Making the most of my home loan
By understanding all the ins and outs of your loan, you may be able to pay off your loan sooner and take better advantage of the benefits on offer.
Your home loan may offer more than you’re aware of. For example:
- Have you fully explored the additional repayment options available to you?
- Have you investigated whether or not you’re able to split your loan between a Fixed and Variable rate?
If you’d like more information on the features of your individual loan contact us today.
What should I consider about my existing loan or when choosing a new loan
Do I want a fixed or variable rate loan?
With a variable interest rate loan, repayment amounts may vary during the term of your loan, as economic conditions change. They could increase or decrease according to whether the rate moves up or down.
Selecting a fixed rate loan can offer protection against rate changes. This means you can know exactly how much your repayments will be for a fixed period of time. Fixed rate loans are only for a limited time (usually up to five years) after which time the loan converts to a variable rate loan.
Should I split my loan?
If you like the certainty of a fixed rate, but would like some flexibility, then you might consider a split loan. You can choose which proportion of your loan you would like at a fixed rate, and which you would like at a variable rate. You benefit from the lower rates and flexibility of a variable loan, but also give yourself some protection against potential rate increases.
Should I get a line of credit?
A line of credit is a smart way to consolidate all your debts (home and personal) into one easy to manage account. It simplifies your banking and gives you flexibility in repaying and accessing your credit. A line of credit account isn’t just a home loan – it’s a facility you can use again and again up to the approved limit, for things like home improvements, investments or any other worthwhile purpose. There’s no need to go through the process of applying for a whole new loan.
Do I want a redraw facility?
If you make additional repayments to your home loan, redraw allows you to access the additional repayments at any time.
Your additional repayments are the difference between your current balance and what the balance would have been without making any additional repayments.
Do I want a mortgage offset?
A mortgage offset arrangement links your variable loan with an offset deposit account, so that money you hold in your deposit account can reduce the amount of interest you pay on your loan. If the deposit balance exceeds the loan balance, no credit interest is payable on the excess deposit balance.
If you’d like more information on the features of your current loan or any future loan contact us today.
Refinancing your loan
If your financial situation has changed from the time you first financed your home, or you need to free up cash in your budget for other reasons, it may be possible to refinance your mortgage so you have lower monthly repayments.
We make refinancing easy, with our wide range of flexible home loans you can choose from. And we have plenty of experience in helping people consolidate debts and build wealth.
What happens if you break your fixed rate loan?
Circumstances change – and if necessary, so can your loan!
If you have a fixed rate loan, you ‘break’ that loan if you:
- switch to a product with a different rate
- switch to a variable rate product
- make additional payments in excess of $10,000 per annum
- fully repay the loan, prior to the end of the fixed rate term
If you break your fixed rate loan, you could incur costs and these costs are payable by you as a fee. The fees that may apply when you break your fixed rate loan are:
- Early Repayment Interest (also known as a ‘break cost’)
- Early Repayment Fee
It’s important to note that break costs may be considerable and can change from day to day. We recommend that you obtain independent accounting and legal advice before you request to change a fixed rate loan as you may have to pay break costs and fees.
What can I do to get a better deal on my home loan
Introductory rate loans
Introductory or ‘honeymoon rate’ loans can be a good way to get started and can help you save. During the introductory period you are charged a lower interest rate, which you can take advantage of to pay more off your loan. When the introductory period ends, your mortgage will generally revert to the variable rate loan.
A low cost loan offering great access to your money when combined with 100% mortgage offset facility on variable rate loans, and now with the option of fixed rates.
Low Doc loans
A Low Doc package is a loan that makes it easy for the self-employed to get a loan. You need to have been self-employed for at least 2 years, and may not need all the documentary financial evidence usually required for a loan. Instead, you certify your income in the form of a declaration. Like all loans, ensure that you have the ability to repay the loan without undue hardship.
I want to know more
If you are still unsure about your current home loan or any future home loan is right for you contact us today.