Finance

Buying your first home can seem daunting but it doesn’t have to be.

At Loan Market we specialise in helping first home buyers find the right loan. We simplify the jargon and talk you through what could work for you. We’ll also confirm whether you’re eligible for government assistance for example the First Home Owner Grant. We believe a mortgage is a relationship, not a transaction and aim to personally help you manage your finances for the life of your loan.

Principal and Interest

  • Most common loan type.
  • Both the interest and amount borrowed is repaid.
  • Term can be up to 30 years.
  • Payments can be made weekly, fortnightly or monthly.

TIP Try to pay as much as you can, over and above the minimum amount, in the early years of your loan. It will save you paying extra in interest and reduce the overall term of your loan.

Interest Only

  • Only interest is repaid.
  • Repayments are a lot less than a Principal and Interest loan.

TIP This type of loan is worth exploring if you have surplus monthly income and a good discipline for how you spend your money.

Offset Account

An offset account is a transaction account that can be linked to your home or investment loan. The credit balance of your transaction account is offset daily against your outstanding loan balance, reducing the interest payable on that loan.

TIP This type of loan is worth exploring if you have a significant amount of money to put into your offset account.

Fixed interest

  • Interest rate is fixed for a set period, from six months up to five years.
  • Repayments won’t increase during the fixed term.
  • If interest rates go down you won’t be able to take advantage of a lower rate until your fixed term ends.
  • If you repay your loan in full, or pay off a large portion at once you could be penalised with an early repayment fee.

Variable interest

  • Interest rate goes up or down in line with the rise and fall of official rates.
  • Payments will increase or decrease depending on how often official rates change.

TIP You can change to a fixed rate at any time with no cost.

As a general rule it’s good if you can make extra payments over and above the required monthly amount.
This means you’ll have the benefit of redrawing those extra payments if you have an unforeseen emergency and need money on a short term basis. It’s also important to consider all fees and costs associated with the loan, not just the interest rate. Establishment, valuation, account keeping, portability, repayment holiday, discharge and loan re-fixing fees can all add up.

Check List

Your most recent Group Certificate, or if you are selfemployed, your last two full tax returns, assessment notices and financial statements

Your two most recent payslips

Your most recent statements for any credit cards, personal loans and car loans

Proof of identity documents, including your driver’s licence and passport or birth certificate

Bank statements showing six months of savings

Evidence of shares or other investments

A statutory declaration (if any part of the deposit is a gift), stating the amount of the gift and that it’s non-repayable

Copy of the purchase contract for the property you are buying (if applicable)