A: (1) Table loan: This is the most common type of home loan. With most lenders, you can choose a term up to 30 years. Most of your early repayments pay off the interest, while most of the later payments pay off the principal (the lump sum you borrowed). You can choose a table loan with a fixed rate of interest or a floating rate.
(2) Reducing loan: Reducing or straight line mortgages repay the same amount of principal with each repayment, but a reducing amount of interest each time. These are quite rare in New Zealand. Payments start high, but reduce (in a straight line) over time. Fees are similar to table loans.
(3) Revolving credit loan: This works like a large overdraft. Your pay goes straight into the account and bills are paid out of the account when they are due. By keeping the loan as low as possible at any one time, you pay less interest because lenders calculate interest daily. You can also make lump sum repayments and re-draw money up to your limit. Some revolving credit mortgages gradually reduce the credit limit to help you pay off the mortgage.
(4) Interest-only: You pay the interest-only part of your repayments, not the principal, so the payments are lower. Some borrowers take an interest-only loan for a year or two and then switch to a table loan. Normal table loan application fees apply.