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We have a working relationship with numerous banks and other lenders and can provide you with access to hundreds of options when it comes to financing a home, vacant land, commercial property or sourcing a specialised finance solution just for you.

This allows us to provide you with the most efficient and cost-effective method of obtaining finance that fits your financial goals and circumstances.

We’ve helped many borrowers, including low-to-moderate income borrowers with less than perfect credit histories, so go ahead and get in touch with us, we’re here to help you.

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A significant number of lenders have been setting about putting up their fixed mortgage rates over the past three weeks. This usually indicates that the banks are expecting interest rates to go higher.

The rate cycle hit rock bottom a few months back and since then the fixed rates have been steadily climbing

Arguments for fixing

Repayment certainty is the predominant reason for fixing your home loan. A lot of people budget on certain repayments to be made and therefore a fixed home loan is the answer for this type of borrower.

If you are concerned about job security or you think our economy will recover to a point where inflation takes off and the Reserve Bank is forced to put rates up, then fixing can give you a high level of financial certainty.

Arguments against

The downside is most fixed rate home loans are inflexible. You can’t make extra repayments and if you need to change your loan or sell your house, expensive break costs apply.
Break costs are applicable when you sell your property or want to move your fixed rate loan to another product or swap to another lender altogether. This is probably the biggest reason to consider when fixing your home loan.

Before fixing your home loan always consider how long you intend keeping your property and be mindful of any factors out of your control which might force you to sell your property or change your home loan before the fixed period has expired.

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We have seen a lot of applicant’s loans being affected as the lending policies have become more stringent. This is mainly to do with the requirements of the lender mortgage insurance companies.

Lender Mortgage Insurance is an insurance which a bank has to take out on a loan whereby they lend over 80% of the value of the property or purchase price. This is for a full documented loan application. For a lo doc application the loan has to be insured when a lender lends over 60% of the value of the property or purchase contract.

This insurance is compulsory for the lenders and the downside is that the borrower has to pay for it. There is no benefit at all to the borrower as this insurance will pay out the lender if your loan defaults and the lender have to sell up your property in order to reclaim their funds. Most lenders will sell the property not at a profit but to get back the monies owed to them.

If there is a shortfall on the sale price and the monies owed to them, this is where the lender mortgage insurance companies kick in and pay the lender any shortfall.

Some lenders have their own in house mortgage insurance and therefore different lending criteria and policies will be in place, depending on who the lender is.

Ultimately the final decision on whether the lender can lend the money or not comes down to the lender mortgage insurance company and not the lender where lender mortgage insurance is involved.

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Break costs are a penalty incurred for early repayment of a fixed rate home. They are imposed by the lender as a way to recover interest they may lose if you break a fixed rate contract to move to a cheaper loan.

The size of your break costs will be determined by the term you fix for (number of years), the rate you’ve fixed at and the margin between that fixed rate and prevailing interest rates at the time you break the contract.

Break costs can also apply on some fixed rate home loans even if you simply want to sell your current home and upgrade. Read the fine print with all your loan contracts as not all fixed loans have a portability clause which says you can continue your home loan if you change properties.

Depending on lender and term and conditions of loan contract, break costs can be extremely expensive.

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