Here’s a few examples of structures (and I’ll emphasise here that these are all hypothetical and it’s incredibly important for you to have someone who is qualified to give advice who can tailor your particular situation).

• A young couple, with two incomes totalling $100K / year, no other debt and wanting to complete some renovations of $20K on their property over the next 12 months. They are good savers and excellent with their money. For these guys, fixing a large portion of their lending with a longer loan term, and then keeping $20K on a revolving credit (see types of loans for more info on this) so they can save all their extra money into this account and gradually complete their renovations. Once these are completed, we might then review their structure and make some changes so they can pay more of their lending when they don’t need to save any more for renovations
  
  
• A family with one child and one on the way, and one income, good equity having bought their property five years ago. I’d be considering certainty for them while their family income is lower. So we might consider fixed loans but perhaps structure them over different time periods, like a ⅓ for 1 year and ⅔ for 3 years. Depending on the interest rate environment, this is often a good way to make the most of cheaper shorter term rates, but also give enough certainty during a period where there is not likely to be a lot of extra money around.
  
  
• A young couple with $150K income, who had a 10% deposit but bought a house they didn’t need to do much work on. This is a very common one, and a lot of young couples are now looking at renovated homes because it’s a bit simpler than trying to borrow money for immediate renovations, or saving over a period of time. Buying something completed (or new) means you have to spend more, and pay a slightly higher rate, but if you can afford to make repayments then it does allow you more flexibility. For a couple like this, if they were comfortable with it I’d be considering a shorter loan term to allow them to make up the gap between 10% and 20% equity quickly over a period of 1-2 years and then have access to cheaper rates.

There are a million ways to set up your loan, and these are only three common ones. I cannot stress enough that having someone review your situation and ask questions about your future plans to make sure you’re set up for the first 1-2 years. Of course plans can change but there are plenty of scenarios (like renting your house out, a new baby, a wedding, a big move, or an OE) which should be planned financially for in advance.

The next little thing I’ll harp on about is reviewing your structure. What worked for you for your first home five years ago might not work for you now, and what works now, might make life difficult as you move through the life cycle into having a family or even into retirement.