FAQ

Q.How much deposit do you need to buy a house?

  1. There’s no simple answer to this question. It depends on a range of factors – from how much a lender is willing to lend to you, to whether you’re willing to pay a little more on the loan.

  2. It can be hard to save up a 20% deposit, as well as upfront costs. Be realistic about what you can achieve – if 20% feels out of reach, there may be other options available to you. These include Lenders Mortgage Insurance (LMI) or family support. Don’t forget to factor in your upfront costs, too.

  3. Most banks are generally willing to finance home purchases of up to 95%, provided you have a very strong employment history, savings history and evidence of genuine savings. The loan amount will also strongly influence the lender’s decision. In some cases you can borrow up to 100% plus costs using a Guarantor.  

We can help you find the best option for your scenario.

Q. What’s Lenders Mortgage Insurance?

A. Lender’s Mortgage Insurance is an insurance that protects the lender in case you default on your home loan, and the property sale isn’t high enough to cover what you owe. You pay for the equivalent cost of insurance, either upfront or as part of your loan repayments.

With LMI, you may be able to borrow with a smaller deposit (as low as 5% for many lenders). That’s if you’re happy to pay for it. Yes, LMI adds to the cost of your home loan. But if you can justify the amount, it could help you climb onto the property ladder sooner because you don’t need to worry about that bigger deposit of 20% or more.

 

Q. wHAT’S A NO DEPOSIT LOAN?

A. With a family guarantee, you may not need as much of a deposit and you don’t have to pay LMI. It could get you into your first home sooner. Your guarantor uses the equity in their own property as security for your loan, which means they agree to follow through on your loan if you default or are unable to pay. It’s also worthwhile reminding the guarantor to seek independent legal advice before making a commitment to you.

 

Q. Is it a good idea to refinance my home loan?

A. Switching lenders is often a smart move if you are looking to reduce the interest that you are paying for your loan.

Give your home loan a health check. Ask us about a quick home review, where an specialist will help you explore the things that matter most to you, then suggest some practical steps to improve your finances so you can get to where you want to be faster and at no cost! This could save you thousands of dollars just by changing lenders.

If you'd like to take advantage of features like redraw and offset facilities, plus the ability to make extra repayments, talk to us about making the most of your loan.

You may be able to take advantage of equity in your current home.
By now, you may have accumulated some equity in your existing property. Talk to our home loan specialists about using that equity for renovations, investment opportunities or another purpose, according to your needs.

Do you have a fixed rate loan that's about to expire?

When a fixed term ends, the loan generally reverts to a standard variable rate. Now may be a good time to get a more competitive rate on your home loan, so compare our loans.

 

Q. Home loan offset accounts: how do they work?

A. Linking a transaction account to your Home loan allows you to reduce the amount of interest you pay on your home loan. This means that where a $300,000 home loan is linked to an everyday Offset account with a $50,000 balance, the amount on which the home loan interest is calculated is reduced to $250,000. Your repayment amount will remain the same, meaning more of your repayment goes towards paying off the principal.

Once you have offset set up, you can manage your accounts easily, whether it is to link, de-link or change the account you offset your Home Loan against, all via Online Banking.

 

Q. What is a pre-approval? And why do you need it?

A. It's the first step to take towards owning a property, the first impression you will make on the bank, and the best way to reveal the perimeters of your budget.

The bank conditionally approves or denies you for a loan before you apply to buy a house. ... Most banks offer a pre-approval which lasts for 3 to 6 months, giving you plenty of time to sort out the right home loan.

In other words a pre approval means the bank will lend you X amount of money provided you find a suitable property and your income and circumstances don’t change.

This allows you to make stronger offers on property with shorter finance terms, meaning you can get a better deal and into the home of your dreams sooner.