FAQs

Although using the interest rate to compare loans is a good starting point, it is important for borrowers to look at the comparison rate as well. Unlike the interest rate, the comparison rate indicates the true cost of a loan. It is designed to help you understand the overall cost of a loan based on several relevant factors, rather than just interest rate. It includes the fees and charges related to the loan, such as applications fees, monthly account keeping fees and annual fees. Note: comparison rates are based on a $150,000 loan over a 25-year loan period. To get a better idea of the actual comparison rate for the loan you are looking for, ask for a Key Facts Sheet. This will contain a personalised comparison rate which is tailored to your loan amount and loan term. Use this to compare different loans and lenders.

Interest rates can vary according to the Loan to Value Ratio (LVR). LVR is the loan divided by the value of the property. The rates often vary based on the LVR or the loan amounts. Some loans have annual fees and some don't. There are 37 lenders that we can compare the best options with. We can crunch some numbers and work out which one will save you the most over the life of the loan.

The more information you have, the better to process your loan application quickly and successfully. There is a list of requirements lenders need before they can process your loan application, so if you enquire about these documents at the beginning, you will be organised and prepared when you submit your application

Lenders differ as to how much they will lend, relative to the value of the property. This will affect the deposit amount you will need to save. For example, if the lender is willing to lend over 90% of the purchase price of the property, it means that your deposit will be 10% or lessof the purchase price. However, there are other costs involved like stamp duty, conveyancers costs, government transfers and lenders mortgage insurance. Get estimates on all costs so you know what your savings will cover.

Borrowing capacity is calculated based on using an assessment rate to examine your
application. Lenders have their own assessment rate which is based on their risk, which is why your borrowing capacity may vary from one lender to another. Aside from the assessment rate, a lender may also consider other factors and will load your existing loans with a buffer and account for all your incomes. Your financial dependents are also considered when assessing your borrowing capacity. Using the borrowing capacity calculator will give you an idea of how much you can borrow. [Borrowing Capacity Calculator: Please note that these calculations are illustrative only, talk to us for more accurate indication]

Borrowing capacity and affordability may seem like they are interchangeable, but they are not. Borrowing capacity is calculated by lenders based on their assessment rate, allowing them to assess whether your current financial circumstances will allow you to service your mortgage over the specified loan period. Meanwhile, affordability has more to do with your lifestyle and the choices that you make daily - how people spend their money differs. Therefore, the costs of living lenders use to determine borrowing capacity seldom match your actual spending patterns.

Most lenders offer either monthly, fortnightly or weekly repayments. However, it is worth checking with the lender to see which ones are available in case you wish to change the repayment frequency down the track. Is there the option to change your repayment type from principle and interest to interest only? If things get tight, like if you start a family, you may wish to just make the interest repayments for a period to give yourself a bit of extra breathing space.

Lenders Mortgage Insurance (LMI) covers the lender if you default on a repayment. With some lenders if you are borrowing above 80% of the value of the property, you will be required to pay for this insurance. Normally it is added to the loan and can amount to thousands of dollars. However, every lender is different, which is why it is important to speak to us beforehand.