Fixed v Variable interest rate

If you're about to buy a house or you're looking to refinance you may be asking yourself, should I fix my home loan or not? Like most decisions, there are pros and cons for each option. Here are some things to think about to help you decide.

Fixed Rates

Advantages

Rate rises will not affect you, you know exactly what you payment is so you can plan ahead.

Disadvantages

Rates decrease it will not apply to your rate, break cost associated if you chose to leave, limits on extra repayments, redraw can be restricted, offset accounts can have restrictions.

Call the helpful team at hello mortgage to discuss before you make your final decision.

Lo doc / No doc loans

Lo doc / Lease doc

All though lo doc loans still exist Every loan has to pass a ‘not suitable’ test that ensures borrowers are in a position to manage their loan repayments. As a result, low doc loans now look much like standard full documentation loans, with the main difference being the documentation or evidence used to satisfy the lender’s loan suitability and credit assessment criteria, including proof of a borrower’s income. Lo doc loans normally are 80% LVR. With a low doc loan you do not need to provide the normal documentation but each case is different. Lease doc loans are available for commercial premises, generally use lease payments to repay loan. Please call our helpful team at hello mortgage to discuss you best option

No doc

Things have changed, Every loan now has to pass a ‘not suitable’ test that ensures borrowers are in a position to manage their loan repayments. As a result, no doc loans now look much like standard full documentation loans, with the main difference being the documentation or evidence used to satisfy the lender’s loan suitability and credit assessment criteria, including proof of a borrower’s income. Each case is different and depending on this the lenders may request some form of documentation which may be less then a normal loan and may also very form a lo doc loan. So please call our happy to assist team at hello mortgage to discuss.

Non Bank Lenders

Can look the same

Non-bank lenders, though, source their money from wholesale funders, which may be Australian banks or overseas institutions. They then on-sell this money to home loan customers (at a higher price). Non-bank lenders also sometimes source money through ‘securitisation’, which involves bundling together a group of mortgages and selling this asset to investors.

Governance is another thing that separates non-bank lenders from mainstream lenders.

ADIs are regulated by APRA (the Australian Prudential Regulatory Authority), while non-bank lenders are regulated by ASIC (the Australian Securities & Investments Commission).

What this means is that while both types of institution are monitored by the authorities, they follow slightly different rules.

Taking out a home loan with a non-bank lender is neither right nor wrong. You’re an individual, so you need to make your own decision based on your unique life circumstances and financial position.

That said, you should at least consider non-bank lenders when doing a home loan comparison. That way, you can decide if the best mortgage product for your situation is, indeed, a non-bank product.