders stipulate that the values of the properties you are intending to sell and purchase should be of equal value or that the new property must be of a higher value.
You'll also need your sale and purchase settlement dates to align. When buying or selling a new home, it's often a good opportunity to review your home loan and see if it's still right for you. So, home loan portability won't always be the best solution.
Note: Home loan portability is subject to lender approval and eligibility requirements, which can often include a credit assessment.
5. Interest-only repayments
There are two ways to make home loan repayments:
Principal and interest repayments
Interest-only home loan repayments
With principal and interest repayments, you pay down the principal (the loan amount) as well as the interest that accrues on top of the loan.
If you have an interest-only home loan, you pay only the interest as it accrues and don't make any payments toward the principal.
Interest-only repayments usually apply for an agreed period. At the end of that period, the loan generally reverts to principal and interest repayments unless another arrangement is approved by the lender.
Interest-only loans are more likely to suit property investors rather than owner-occupiers. For expert investors, interest-only repayments can potentially be a smart property investment strategy.
Some investors choose interest-only repayments to reduce cash flow commitments during the interest-only period, although this strategy isn't suitable for everyone and should be considered carefully.
It's a good idea to speak to a financial adviser or mortgage broker before pursuing an interest-only repayment plan.
6. Split-rate loans
Most borrowers and prospective buyers will be familiar with variable and fixed interest rates. But did you know you can split your home loan so that one portion accrues interest at a fixed rate, while the rest accrues interest at a variable rate?
This is called a split-rate home loan and can be a good option for borrowers looking to get the benefits of both fixed and variable rates.
You don't need to split the loan down the middle; you could have 60% of your loan fixed and 40% variable, for example.
You might also be interested in: What are the different types of home loans?
7. Cashback deals
Cashback offers aren't a home loan feature, but they may encourage eligible borrowers to refinance.
A refinance cashback offer is a cash incentive paid by some lenders when eligible borrowers switch their home loans. These offers may help offset refinancing costs but are typically available for a limited time and subject to eligibility criteria.
The cashback market has changed in recent years, with many major banks withdrawing these offers.
As of July 2026, cashback deals are more commonly available through customer-owned banks, regional lenders and non-bank lenders.
Before refinancing, check the eligibility criteria. Offers commonly require:
A minimum loan amount (typically $250,000–$400,000).
A maximum loan-to-value ratio (LVR), often up to 80%.
Refinancing from a lender outside the same banking group.
Some offers are also limited to certain professions or membership groups, and some lenders may require you to keep the loan for a minimum period or repay the cashback if you refinance within 12 months or longer.
A cashback offer can be a useful bonus, but it shouldn't be the only reason to refinance. Compare the interest rate, fees, features and flexibility to determine whether the loan suits your financial circumstances and goals.
Although it may be enticing to get some cashback when refinancing, don’t let a cashback deal be the only reason you choose a particular lender or loan product. Consider the home loan as a whole and think about whether it meets your needs.
Note: Terms and conditions apply. Cashback offers are provided directly by some lenders and may only be available for particular loan products.
Which home loan features are right for you?
The right home loan features depend on how you manage your money and your long-term financial goals. While features such as offset accounts, redraw facilities and extra repayments may help reduce interest or add flexibility, others, including portability, split-rate loans and interest-only repayments, are designed for specific borrowing needs.
Before choosing a home loan, compare the interest rate, fees and available features to determine whether the overall loan suits your circumstances. An Aussie Broker can explain your options, compare loans from a wide range of lenders and help you find a home loan that works for you.