Q. What is Stamp Duty?
A. Stamp Duty is a State Government tax payable by the purchaser of real estate based upon the purchase price of the property. Depending on individual State legislation this tax is generally paid prior to settlement. You can increase your loan to cover these costs and we will release funds prior to settlement (conditions apply). First time home buyers may be exempt from stamp duty or entitled to a rebate or concession such as the First Home Owner Grant Scheme.

Q. What is the First Home Owner’s Grant Scheme?
A. Eligible first home buyers can receive non-means tested government assistance of $7,000. The scheme is administered by the States and Territories. It covers only the purchase of your first home in Australia. If you are married or living in a de facto relationship, you must make a joint application for the grant with your spouse or de facto. Neither of you can have owned a home previously, whether individually, or with any other person. You will be eligible to apply if you:

  • are buying your first home
  • are an Australian citizen or permanent resident
  • intend to make the home your principal residence, and
  • start living in the home within a reasonable time. The payment will be the same regardless of your income.

Q. What is the difference between a fixed rate loan and a variable rate loan?
A. A fixed rate loan is where the interest rate remains the same for a period of time, and at the end of the term, the loan reverts to a variable rate. A variable rate loan is where the interest rate generally goes up and down according to the fluctuations in market rates.

Q. Can I switch between a fixed rate and a variable rate?
Yes. You can change from a fixed rate to a variable rate, or vice versa, at any time. If you switch from a fixed rate loan, you may need to pay an Administration Fee and an Early Repayment Adjustment.

At the end of a fixed rate period your loan will automatically move to the variable rate (at no cost), or you can switch to another fixed period.

Q. What is a Comparison Rate?
A. A Comparison Rate expresses some of the costs of a loan into a single interest rate. The aim of the Comparison Rate is to help consumers make a more informed decision on the costs associated with a loan and help them to compare various loans and services offered by financial institutions and mortgage providers. The formula for calculating a comparison rate is regulated by the National Credit Code and all Australian financial institutions and mortgage providers are required to use the same formula.

Q. What is Lenders' Mortgage insurance (LMI)?
A. LMI protects lenders against loss should a borrower default on their loan. If the security property is required to be sold as a result of the default, the funds received from the sale may not cover the full balance outstanding on the loan. In this scenario, the lender is entitled to make an insurance claim to the LMI provider for the reimbursement of any amount outstanding.

LMI should not be confused with Home Insurance, or Loan Protection Insurance, which covers the borrower in the event of sickness, unemployment, disability, or death.

Q. What is a redraw facility?
A. This allows you to access any additional repayments you have made on your loan. Any redraw amounts get added to the amount you still owe on the home loan.

Q. What is the difference between a Principal and Interest Home Loan and an Interest-only Home Loan?
A. A Principal and Interest Home Loan is where the principal and the interest are repaid together for the term of the loan. Whereas an Interest-Only Loan allows you to pay only the interest on the loan, rather than paying both principal and interest. This payment option may be useful for property investors because it may maximise the investor’s tax deductions