FAQ

Nothing! We help you find the right lender for your home loan and they pay us a commission, which we’ll always tell you about. 

There is no additional charge to you by us or by the lender for using a mortgage broker. 

The law requires Mortgage Brokers to work in your best interests. This is not the case for banks.

Banks and other lenders can only sell you their products. Whereas, a mortgage broker will scan the market, shop around various lenders and find you the home loan that best suits your individual circumstances.

After you take out your loan, we monitor your loan regularly, provide you with market updates and keep an eye out for a better deal, including a better interest rate. It is very unlikely that a bank would ever contact you directly with a better deal.

That’s our job!  A home loans is a big decision and can be very confusing. We’ll talk to you to understand your financial situation, including what you own and what you owe, your goals and then match you to the home loan that suits you best.

We’ll talk you through the options and help you decide what’s right for you without the pressure of sales targets that drive many of the banks.

Loan to Value ratio (LVR) is an important consideration for your home loan. It helps us work out the amount you can borrow, the deposit amount you need to save and therefore the type of loan you need. 

LVR is the amount you borrow compared to the lender’s assessment of the value of the property, expressed as a percentage. So, if your property is valued at $500,000 and you need to borrow $400,000 to pay for it, then your LVR is 80%.

Your LVR is a major consideration when finding the right lender and the right home loan for you. Most lenders will require you to have Lenders’ Mortgage Insurance (LMI) if your LVR is higher than 80%.

Lenders Mortgage Insurance (LMI) is useful if you don’t quite have enough savings for a 20% deposit and can help you purchase your property sooner.

It is a once-only insurance-type premium charged by most lenders and paid by you if your Loan to Value Ratio (LVR) is higher than 80%. It protects the lender in circumstances where you become unable to re-pay your loan.

You can pay LMI at the start of the loan or it can be added to the total amount you borrow.

We’ll match you to the right lender for your situation.  Different lenders have different policies for LMI.  Some lenders have special exemptions for some specific occupations.  Having a guarantor for your loan could also help you avoid LMI costs.

Each lender has different policies on the amount you can borrow, referred to as your borrowing capacity. We assess your individual circumstances and match them to the amount you can borrow from different lenders. 

You can use our calculators to get an idea of possibilities.

Lenders generally consider five main aspects:

1. Your capacity to re-pay the loan. Lenders will look at your employment history and salary.
2. The cash you’ve saved. It’s a standard expectation that you have a deposit saved. If you have 20% or more of the value of the property you can avoid LMI costs.  However, some lenders may approve some loans with only a 5% deposit.
3. The property value or ‘appraisal price’ as determined by the lender. This helps to determine your loan amount since your property is used as security or ‘collateral’ by the lender to ensure they get their loan re-paid.
4. Your financial history. Your credit rating, expenses, what you owe and what you own (statement of position) enable the lender to decide how much and for how long they’re willing to lend to you.
5. Current market conditions. Economic circumstances will likely affect the interest rate you’ll have to pay, whether additional security might be required and your repayment schedule.

Sometimes, lenders may be willing to loan you more than you initially thought. It is important to ensure you can afford the repayments, including in future if interest rates rise and your repayments increase.

Think about whether your current circumstances are likely to or might change and what are some potential risks for you to consider.  For example, additional insurance will be an additional cost but might help you cope if you get sick or injured.

Many lenders can provide ‘pre-approval’ which is an agreement in principle to lend you a certain amount, subject to certain criteria and the final loan approval.  Pre-approval of a loan can allow you to bid at auction or agree to purchase a home for sale with greater confidence that a home loan will be available to you.

Saving for a deposit on a home can be quite difficult, but having a guarantor may get you there sooner. A family member with sufficient equity in their home can use it as a security guarantee.

Say you want to buy a home for $750,000 but only have a $75,000 (10%) deposit. This may be insufficient for some lenders. To reach a 20% deposit and avoid LMI, a security guarantor can offer up the additional $75,000 equity in their home.

A security guarantee is a serious commitment and a big decision for any guarantor. We can talk through this to see if it’s a possibility and something you and your guarantor agree to do.

Various grants and incentives are available from the government to help first home owners.  These vary by state. This is free money from the government to assist affordability of first homes but of course there are strict eligibility criteria and other conditions.

Talk to us to check your eligibility and check out www.firsthome.gov.au.

The fees you’ll need to pay for your home loan vary by state in Australia.  Our Property Cost Buying Calculator gives you a guide on what they cover.

Most people try to reduce interest costs and pay off their home loan early if they can.

One way to do this is to link your transaction account to your home loan with an ‘offset’ account. That way you still have access to your cash but your account balance can ‘offset’ or reduce the amount of your loan and so you pay less interest and potentially pay-off your home loan faster.

Generally, offset accounts are only available on variable-rate, not fixed-rate loans.  Some lenders permit multiple offset accounts for the one home loan.

Additional amounts you pay into your home loan can reduce the amount you owe and therefore the interest charged and the term of your home loan.

Home Loans with a ‘re-draw’ facility allow you to take back or withdraw those additional amounts you’ve paid into your home loan.

There may be restrictions on how much, how often and when you can re-draw these funds, depending on the lender and the loan type.

The interest rate on most home loans is ‘variable’, which means the interest rate can increase or decrease whenever the lender decides. Changes to interest rates often coincide with changes to “official” interest rates by Australia’s central bank, the Reserve Bank of Australia. 

To avoid these changes to your interest rate, many lenders offer a ‘fixed rate’ agreement which will specify the exact interest rate that will apply to your loan, or a portion of your loan, for an agreed period of 1 to 10 years.  Fixed rates provide you with certainty on the interest rate you’ll be charged for that period.   

However, fixed rates can be higher or lower than variable rates at different times and normally cannot be changed without paying a penalty. Fixed rate home loans will also most likely prohibit or restrict additional loan repayments. You may also be unable to ‘switch’ from a fixed to a variable interest rate during the period of your fixed rate agreement. Fixed rate home loans will generally not allow offset accounts.

Talk to us and we’ll find you the best arrangement for your existing home loan.

Many home loans allow you to ‘re-finance’ at a different (cheaper) interest rate, change the term of your loan or move to another lender prior to the expiry of your loan term with only small or no penalties.

During the term of your loan you can expect to hear from us if re-financing your loan would get you a better deal. Equally, you can contact us any time to check.

Home loans to build your own home are referred to as ‘construction loans’. We can help you understand the differences, including additional documentation you’ll need and the process for ‘drawing-down’ or obtaining funds from your home loan once its approved.

If you have an existing home and its value exceeds the amount you owe on your home loan, then you have ‘equity’ that you might want to use to fund the deposit on a loan for an investment property. You may be required to use your existing home as additional security for the lender to approve your investment property home loan.

Taking out a home loan or adjusting your existing one is a big, complex decision.  There are so many questions you might have; particularly if this is your first time. 

If your question isn’t here, that’s why we’re available at a moment’s notice.  You can call or message us on 1300 200 747, send us a message here and we’ll get get straight back in touch to have a chat or meet up face-to-face since we’re part of your community.