Features of Home Loan
The interest rate cannot be the only consideration when choosing a home loan
The interest rate cannot be the only consideration when choosing a home loan; other characteristics connected with your loan could also be necessary.
All-in-one home loans
All-in-one mortgage use your savings to reduce your home loan balance interest, which lowers your home loans’ overall cost.
All-in-one loans are also known as a home equity loan, and a single household loan and daily transactions account. It works by directly depositing your wages and other income on your house credit account, and you withdraw it by ATM, EFTPOS, or credit card when you need money. Like a regular transaction account, you can also set up direct debits from your All-In-One account.
Any surplus in the remaining cash of your repayment requirement is credited to your home loan balance at the conclusion of the month and reduces the interest charged.
An all-in-one home loan only fits disciplined borrowers who can stick to a budget or experienced investors. The interest rate on all-in-one loans can be slightly higher than the standard variable rate, and a monthly access or account fee may also be charged.
All-in-one credit lines and offset accounts are similar. Talk to your BuildME mortgage adviser to evaluate your requirements and negotiate a competitive deal.
A rewriting facility allows you to access extra funds paid into your home loan, up to the number of additional refunds, if you need extra money. In general, this feature is not available for fixed-rate home loans.
This facility allows you to make additional refunds on your home loan, reducing the interest charged and the length of your loan term effectively. Some lenders may limit the total amount added to be repaid within a certain period, and there may be no repayment or fixed-rate home loans.
For specific periods, many lenders offer either full or partial repayment holidays. During that time, you do not have to pay home loans, but generally, you still have interest on the balance of your home loans. If you want to increase your home loan repayments, you may have to pay additional payments in advance, a lump sum in return.
The parental leave feature enables you to reduce or defer repayments for an agreed period after your child is born or adopted. In general, interest is still charged on your home loan during this period, and a fee may apply.
Home loan offset account/salary credit.
An offset account is a savings account connected to your home loan.
It works through either:
Subtract your balance from the outstanding home loan principal when the daily interest charges are calculated. For instance, if you have a $300,000 mortgage and a $20,000 offset savings account, you only charge $280,000 interest, even if your loan balance is $300,000.
Apply your home loan balance to the interest earned on your account. The tax rate is taxable, but the same interest you are paying in your savings account is not, so you definitely save tax and simultaneously reduce your home loan.
Look for lenders with 100% offset. Note also that some lenders require that you have a minimum balance in your account before offset. Your BuildME Mortgage specialist will ensure that you maximize your savings by setting up the right account.
Wage credit works similarly by enabling you to pay your wages directly into your home loan account. You will then redeem money as you need it to pay daily expenses. This effectively reduces the amount of principal owing when your salary is on the account with interest calculated every day, reducing the amount of interest paid.
Loan portability enables you to transfer your outstanding home loan without the need to refinance from your current property to a new property. This can save you money on requests and legal fees.