FIND OUT HOW MUCH YOU CAN BORROW

The information provided by the calculator is intended to provide illustrative examples based on the stated assumptions of your input.

Results are guides only and do not constitute financial advice or any guarantee that you will be approved for a loan by a lender.

You should always discuss your individual circumstances with a representative of Key Choice Group before placing your deposit or purchasing any property.

Not sure what kind of loan you need for your current financial circumstances?

That’s our job. We deliver tailored finance solutions chosen from a panel of leading lenders, and give you peace of mind that your loan is working for you.

Contact us today to find out all the ways we can help you.

Frequently Asked Questions (FAQs) about Buying a Home

Is it Better to Buy a Home?

Check out this information:

 

Advantages

You can make your home your castle

When you purchase your own home, you have the freedom to paint, renovate and landscape at any time without needing to ask permission from your landlord or being concerned about breaching a rental agreement.

 

It could help build your wealth

Depending on your property and the market in your local area, it may increase in value over the long-term, at a rate greater than inflation. Choosing your home location is important if you want to make financial decisions in the future to sell it.

 

A mortgage is a form of enforced savings

Having the financial discipline of making regular mortgage repayments is one way to force you to save money by putting it into your home loan instead of spending it. Just have a financial sheet to monitor it.

 

Buying gives you reasonable certainty about repayments

While interest rates do tend to go up and down, a mortgage still gives you some certainty and the ability to have financial budget for repayments.

On the other hand, a variable rate home loan may vary as your bank can change the interest rate on your loan at any time.

This may mean that your repayments are just as unpredictable as rental costs which can fluctuate as a result of high demand

It gives you greater certainty of tenure

Choosing and owning your own home can also give you more of a sense of security than renting. Living in your own place means that you are not at risk of having to move due to a rental agreement finishing or your rent becoming unaffordable.

 

Disadvantages

On the other hand, there can also be some potential financial downsides to choosing to purchase a property rather than renting. For example:

 

Missed repayments could equal repossession

Arguably the most significant disadvantage of choosing and buying a home and having a mortgage to repay is the possibility of repossession if you fail to make repayments. Generally, your lender will send you a default notice which allows you 30 days to catch up on missed repayments. However, if you are still behind after the notice expires, your lender can start legal action to repossess your home and sell it to cover your loan.

 

A large up-front cost is required

One of the biggest financial obstacles faced by potential home buyers in Australia is saving up the amount required for a home deposit.

The deposit required to purchase a home will vary depending on the lender and your circumstances. For example, some loans require the borrower to have a deposit of at least 20% deposit of the property’s value.

However, if you are eligible for the Federal Government’s First Home Loan Deposit Scheme or willing to pay lender’s mortgage insurance (LMI), the deposit required may be reduced. You shouldn’t miss this package.

 

Ongoing costs like maintenance and repairs

As a homeowner, there are a number of ongoing expenses such as general maintenance, repairs and council rates that may otherwise be covered by your landlord if you were renting.

Make sure to have a monitoring sheet of your regular maintenance expenses.

 

Your home may decrease in value

Although choosing and owning a house is generally considered a solid investment in the long run, there is the possibility that your property may decrease in value or remain the same, depending on your property and the overall strength of the market.

What is a Home Loan or Mortgage?

Taking out a mortgage is a fundamental part of life for many Australian households. Most of us can’t afford the steep purchase price of a nice home up front, so we take out a large loan which we can then pay off over a long timeframe.

 

A home loan, or mortgage, is a loan advanced to you by a lender in order for you to buy a property. The home loan is secured against your property, so if you can’t continue to pay the loan, your lender may require you to sell the property to settle the debt.

 

Typically, a home loan will be over a 25 or 30-year loan term, with regular repayment amounts that you pay fortnightly or monthly to pay off the loan over the contracted term.

 

To find out exactly how much you can afford to borrow on a home loan, use our handy home loan borrowing calculator above. We also suggest for you to have a sheet to take down important details.

 

What do home loans cost?

The total amount you will pay on a home loan consists of three key things: 

The principal (the amount borrowed), the interest the bank charges you and all applicable fees and charges.

To find out how much your mortgage will cost each month, check out our calculator where we will show key data for you.


Check out this information:

 

Interest rates

Home loan interest rates can vary significantly between home loan providers. Due to mortgages being very long-term loans, even small differences in interest rates can make a big difference to the total amount you will pay – so it’s important to negotiate a low-interest rate. There are two types of interest rates that home loan lenders will advertise:

  1. Interest rate: The interest rate is just the base rate of interest at which your bank will charge you. Your bank will multiply this percentage by your remaining home loan principal to determine how much you’ll need to pay in pure interest costs each month.
  2. Comparison rate (APR): The comparison rate includes the interest rate, payments, and most ongoing and upfront fees and charges in one rate reflecting the total annual cost of the loan, reduced to a single figure. On the Canstar website, all comparison rates for home loans are based on a $150,000 loan over 25 years.

Home loan interest rates can be either fixed or variable, each of which has several advantages and disadvantages that you can read more about here.

 

Fees

There are many home loan fees you should know about before buying – some lenders can charge more than others. Some of the more common and key fees to remember are:

  • Account-keeping fee: An account-keeping fee is a fee charged by lenders (usually monthly) to help cover the administration cost of maintaining the loan. It may be called a “service fee”. Some lenders charge an account-keeping fee instead of an annual fee. If you have an offset account on your loan, there may be an account-keeping fee charged on this account.
  • Annual fee: Some lenders charge an annual fee rather than an ongoing account-keeping fee on certain mortgages. These may be a “package loan” where a number of deposit and credit accounts are “packaged” up with your home loan under one administrative cost.
  • Redraw fees: If your home loan has a redraw facility (an agreement whereby you are able to redraw some or all of any home loan payments in advance) there may be a fee associated with doing so.
  • Application fee: Some lenders will charge you a fee for processing, or helping you through, your mortgage application.

There are several other types of fee out there, which vary depending on which provider you choose.

What are each Type of Home Loan?

There are several different types of home loans which are suited to different people in different key circumstances:

Check out this information:


Fixed rate home loans

A fixed rate loan simply means that the interest rate is “fixed” for a certain amount of time – commonly between 1 year to 5 years.

The main advantage of a fixed rate loan is that it gives you certainty of repayments over the fixed term. The interest rate is guaranteed not to go up (or down) over the fixed period, so you know exactly how much you’ll be repaying each month and can budget accordingly.

The main disadvantage of a fixed rate loan is the inflexibility. Generally, large additional payments cannot be made, and you may face a break fee if you decide to refinance your loan or sell the property before the end of the fixed term. With that said, the fixed rates on home loans are historically low in 2017 due to Australia’s record low official cash rate, making it a good time to look for a fixed home loan.

Variable rate home loans

A variable rate loan means that the interest rate will rise and fall with the market over the period of your home loan. This may be in response to movements in the official cash rate or may simply be a business decision by your financial institution.

The main advantage of a variable rate loan is flexibility. While you must meet your minimum monthly repayment, you can usually pay more if you want to. There is also no cost penalty if you decide to sell your property and move.

The main disadvantage of a variable rate loan is that your minimum repayment amount may rise or fall at any time. This makes it hard to plan and predict your repayments, which can be a real problem for those who are on a tight budget.
 

Split home loans

A split loan is simply a combination mortgage whereby part of your home loan is on a fixed rate and part is on a variable rate. A split loan can be a good middle ground between a variable rate and a fixed rate home loan, providing both the flexibility of the former and the security of the latter.

When contemplating a split home loan, your biggest consideration should be how long you intend to stay in the home. If the intention is to stay only for a short while, a variable loan is more flexible and doesn’t entail “break fees”. On the other hand, if the intention is to live in the home long-term, a fixed rate may offer the certainty of repayments the borrower is looking for.
 

Interest-only home loans

An interest-only home loan is one where only the interest is paid, rather than both the interest and the principal. This type of loan can be useful for investors who can claim the interest as a tax deduction, or buyers who only plan on holding onto the property for a few years before selling it.

Interest-only home loans may not be a good idea for the average home buyer who is simply looking to pay less on their weekly repayments. The smaller the amount of loan principal that is repaid, the more overall interest you end up paying on your loan over the years. Generally, an interest-only home loan will have a short time frame (between 1 to 5 years) before it reverts to a principal and interest loan anyway.
 

Line of credit home loans

A line of credit is a loan borrowed against the equity in your home. It gives you the ability and flexibility to access the loan at any time, up to the agreed limit, and to pay money into the loan at any time. It is not generally a loan set up to purchase a property, but rather set up against the equity in an existing property.

Make sure to check our Loan Calculator above.

How Accurate is the Calculator Above?

Results are guides only and do not constitute financial advice or any guarantee that you will be approved for a loan by a lender.

 

 

Do You Have a Business or Car Loan Calculator?

Currently we don’t have a car loan or corporate calculator online.

However, that our mortgage calculator and interest calculator available on this page are accurate enough compared to banking calculators offered online.

Feel free to contact us here so that we could support you.

What are the repayments? How Does Repayments Work?

Check out this sample information:

We’ll start with a loan amount of $500,000, and an annual interest rate of 4.5%. According to these pre-sets, your monthly repayments will be $2,533.43. With a loan term of 30 years, your total loan repayments will work out to be $912,033.56.

Feel free to call us for more information. 

Where should I call for urgent loan concerns?

We are always open to help you out. Reach out to us online here: https://kcgmortgage.com.au/contact-us/

Feel free to call us for more information. 

What is The First Home Owners Grant?

The first home owners grant is a government grant developed to assist eligible first home owners to purchase a new home or build their home by offering a grant.

How Do I Apply for The First Home Owners Grant?

Applying for the First Home Owner Grant should be done at the same time as applying for your home loan. Our affiliated brokers will help with the application. You can also request an application from the office of state revenue directly.

Feel free to call us for more information. 

How Much is this First Home Owner Grant?

Each state has different rules and pays different grant amounts. The grant can vary from $5,000 in some states to $20,000 in others. In NSW, first home buyers purchasing a brand new first home will receive $10,000 first home owners grant up to a cost price of $750,000. States now require the property you purchase to be “brand new” to qualify for the first home owners grant.

If my partner & I are both eligible for the first home owners grant, do we get it twice?

No. When putting through an application, only one person in the application can be granted the FHOG. You also must make sure your partner hasn’t previously used or received the grant in Australia, as it may be denied.

Can I Still Get a Loan with a Poor Credit History

Eligibility for a home loan depends on many things, which includes your credit score. Your credit score is calculated by an assessment of how risky or trustworthy you are to possible lenders in regards to paying your loan back.

Everyone’s situation is different, and there are some lenders that will consider poor credit rating, defaults and even discharged bankrupt. Reach out to us if your credit history is of concern to you regarding a new home loan.

What is a Contract For Sale?

The contract of sale is a legally binding document with the information that you sign by you as you apply and the vendor (seller). This contract sets out the terms and conditions of the sale, as agreed to by you and the vendor.

While the contract of sale becomes a legally binding document the moment you sign it, there may be a cooling-off period during which you can cancel the sale if you bought the property by private sale.

This is generally negotiated before you sign the contract of sale. The cooling-off period does not apply to auctions.

If you need more information, feel free to contact us.

 

What is the difference of a Broker for Mortgage and a Bank Lender?

While banks and other lenders often have their own lending specialist, you may find that they can only provide financial advice on their own products.

A mortgage broker on the other hand has over 30 different lenders and will do the legwork comparing one lender against another giving you the best outcome as you apply. This will also save you time allowing you to other important things like finding your dream home without taking for granted your financial status.

Choosing a lender made easy by a broker.

 

How Much Will I need for a Deposit and is there an Interest already?

Regarding the payment, most lenders will usually require you to have a minimum 5% deposit paid of the purchase price plus a little extra to cover other costs such as stamp duty, legal fees and lender’s fees.

Now lenders have changed the required minimum deposit depending on other factors such as if it’s an investment purchase and where the property is located.

Using a loan calculator, mortgage calculator or an interest calculator is just an initial step. 

With constant changes with bank requirements, it is important to speak to a broker to work out what you really need.

This way, your financial status will be assessed and you will have a comprehensive credit package guide to help you on your mortgage banking transactions, interest concerns, and other information you need.

Feel free to contact us online.

 

 

 

 

When Does Settlement Take Place After I Put a Deposit Down?

The settlement date is usually listed on the contract of sale and this period varies by state and territory.

This is important because there are different penalties if you do not settled by the agreed date, so make sure you check this before exchanging contracts. When the agreed settlement date arrives, you can pick up the keys to your new place!

As you apply, make sure to ask about this from your broker or any banking institution

 

What You Need to Consider When Buying a Property?

As you apply for the First Home Owner Grant should be done at the same time as applying for your home loan.

Our affiliated lenders will help with the application package.

You can also request an application online from the office of state revenue directly.

What is a Loan Comparison Rate?

Applying for the First Home Owner Grant should be done at the same time as applying for your home loan.

Our affiliated lenders and banking institutions will help with the application. You can also request an online application from the office of state revenue directly.

What are the upfront Loan costs in buying a home?

In addition to mortgage repayments, you need to be aware of the upfront costs involved in buying a home. This will save your from any financial concerns along the process of choosing the best loan package.

These upfront costs include:

Stamp duty/transfer duty

This is a state tax on all home purchases, based on the property price, location and type of home loan you have. This will be a one-off payment that you need to factor into your budget.

Legal and conveyancing fees

A conveyancer or solicitor will help you meet all legal requirements involved with purchasing your home. They’ll handle most of the paperwork and can answer any questions you may have about the process and explain the terms and conditions of the contract. Depending on complexity, it’ll cost between $700-$2500.

Removal and cleaning costs

You need to budget for the cost of moving all your belongings to the new property. Get quotes from a few different removal companies or hire a truck or trailer and ask friends to help you move to reduce costs.

House inspections

Once you’ve decided on a property, it’s a good idea to get a qualified building inspector to assess it for structural integrity, safe electrical fittings, and future maintenance costs. You should also get a pest inspection to ensure the property doesn’t have a termite problem or other pest issues. These checks will help to give you peace of mind and could save you a lot of money in the future.

Connecting Gas, Electricity, and Phone Lines

Try and negotiate with the vendor so the power stays on and you’re not hit with reconnection fees.

Home Insurance

Protecting your home every year against damage or loss is really important. Home insurance (also called building insurance) covers the cost of rebuilding or repairing your home and helps protect you against things that are out of your control, such as damage from natural disasters like storms, floods, and bushfires. Apply for one to ensure your home’s future.

What is a cooling-off period?

After the contracts have been exchanged, a provision called the cooling-off period allows the buyer to have a change of heart and cancel the contract. During this period, the seller is forbidden from selling the property to another buyer.

When you buy a residential property in NSW, you have a five business-day cooling-off period after you exchange contracts. The cooling-off period starts as soon as you exchange and ends at 5pm on the fifth business day after exchange. During this period, you may get out of the contract as long as you give written notice.

A cooling-off period does not apply if you buy a property at auction or exchange contracts on the same day as the auction after it is passed in.

You can waive the cooling-off period by giving the vendor a ‘66W certificate’. It is also possible to reduce or extend the cooling-off period by written agreement with the vendor.

If you use your cooling-off rights and withdraw from the contract during the five business-day period, you will have to pay the vendor 0.25 percent of the purchase price. This works out to be $250 for every $100,000.

What is Superannuation?

Super annuation, also known as ‘super’, is a way of saving money while you are working, so that you will have money when you retire.

While you are working, your employer puts away a percentage of your salary each pay, to make sure you have money to live on in the future. Read more below to learn more about Super.

How super annuation works

If you are over age 18 (or under 18 and working more than 30 hours per week), and earn more than $450 a month, your employer is required by law to pay 9.5% of your salary into your super fund – this is called a Superannuation Guarantee (SG) contribution.

Some employers, including the Queensland Government, may also make extra contributions to your super so check with your payroll office to see if this applies to you.

Once your super fund receives your SG contribution, they look after your money for you until you are ready to retire. You can also add extra money to your super on top of what your employer pays – and potentially pay less tax as well – so you’ll have even more money in your super account when you retire.

How to choose a super fund

Most people can choose which super annuation fund they want their money paid into. If you don’t tell your employer where to pay your super, they’ll pay it into their default fund.

Choosing a super fund is an important decision. How your fund performs over the long term, fees, investment choice, and insurance options are just some of the things to consider when finding the best super fund in Australia.

When you can access your superannuation

As super is there for you to spend once you stop working, there are rules around when you can access it. Generally:

  • If you’re age 65 or over, you can access your super, even if you’re still working1
  • If you’re age 60 to 64, you can access your super as long as you’re retired.

Other rules apply if you are under age 60 and born before 1 July 1964.There are also some situations where you can apply to access your super early such as if you are a temporary resident who has left Australia.How to choose a super fundMost people can choose which superannuation fund they want their money paid into. If you don’t tell your employer where to pay your super, they’ll pay it into their default fund.Choosing a super fund is an important decision. How your fund performs over the long term, fees, investment choice, and insurance options are just some of the things to consider when finding the best super fund in Australia.

 

What is a maturity date?

Maturity is the date that your fixed term expires and your money is available for reinvestment or withdrawal.

What Is Lenders' Mortgage Insurance?

Lenders’ Mortgage Insurance, or LMI, is insurance that protects the lender, not you. It’s usually a one-off payment made by the borrower at the time of loan settlement.

Here are the facts about LMI

Lender’s Mortgage Insurance is a type of insurance you can expect to pay if you borrow more than 80% of your home’s value.

Lender’s Mortgage Insurance protects the lender – not the borrower.

You don’t need to arrange Lender’s Mortgage Insurance yourself – your lender will sort it for you.

It’s possible to save on Lender’s Mortgage Insurance by saving a bigger deposit.

How much is Lenders' Mortgage Insurance?

This depends on where you borrow, your lender and the size of your deposit. Your broker can show how to calculate Mortgage Insurance for your circumstances.

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