Articles (All) - MO'R MORTGAGE OPTIONS

How to buy your first home without a large deposit

We get it. There's nothing easy about saving for your first house deposit. Especially when you're renting, paying off a HELP debt and trying to cover the increased costs of living. But you just really want to buy your own home. The more cash you have saved, the more options you'll have when it comes to buying your first home. However, there are a few ways you could buy property now - even without a large deposit. We outline these options below. Pay Lenders Mortgage … [Read more...]

Under-the-radar rate hikes

You're not alone if you sighed in relief earlier this month, as the RBA announced the cash rate would remain on hold for the second consecutive month. This hasn't stopped some lenders from hiking their variable home loan rates anyway. These rate hikes - sometimes known as ‘out-of-cycle’ rate rises - easily fly under the radar. Especially when we've all been getting regular letters in the mail advising our interest rate (and repayment) is about to increase again. Out of interest, how many … [Read more...]

What’s stopping you from exploring your refinance options?

We’ve had 12 interest rate rises over the last 13 months. That’s 12 times your interest rate has increased on your home loan. And 12 times your monthly loan repayment has increased. (Actually, if we’re being technically correct here, the number of times your repayment has increased is likely to be slightly less than 12, because the last few rounds of rate hikes may not yet be reflected in your minimum monthly repayment.) If you haven’t reached out for a home loan review lately, … [Read more...]

2023: Interest rates and the economy

Despite many experts weighing in on the debate as to where rates and the economy is headed, there’s still varying opinions as to how - and when – things will play out. Rather than adding to the noise on interest rates, we’re not going to add our own predictions here. Instead, we’re going to summarise the key thoughts and ideas being shared by leading economists, so you can get an idea of where things might be headed. What can we expect for the rest of 2023? Market commentators … [Read more...]

Which one should you choose – redraw or offset?

Both redraw facilities and 100% offset accounts can help to reduce the interest incurred on your loan, but they work in different ways. Let’s take a closer look to see which option might be appropriate for you. What is redraw and how does it work? A redraw facility allows you to make additional payments into your home loan, and then access these funds should you wish to take them out of the loan at some point later in the future. For example, just say you received inheritance of … [Read more...]

What makes your debt tax deductible?

There are two kinds of debt in this world: the kind that is tax deductible and the kind that isn't. Knowing the difference and how to structure your finances accordingly, can significantly improve your cashflow, opportunities and overall financial position. So what makes debt tax deductible or not? Non-tax deductible debt Let's start by clarifying that we're talking about whether the interest on a debt is tax deductible. A non-tax deductible debt (also known as 'bad debt') … [Read more...]

How can I use equity to purchase an investment property?

If you own property, it's likely you've already heard the term 'equity.' Here we outline what it is, how you calculate it and how it can help you with your next property purchase. What is equity? Equity is the difference between the market value of your home and the current balance of your home loan. Equity typically grows over time due to your property increasing in value and/or the balance of your home loan decreasing. How much of the equity in my home can I release? The … [Read more...]

Why can’t I borrow as much as I’d like to? (Ways to boost your borrowing capacity)

When lenders determine your borrowing capacity, there’s a few factors they take into consideration. We take a closer look at each of the factors here. It’s helpful to understand what factors might be limiting your borrowing capacity, should you wish to maximise it. Income When performing servicing calculations, a lender is simply trying to determine that at the end of the month - after your income has come in to your account and living costs/monthly commitments have come out – … [Read more...]

Does your pre-approval give you the buying coverage you think it does?

You know that conversation you had with your local bank? The one where you walked away from the appointment thinking you were pre-approved? Well, we’re sorry to be the bearer of bad news. But there’s a fair chance you’re not as covered as you think you are. Your pre-approval may not be a pre-approval after all If you haven’t provided recent payslips or supporting documents and/or you haven’t signed a loan application, there’s a very good chance you don’t actually have a … [Read more...]

What is a credit file and how can it impact my loan application?

What is a credit file/ report? A credit report is a statement that summaries your personal credit history and provides a snapshot of your current credit accounts. Lenders use your credit report as part of their decision to approve (or decline) your application for finance. What kind of information does my credit report contain? Your credit file shows all credit accounts held in your name over the last few years (for example - credit cards, later-payment accounts, personal loans, … [Read more...]

3 things you need to do now if you have a fixed rate loan

If you currently have a loan that’s fixed at a rate much lower than variable rates, you may be feeling quite comfortable with your position right now. As variable rates continue to rise around you, you’re happily sleeping at night knowing that for the next 6/12/24 months, your interest rate – and monthly repayment – will remain the same. However, now is not the time to be complacent. Because when your fixed rate loan term expires, you will need to be prepared – and able to pay for - quite a … [Read more...]

Increasing Interest Rates: What can you do about it?

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4 things you can do now to prepare for a property purchase

As the saying goes, ‘What goes up, generally comes down.” Given we’ve seen record growth in property prices over the last few years, it’s not inconceivable that we may see a flattening (or evening out) of property prices over the coming year. 1. Start your research now What are you looking for in a property? If it’s a home to live in, where do you want to live? What features are you looking for? What’s your list of non-negotiables? Being able to answer these questions should form … [Read more...]

Why it pays to explore your refinance options sooner rather than later

If all this talk of rising rates has you worried you’re paying too much yourself, it’s time to do something about it… now. If you have never refinanced your loan, or can’t quite remember the last time you did, there’s a very good chance you’re paying a higher interest rate than you should be. Here’s why…. Lenders don’t think you’re paying attention and let’s face it, many homeowners aren’t. As such, lenders have historically offered their lowest rates to new-to-lender borrowers in an … [Read more...]

Interest rates have increased, so why haven’t home loan repayments increased yet?

As we’ve posted about here and here, in response to the RBA increasing the cash rate over consecutive months, lenders have increased their borrowing rates. And as you would be acutely aware, this means interest costs on your home loan have increased, along with a jump in your home loan repayments. But if you’ve been keeping a close eye on your internet banking portal, you may have noticed that your actual repayment amount hasn't changed yet. You can see the interest rate has gone … [Read more...]

Basic vs Packaged. Fixed vs Variable. What loan should you get?

You're getting ready to lodge an application and looking into the different types of options available. But you're starting to feel a little overwhelmed. Basic vs package, variable rate vs fixed rate... what should you choose? What’s going to fit best with the way you like to manage your money? To assist with your research, here we outline the pros and cons of different loan types available. Basic Variable Rate Loan With a basic variable rate loan, you get simply that – a simple loan (with no … [Read more...]

Lenders tighten lending ratios

Some of Australia’s biggest banks have tightened their lending ratios recently, by reducing the maximum amount they’ll lend to homeowners. But before you start worrying you'll never be able to buy a home, let's take a closer look to see whether this will actually impact you and your next purchase... You may have seen in the news over the last month that lenders have lowered the maximum debt-to-income (DTI) ratio. This ratio is a measure of how much debt a household is taking on, as a … [Read more...]

Planning for your ‘Off-Plan’ purchase

Whether you're buying a property as your first home or purchasing an investment property, purchasing off-plan is a common way to achieve both these objectives. Over the years, we've assisted many clients purchase off-plan properties and have published posts about this buying strategy here and also here. However, due to changes in the lending environment - and some recent instances where clients have experienced difficulty obtaining finance for their off-plan purchase - we wanted to revisit … [Read more...]

Variable or Fixed? Maybe there’s a third option… (and it’s not what you think)

With constant media chatter about interest rates rising, we’re having lots of discussions with clients about the decision to fix all (or part) of their borrowings. And just like with any other aspect of your mortgage, what's best for you is going to depend entirely on your personal circumstances. Below we outline a few things you may not have considered when weighing up the fixed vs variable decision. We also outline a strategy you may not have considered - the “quasi-fix.” So, … [Read more...]

Why does it cost so much (and take so long) to build right now?

If you’ve been house hunting for a while (and keep missing out on auctions), you may have thought about changing strategies and renovating and/or building a new home instead. And you’re not the only one! But perhaps after initial enquiries, it’s going to be more expensive than you first thought?! Or maybe you're well down the track of building, but things aren't quite happening as quickly as you want. Here we take a closer look at the increasing costs of building and why things are … [Read more...]