FREQUENTLY ASKED QUESTIONS
We have prepared a range of frequently asked questions, however, if you have any further questions, please don’t hesitate to get in touch.
Who pays brokers?
Brokers are paid directly from the Lenders that the loan is placed with. This amount does not affect the client or the submitted loan.
What is the difference between interest only and Principle and interest repayments?
The balance of an interest only loan does not reduce whilst interest only repayments are being made. The amount of interest owed on the loan is calculated daily and charged once a month. No additional payment is required. Interest only is suited for investment loans due to the possible tax advantages you can get.
The balance of a principle and interest loan will reduce each month. The interest is calculated the same as above however the actual contracted repayment is more than just the interest so that the loan is paid off in the term agreed to (eg: 25 years).
What does fixed rate mean?
A fixed rate is applied to a loan upon request (either when the loan is first taken out or can be requested during the life of the loan) for a period of 1-5 years. This means that the interest rate is ‘fixed’ and will not change for the period applied for. If the market rate changes, up or down, the fixed rate will remain the same.
There are both pros and cons to fixed rates. A pro is that the repayments are set and you know that they will not change until the fixed rate expires. A con is that you may be liable for hefty fees if you repay the loan during the fixed rate period ( eg if you sell your house during this time).
Can I pay off my loan early?
Paying off your loan early can save you thousands of dollars in interest repayments, however some loans like fixed rate and interest only loans will limit the amount or regularity of extra repayments you can make. Variable rate loans don’t usually impose penalties for early repayment.
Should I put extra repayments onto my loan or in my offset?
Making additional repayments to your loan account has the same effect as making them to your 100% offset account. The advantage of using an offset is that you can access the funds again in the future if need be.
Can I increase my home loan?
Absolutely! Mortgage brokers are intimately involved with the home loan market and the systems and policies of a large number of lenders. Not only do we know where to find the best deals to suit your individual circumstance, we are in a unique position to be able to negotiate with lenders to achieve special rates and discounts on your behalf.
How do I calculate how much stamp duty I have to pay?
Stamp duty is a tax regulated by state government, so the amount will vary depending on property location and value. Some states offer first-home buyer stamp duty concessions and some charge different rates on investment properties.
* Stamp duty is a significant cost, so it’s important to get your calculations right. Contact us for a reliable estimate.
Will it cost me a lot to refinance?
There are a number of fees involved with refinancing, so it pays to look at how long it will take you to recoup the costs of refinancing with the savings on the new loan. You can expect to pay stamp duty, as well as fees like discharge, registration, settlement and valuation from your current and new lender. Lender’s Mortgage Insurance (LMI) will apply if your new loan is for 80% or more of your home’s value.