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Mortgage Specialists for over 20 Years

Upgrading or Downsizing

Austral Mortgage wil help you decide if refinancing or consolidating with the right choice for you

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Help with your Move

Home Buyers Checklist

Here's a simple guide to how to apply for a Home Loan and a quick checklist outlining what you will need to provide with your loan application

Should you Refinance?

Before deciding to refinance your home loan you should work out the costs of the refinance against what you will save in interest.

Points to consider

Here's an example

Sam and Sally have a loan of $350,000 and have fixed their rate for 5 years @ 7.5% p.a.

After 2 years they want to repay the loan and refinance to a lender offering 6% p.a. variable  If there  is no change in the new lender’s interest rate, this will save them 1.5%p.a or  $15,750 over the remaining 3 years.

BUT... the fixed rate period on their current loan has 3 years to run. The 3 year fixed term  deposit reinvestment rate with the bank is 4.5% p.a.

The difference between Sam and Sally’s fixed rate and the reinvestment rate is 3% p.a.

Their breakcosts will be approximately $31,500 ($350,000 x 3% x 3 years.)

The refinance exercise would cost them $15750 not save them the expected $15750.

Sam and Sally would be better to stay with their existing lender until the end of the fixed rate term and then look to refinance.

If you are consolidating debt you should consider the longer term position. Most people consolidate debt to improve their cash flow. While your cash flow will likely be better (because higher rates apply on personal loans and car leases) if you convert this shorter term debt to long term home loan debt then you will pay considerably more in interest while at the same time, in a lease scenario, the value of your vehicle will be declining. Ultimately you will end up owing much more than the car is worth.

Consolidating debt for a better interest rate

If you are consolidating debt for a better rate as opposed to real cash flow concerns then structure your loan so that it is split into separate accounts

e.g. say

Check out our home loan calculators to properly compare the savings you anticipate and the cost of repaying debt over a shorter vs longer  term.

Want some advice? Contact us to chat about the right option for you

Deposit Bonds

Austral’s Deposit Power Guarantee (also known as a Deposit Bond) is a fast, convenient and inexpensive way for you to arrange the 10% deposit required when you sign contracts on your new property.

Read more about Austral's deposit bonds here

What to look for in a home loan

Whether you are purchasing a larger home for your growing family or downsizing to a smaller home now that children have flown the coop, you want to look for a mortgage that not only puts you in the box seat during the buying and selling process but also gives you flexibility and interest savings over the longer term. 
If you have not yet sold or settled on the sale of your existing home and have found a new property that you want to buy, a Go-Between Home Loan could suit your needs. Alternatively if you have sold and settled then a standard home loan or better still one with an offset account attached, will give you flexibility and the opportunity to save on interest.


If the net proceeds of the sale of your existing home will cover the full purchase price and costs of the new property, and you have sufficient income to service a mortgage,  it may still be worth your while putting a loan facility in place to cover off any planned renovations or unexpected circumstances in the future.
 

What to look for in a home loan when you’re downsizing

Whether you are purchasing a larger home for your growing family or downsizing to a smaller home now that children have flown the coop, you want to look for a mortgage that not only puts you in the box seat during the buying and selling process but also gives you flexibility and interest savings over the longer term.


If you have not yet sold or settled on the sale of your existing home and have found a new property that you want to buy, a Go-Between Home Loan could suit your needs. Alternatively if you have sold and settled then a standard home loan or better still one with an offset account attached, will give you flexibility and the opportunity to save on interest.



If the net proceeds of the sale of your existing home will cover the full purchase price and costs of the new property, and you have sufficient income to service a mortgage,  it may still be worth your while putting a loan facility in place to cover off any planned renovations or unexpected circumstances in the future.

Bridging or Go-Between Home Loans...

...where you have found a home you want to buy but have not yet sold or settled on the sale of your existing property.

These home loans have all the features and benefits of standard loan but generally allow for a period of capitalised interest while you organise the marketing and selling of your existing home.


The lender will take security over both your existing and newly purchased home and provide you with a loan of up to 80% of the value of both properties (the loan amount  will include the provision for the capitalised interest).  If you have sufficient equity in your existing home you can refinance your existing mortgage and borrow 100% of the purchase price plus costs of the new home.


With some lenders you may be required to continue to meet interest payments on the existing mortgage but not the amount borrowed for the purchase of the new home. Unpaid interest is capitalised  i.e  he accumulated interest is added to the loan amount.


On settlement of the sale of your existing home you reduce the outstanding loan balance to a maximum 80% of the value of your new property. You then commence making monthly principal and interest (or interest only payments if elected) per the terms of your mortgage.
When applying for the loan the lender will assess your ability to meet repayments on the basis of the “end debt” amount  not the full loan amount at inception.

Read more about the Austral Advantage Go Between

Home loan with a 100% Offset Account

This home loan has all the features of a standard loan with the additional benefit of an offset facility which can save you interest and reduce the term of your mortgage.

There are two different types of offset accounts – a 100% Offset and a Partial Offset Account. Look for the 100% Offset which will give you maximum savings

Take a look at the Austral 100% Offset home loan

Compare all the Austral Home Loans

 
 

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