Mortgage Broker Adelaide

Banner Six Step Buyer Checklist


This is where things can get confused and most people don’t spend enough time understanding the options available. The right choices here are critical. Read it through and contact us on 1300 764 247 for a face to face explanation and assistance.

  • Fixed or variable
  • Split loans
  • Basic home loan
  • Honeymoon loans
  • No deposit home loans
  • Redraw facility
  • 100% offset account
  • Line of credit
  • Professional packages
  • Low doc loans
  • Bridging loans
  • Reverse mortgages
  • Family products
  • Deposit bonds

Fixed or Variable home loans

The basic interest rate on a home loan is known as the standard variable rate. The rate is calculated using the interest rate set by the Reserve Bank of Australia, which changes according to economic criteria set by the Bank. As the name suggests a variable rate loan may go up or down during the term of the loan.
Many lenders also offer loans at a fixed interest rate. This means that your interest rate does not change for a given period of time – usually from one to five years.
Fixed rates are generally higher than variable rates, because they include a premium to keep the rate fixed, and thereby protect against the risk of rising rates. The longer the term, the higher the premium.
The certainty of a fixed rate can help with budgeting in the early years of a home loan – it’s good protection against the unexpected.
As a rule of thumb, if a rise in interest rates of more than 2% would mean that you couldn’t cope, then it might be a good idea to fix at least a portion of your loan.
Usually you cannot make extra repayments or vary repayments with a fixed rate loan. These loans also carry penalties if you cancel the loan.
As always, talk to your Fidelis Financial Broker for more information.

Split loans

If you are attracted by 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.
As always, talk to your Fidelis Financial Broker  for more information

 Basic home loan

The main feature of a basic home loan is a very low variable interest rate with little or no regular fees.
These loans offer few extra features. For example, if you want the flexibility of a redraw, you generally pay extra.
As always, talk to your Fidelis Financial Broker  for more information.

Honeymoon loans

A discounted introductory rate for the first few months or years is a popular feature on home loans. For example, your introductory rate might be two percent below the standard variable rate. Your rate will change if interest rates change, but it will remain cheaper than the standard variable rate.
During the introductory period take advantage of the lower interest rate and pay off your loan as quickly as you can. When the introductory period ends, your mortgage will revert to the standard variable or fixed rate. These loans may have high fees if you wish to cancel the loan during or immediately after the initial period.
As always, talk to your Fidelis Financial Broker  for more information.

No deposit home loans

Some lenders also now offer no deposit home loans covering 100% of the property’s purchase price.
In some cases, your lender will ask you to pay stamp duty and other costs and fees yourself, but with first homebuyer incentives and grants, these have been greatly reduced.
A handful of lenders will lend more than 100% so that your loan also covers these fees, but home loan pre approval is harder as strict lending criteria apply, and you may also pay a higher interest rate.
As always, talk to your Fidelis Financial Broker  for more information.

Redraw facility

Loans with a redraw facility allow you to put extra money into your loan. You can take the money back out again when you need it.
Over time these payments can significantly reduce your interest payments and the life of your loan. If you think that you might be able to pay a little bit extra into your mortgage, either regularly or intermittently, then this type of loan might work well for you.
Some lenders charge a fee to activate this feature, and/or a fee each time you redraw, so you need to take these costs into consideration.
As always, talk to your Fidelis Financial Broker  for more information.

100% offset loans & accounts

With an offset account your income is paid into an account that is linked to your loan. You can use the account for all your:

  • EFTPOS
  • cheque
  • Internet banking
  • credit transactions.

The balance in the account is offset against your loan. The more money you keep in your account, the faster your loan is reduced.
These loans are usually charged at the standard variable rate or higher, and may have other fees.
As always, talk to your Fidelis Financial Broker  for more information.

Line of credit

With a line of credit, or an “all in one” account, you pay all your income into your loan account. Essentially it all goes to pay off your loan, but you also use your account as your cheque, credit and savings accounts combined – almost like a simple redraw facility. Keeping money in the account can reduce your loan amount and your interest payments.
You have a pre-approved loan amount that you can access bit by bit, or all at once. This is a very flexible way to borrow, but interest rates tend to be higher than standard variable rates, and there are usually fees.
These loans are more difficult than standard loans for most people to repay because there is no set monthly repayment.
As always, talk to your Fidelis Financial Broker for more information.

Professional packages

Professional packages can offer substantial discounts and special benefits, but are only available to those who satisfy specific criteria.  The key criteria for most professional packages are that the home loan be in excess of $150,000, and that you earn more than $50,000 per annum.
You do not actually need to be a white collar ‘professional’ to qualify.
The benefits vary between lenders, but in general can include interest rate discounts of between 0.50 and 0.75 per cent for the life of the loan, lower fees and discounts on other bank products.
These are generally great products and well worth considering if you qualify.
As always, talk to your Fidelis Financial Broker  for more information.

Low doc home loans

With no need for documentation to prove income, low doc home loans are designed for borrowers who would not normally comply with the usual income verification policies for standard home loan products.
For example, people with irregular income streams such as the self-employed, those who have difficulty in separating their personal and business cash flows, or who do not yet have up-to-date financial statements.
Borrowers must complete a self-assessment of their financial position in the form of a declaration and they should be sure that they have the ability to repay the loan without undue hardship. Lenders require a substantial amount of equity in the property being offered as security and a clean credit history.
As always, talk to your Fidelis Financial Broker  for more information.

Bridging loans

A bridging loan (or relocation loan) is a short-term loan that covers the gap period between purchasing your new property and selling your old one.
These loans are offered at the standard variable rate and usually have a term of six months if you are selling your property.
Each lender assesses bridging loans differently, so it pays to have an expert on your side. All lenders will require you to have significant equity in your property for a bridging loan.
As always, talk to your Fidelis Financial Broker  for more information.

Reverse mortgages

For anyone aged 60 or over, a reverse mortgage can free the equity in their property without it being sold. Depending on their age, applicants can borrow up to 45 per cent of the value of their home with funds advanced in one payment on settlement, or as needed.
No repayments are required over the life of the loan. Interest fees and charges are capitalised to the loan and repayment is deferred until the property is sold, the borrowers are no longer living in the house, or the borrowers are deceased.
Lenders apply strict conditions to reverse mortgages. For instance, before funding can take place, all applicants are required to seek independent financial and legal advice.

Aged Care Accommodation Bond Finance

An Aged Care Accommodation Bond loan provides a flexible solution for senior clients who wish to retain the benefits of owning their own home and at the same time secure a place in a residential aged care facility of their choice.
It enables you to continue to own your own home, whilst renting it out to generate additional income, allow family members to move in, or simply arrange a more orderly sale of the property. It also enables you to retain your Centrelink entitlements for longer.
There is no requirement to make loan repayments over the life of the loan unless you choose to do so.
Interest fees and charges are capitalised to the loan and repayment is deferred until the property is sold, the borrowers are no longer living in the house, or the borrower(s) has passed away.
Borrowers must be 70 years of age or older and the family home must be unencumbered.
Lenders do apply strict conditions to these loans including a requirement to seek independent financial and legal advice.
Speak to your Fidelis Financial  Personal Broker for more information.

Family products

There are a number of innovative new mortgage products specifically targeted at first home buyers. These new home loan products assist young people wanting to enter the property market for the first time by allowing family members to help out.
These loans have the added bonus of reducing the Loan to Value Ratio, meaning that borrowers can dramatically reduce, or even avoid, paying mortgage insurance.
As always, talk to your Fidelis Financial Broker  for more information.

Deposit bonds

A deposit bond (or deposit guarantee) is a simple and cost-effective alternative to a cash deposit when purchasing property.
This is particularly useful if you are buying at auction, as it means that you don’t have to keep a significant sum of cash on hand for what could be a prolonged period of time – and it enables you to move quickly when you have to.
A deposit bond is also an excellent solution for investors who don’t have cash at their disposal and don’t want to cash in investments such as shares.
As always, talk to your Fidelis Financial Broker  for more information.