Check Your Home Loan Interest Rate

Official Rates on hold, but banks may increase your rate.

The RBA have done the sensible thing and left rates alone. We are walking a bit of a tight rope as far as the economy is concerned, so any dramatic shift may wobble the rope and cause a catastrophic fall in all markets. Housing included!

Explore Refinance To Flexible Home Loan Products

My feeling is that you may be better placed if your home loan is very flexible. I would consider an interest only option for at least part of your loan, as meeting this payment might be easier if economic doom hits and survival becomes key.

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Interest Rates On Hold September 2014

The Reserve Bank of Australia has today announced the outcome of its eighth board meeting of the year, a decision anticipated by most industry experts. In the minutes from its last meeting the Reserve Bank forecast that the most prudent course was likely to be a continued period of stability in interest rates and in spite of an increase in unemployment has chosen to stick to this course for the time being.

As a result, the RBA announced it was again leaving the cash rate unchanged, at 2.5%. The rate has now remained unchanged at this record low for thirteen consecutive months. Best Rate Home Loan

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Why You Need Mortgage Statement Checking Software

Top three reasons to use mortgage checking software

Mortgage checker software will help you check and audit your home loan statements for errors. Including interest calculations, excess loan fees and the overall accuracy of your loan calculations. Clerical errors can happen at any time over the life of your loan, and if left undetected, even the very smallest of errors can with compound interest, add thousands of dollars to your loan balance.

Mortgage checker software will help you track your repayments, calculate the impact on your repayments due to rate rises, and show you how to save thousands by paying off your loan sooner.

Mortgage checker software summary reports will show you the true cost of your loan, broken down by interest charges, fees, deposits and withdrawals.


Bank Errors Exposed And Refunded

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Interest Rate Table

Historical Interest Rate For Standard Variable Home Loans 2010 to 2017

Troubled by who to trust with your Home Loan enquiry?

Date Rate Date Rate Date Rate
Jan 2010 5.55 Aug 2011 7.79 Mar 2013 6.40
Feb 2010 5.74 Sept 2011 7.79 Apr 2013 6.40
Mar 2010 5.99 Oct 2011 7.79 May 2013 6.15
Apr 2010 6.24 Nov 2011 7.79 June 2013 6.15
May 2010 6.65 Dec 2011 7.54 July 2013 6.15
June 2010 6.65 Jan 2012 7.30 Aug 2013 5.53
July 2010 6.65 Feb 2012 7.30 Sept 2013 5.53
Aug 2010 6.91 Mar 2012 7.36 Oct 2013 5.53
Sept 2010 7.16 Apr 2012 7.36 Nov 2013 5.53
Oct 2010 7.40 May 2012 6.99 Dec 2013 5.53
Nov 2010 7.40 June 2012 6.99 Jan 2014 5.53
Dec 2010 7.79 July 2012 6.99 Feb 2014 5.53
Jan 2011 7.79 Aug 2012 6.99 Mar 2014 5.53
Feb 2011 7.79 Sept 2012 6.99 Apr 2014 5.53
Mar 2011 7.79 Oct 2012 6.60 May 2014 5.53
Apr 2011 7.79 Nov 2012 6.60 June 2014 5.53
May 2011 7.79 Dec 2012 6.40 July 2014 5.53
June 2011 7.79 Jan 2013 6.40 Aug 2014 5.53
July 2011 7.79 Feb 2013 6.40 Sept 2014  5.53
Date Rate Date Rate Date Rate
Oct 2014 5.53 May 2016  5.35 Dec 2017
Nov 2014 5.53 Jun 2016  5.35 Jan 2018
Dec 2014 5.53 Jul 2016  5.35 Feb 2018
Jan 2015 5.53 Aug 2016  5.35 Mar 2018
Feb 2015 5.45 Sep 2016  5.35 Apr 2018
Mar 2015 5.45 Oct 2016  5.09 May 2018
Apr 2015 5.45 Nov 2016  5.09 Jun 2018
May 2015 5.35 Dec 2016  5.09 Jul 2018
Jun 2015 5.35 Jan 2017  5.09 Aug 2018
Jul 2015 5.35 Feb 2017 5.09 Sept 2018
Aug 2015 5.35 Mar 2017  5.09 Oct 2018
Sep 2015 5.35 Apr 2017  5.19 Nov 2018
Oct 2015  5.35 May 2017  5.19 Dec 2018
Nov 2015  5.35 Jun 2017  5.19 Jan 2019
Dec 2015  5.35 Jul 2017  5.19 Feb 2019
Jan 2016  5.35 Aug 2017  5.19 Mar 2019
Feb 2016 5.35 Sept 2017  5.19 Apr 2019
Mar 2016 5.35 Oct 2017  5.19 May 2019
Apr 2016 5.35 Nov 2017  5.19 Jun 2019

Source Reserve Bank of Australia
Best Rate Home Loan

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Things Needed When You Apply For A Home Loan

Apply For A Home Loan

Take a little time to prepare and you can make the home loan process very easy. Here are a few issues you can expect to encounter when you apply for a home loan

ID check

You will need to provide photographic proof of identity – your driver’s licence, passport or proof of age card will suffice. You will also need secondary documentation, such as a Medicare card, rates notice or utility bills that are no more than three months old. This will apply to all applicants to a loan, including guarantors. Provide as much as you can, overkill will not be a bad thing in this area.

Income & Expenses

In their need to determine your borrowing capacity, banks and other lenders will request documents outlining your financial situation when you apply for a home loan. This may include pay-slips, bank statements and written references from your current employer. Make a list of your monthly outgoings. Your list should include everything from rent, utility bills and travel expenses to gym memberships and leisure activities. If you pay an account annually or quarterly, break it down to a monthly figure for your list.

Assets and Liabilities

Make a list and be prepared to disclose the value of everything you own and any outstanding debts you have at the time of home loan application. Collect or order 12 months worth of bank statements, including the most recent. Bank statements will include current home loan, personal loan, credit cards, store cards, savings accounts, term deposits and online savers.

Start a file

Whether you are applying for your first or tenth loan, being organized will stop you from being overwhelmed. Use the headings from my article for your file. (They are generic for all lenders.) While you may encounter some troubles along the way, coming prepared when applying for a home loan can make the whole process run a lot smoother.

About Bank Statements

Some recent experience has led me to add this little gem. It seems that some lending institution employees are fixated about bank statements. To the extent that some loan applications are being rejected if the client cannot supply all recent and consecutive statements on bank or credit union letter head. The problem for most of us now is that we get electronic statements that do not have institution details on the them. My advice now for everyone who thinks they may need to access some lending in the future is to go back to paper statements and store them in an old fashion file. Alternatively find a bank that supplies proper statements online.

Please check out my other information about home loans in Australia.

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Refinance Mortgage

Refinance Mortgage To Free Up Cash Flow

Lower interest rates give us a great opportunity to find a better home loan mortgage. The competition among the lenders will intensify over the next six months, as they all look to lock in customers for the next two to five years. The lenders are worried that property prices may decrease if the world economy slips back into recession and want to sure up the quality of their loan books. This is bad news for first home buyers trying to go it alone, but great news for home owners looking at mortgage refinance options and those first home buyers with parents that can go guarantor or supply a gift for a deposit.

Refinance Mortgage Deals

I predict that their will be some good deals to be done for those with equity. Look for an offer that gives you a zero application fee and access to the lowest rate, a 100% offset account and a low annual fee. Pay attention to the advertised CCR rate to check for hidden fees. If the rates get a further chop on Melbourne Cup Day, there may well be some very good three and five year fixed rates on offer as well as very skinny variable rates  for those with good lending potential.

Check Your Current Loan For Errors Before You Refinance Mortgage

Using software to check for mistakes on your mortgage statements is not a new idea, but it is a good one. The facts are that lenders make errors, and if you have a big loan, the errors can be very big, usually several times the amount you will pay for your software. Even if you don’t find a fee or interest error, you at least will have some peace of mind knowing you have not been cheated. Refinance for the right reasons, and check your statements.



Loan Statement Checker

The best place to start your home loan search

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Tax Rates 2012-2013

Australian Tax Rates 2012-2013

The Australian adjusted basic tax rates 2012-2013 will be as follows:

Taxable income.             Tax on this income

0 – $18,200                     Nil

$18,201 – $37,000          19c for each $1 over $18,200

$37,001 – $80,000         $3,572 plus 32.5c for each $1 over $37,000

$80,001 – $180,000       $17,547 plus 37c for each $1 over $80,000

$180,001 and over          $54,547 plus 45c for each $1 over $180,000

The above rates are taken from the Australian Tax Office website. You can visit and see the original here.

Tax Rates 2012-2013 Winners

Many young people and part-time workers will benefit from the increase in the threshold with more money in their pocket. This increased cash-flow should be a stimulus for retail sales and other consumer spending.

Unfortunately, the education rebate has been replaced, meaning a lot of kids are not getting an ipad this year.

The above figures do not include Medicare Levy, Medicare Levy Surcharge or any Low Income Tax Offset effect.

Medicare Levy and Medicare Surcharge are applied on an incemental basis, but you may qualify for a reduction or exemption depending on your circumstance. The tax office info is here.

The Low Income Tax Offset (REBATE) maximum is now $445 for 2012-2013, reducing by 1.5 cents in the dollar, for every dollar of income over $37,000 such that it cuts out at $66,667. The effect is that no tax is payable up to an income of $20,542. More here.

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Interest Rate News

Latest Interest Rate News

The Reserve Bank has handed borrowers and the struggling non-mining sector some relief, shaving interest rates by 50 basis points in a surprise move.

At its May meeting the board of the central bank cut the cash rate to 3.75 per cent, its lowest level since December 2009.

Australia’s annual inflation rate has fallen sharply to 1.6 per cent, down from 3.1 per cent a year ago, and well below the Reserve bank’s target range of 2 to 3 per cent.

The RBA had indicated after its April board meeting that it could ease the cash rate this month if the inflation figures were weak.

Attention will now turn to whether the commercial banks will pass on some or all of the cut.

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Rates On Hold

The Reserve Bank of Australia has decided to keep the official cash rate unchanged. The Board decided to leave the cash rate at 4.25 per cent for the third consecutive month. The decision was largely expected, with most economists now expecting rates to stay on hold until mid-year.

In March the RBA kept rates on hold, however most of the major banks moved rates, so it will be interesting to see what happens in April. Over the next few days we will find out which lenders will adjust rates.

My take is that, banks and other major lenders have now entered a competition cycle and they will all be trying win more business. Look out for good deals on the fixed interest side and also the application fee.

 

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Savings and Loans Terms

Common terms relating to Savings and Loans mortgages

There are many words that are specific to home buyers, sellers and lenders. This list explains words you will hear or read when looking into home ownership and home loans with Savings and Loans and any other lender.

Agent – An agent is someone who acts on behalf of another person or organisation. A real estate agent acts on behalf of a landlord or owner in the letting or sale of property.

Application fees – Fees charged to cover the lender’s internal costs of setting up a loan.

Appraisal – A considered estimate of the value of the property being used as security for a loan by a qualified valuer.

Arrears – Some times referred to as loan arrears, is the amount you are behind in your loan payments.

Body corporate – The owners of units within a strata titled building who are responsible for the management of the building and common areas.

Breach of contract – Breaking the conditions of a contract.

Bridging Finance – A loan obtained over a short period before longer term finance is obtained. Most home buyers use bridging finance, if they need money to fund the purchase of a new house while they are waiting for their existing house to sell.

Building inspection – A check for structural soundness of a building. It is a good idea to make your property purchase subject to a satisfactory building inspection.

Capital gain – The money you make when you sell an asset, like property, for more than you paid for it, less your expenses.

Capital gains tax – A Government tax on the gain made on the sale of an asset (excluding your own residence) bought and sold after September 1985.

Caveat – A caveat is a legal notice lodged with the land titles office that indicates that another party other than the owner claims some right over or interest in the property.

Certificate of Title – Is a document identifying the historical ownership of land. It shows who owns the land and whether there are any mortgages or other restrictions on it. The certificate of title is usually held by the lender as security for a loan.

Chattels – Chattels are personal property, such as clothing, appliances and furniture. Chattels include movable possessions which may be included in the sale (e.g. furniture).

Clear title – A seller has a clear title when there are no restrictions (such as an outstanding mortgage) preventing the sale, and when the seller’s ownership of the property has been established.

Commission – Is the fee or payment made to real estate agents or Solicitors for their services.

Comparison Rate – A comparison rate is a figure to help consumers identify the true cost of a loan. By legislation it is a rate which includes both the interest rate and fees and charges relating to a loan, reduced to a single percentage figure.

Contract of Sale – A written agreement outlining the terms and conditions for the purchase or sale of property.

Conveyance – The transfer of ownership of property from the seller’s or current owners name to the buyer’s name.

Conveyancing – The legal process for the transfer of ownership of real estate. Usually performed by a solicitor or land broker.

Covenant – Terms and conditions imposed by the local council or body corporate that specify the actual allowable application of use of a block of land or a building.

Credit – The money or other finance to be paid back under an arrangement to a lender.

Credit limit – The maximum amount that may be borrowed under a financial arrangement with a lender.

Creditor – A party or lender to whom money is owed.

Debtor – Someone who owes money to someone else.

Deed – A legal document that states an agreement.

Default – Not following the terms of a mortgage or loan agreement, that may result in a breach of loan conditions and fore closer. A failure to make loan payments (defaulting on the loan) may result in the mortgage holder taking legal action to repossess the mortgaged property (that is, evict the occupants and sell the property).

Deposit – An amount of money normally paid by the buyer at the time of exchanging contracts.

Disbursements – During the conveyancing process,fees and charges may be incurred. These fees are recorded by the solicitor or land broker on your transfer paper work.

Discharge of Mortgage – A process of paying out a loan. For example if you are changing lenders, your old lender will discharge their mortgage, when your new lender pays them.

Disposable income – Your income left over after all known bills (e.g. loan payments, credit card, car costs) have been met .

Draw down – Usually referred to as the amount paid during construction loan as the building reaches different stages of its build. It can also apply to lines of credit where a limit is set and the borrower can draw the funds as required.

Duty (Transfer or Stamp Duty) – A State Government tax on financial transactions. For the purchase of real estate, may be calculated according to the property value.

Easement – A parcel of a property that cannot usually be built on. A right to use a part of land which is owned by another person or organisation (e.g. for access to another property).

Encumbrance – A mortgage or some other outstanding liability on a property. Can also mean building restrictions imposed by a developer.

Equity – A property owner’s financial interest in their property. The difference between the purchase price and cost of improvements and purchase fees and the amount of any mortgage outstanding at anytime.

Establishment fees – Fees payable to a lender, supposedly to cover the costs of setting up a mortgage.

Exit/prepayment fees – Penalties charged by the lender when a loan is paid off before the end of its term. Exit fees generally apply to fixed interest rate loans.

First Home Owners Grant – The First Home Owners Grant is a lump sum payment available from the Australian Government as compensation for the increased cost of housing due to the Goods and Services Tax (GST). There may be additional grants available in each state.

Fittings – Items not intended to be removed from a property on sale (e.g. fixed carpets, lights, curtains, stoves).

Fixtures – Can mean many things, but generally mean things like sheds, fences, pergola’s etc and a house or building.

Freehold – Ownership of a dwelling and the land it stands on.

Guarantee – A contract to pay a third parties debt should they default.

Guarantor – The mug who agrees to be responsible for the payment of another party’s debts should that party default.

Inclusions – Contractural term regarding items included with the sale of property (e.g. light fittings, stove).

Installment – The regular payment that a borrower agrees to make to the lender.

Interest – The fee charged for borrowing money, calculated over a year. Interest is usually paid to the lender in installments along with repayment of the principal loan amount.

Interest only loan – A loan where the principal is paid back at the end of the term and only interest is paid during the term. The loans are usually for a short term of one to five years.

Introductory loan rate – The interest rate on a loan that is discounted from the standard rate to attract new borrowers. Also called a discounted or honeymoon rate.

Investment property – A property purchased for the purpose of earning a return on the investment, either in the form of rent or capital gain.

Joint tenants – Equal holding of a property between two or more persons. If one party dies, their share passes to the survivor/s.

Lease – A document granting a period of tenancy of a property under specific terms and conditions.

Line of credit – A flexible loan arrangement with a specified limit to be used at a customer’s discretion. (Similar to a credit card limit but at a better rate.)

Loan-to-value ratio (LVR) – The ratio of the loan to the value of a property, usually expressed as a percentage. For example, the loan-to-value ratio of a loan for $90,000 on a home which is valued at $100,000 is 90%.

Maturity – The date in the future at which a mortgage must be paid out. (Usually 25 or 30 years)

Maximum loan amount – A bit like a limit. The maximum amount that can be borrowed based on an applicants’ disposable income, deposit, and the purchase price of a property.

Mortgage – A legal document in which a borrower gives a lender security over a property and enforcement rights against the property to recover a loan.

Mortgage broker – A person or organisation offering to organise or broker loans from a group of lenders.

Mortgage comparison rate – Also known as the true rate or Average Annual Percentage Rate. Used to compare the actual interest rate of a loan taking into account all fees and charges.

Mortgage discharge fee – An administration fee to cover the costs incurred in finalise a mortgage.

Mortgage insurance (LMI) – This insurance is taken out by the lender to cover themselves in the event that a borrower defaults on a loan and the sale of the property is unable to cover the outstanding debt. Mortgage insurance premiums are usually paid by the borrower when the amount borrowed is over 80% of the property value. This contains no protection for the borrower.

Mortgage offset account – An account run in conjunction with a home loan. The balance of the account reduces the interest paid on the loan. A 100% offset is where the interest rates earned and paid are the same. A partial offset account is where the interest rate earned on the offset account is only a portion of the rate paid on the home loan.

Mortgage originator – A person who organises a loan from another source (e.g. a mortgage trust fund).

Mortgage payment – A regularly scheduled payment that usually includes both principal and interest.

Mortgage protection insurance – Insurance taken out by a borrower to cover loan repayments in the event that the borrower is not able to meet them through specific events such as serious illness or redundancy. It can also be called income protection insurance. This insurance is not the same as (lender’s) mortgage insurance.

Mortgage registration fee – A State Government charge for the registration of a loan.

Mortgagee – The lender institution or person(s) who lends money to buy property (e.g. banks, credit unions).

Mortgagor – The person(s) who borrows money to buy property.

National Consumer Credit Code – national legislation covering the licensing and activities of mortgage lenders.

Prepayment/exit fees – Penalties charged by the lender when a loan is paid off before the end of its term. Exit fees generally apply to fixed interest rate loans.

Prepayment – Any amount paid to reduce the principal balance of the loan before the due date or any amount in addition to the minimum repayment.

Prepayment penalty – A fee that may be charged to a borrower who pays off or reduces the amount of a loan before its due date.

Principal – The original loan, or that part of it still owing to a lender.

Principal and interest loan – A loan in which both the principal and interest are repaid during the term of the loan.

Redraw facility – A loan facility whereby you can make extra repayments on your loan and later get back these extra amounts when necessary. There will often be limitations as to how much can be withdrawn and for what purpose.

Refinance – To arrange for a new mortgage, sometimes with a different lender.

Savings and Loans – A great place to get a home loan.

Searches – Examinations or research tasks usually carried out by solicitors on the purchaser’s and lender’s behalf to confirm information about the property or the purchaser, prior to settlement.

Security – An asset that guarantees the lender the value of the loan until the loan is repaid in full. Usually the property is offered to secure the loan by way of a mortgage.

Settlement date – Date on which the property officially changes hands.

Strata title – This title gives you ownership of a unit of a larger building as opposed to a separate house. It also entitles you to membership of the body corporate.

Tenants in common – The equal or unequal holding of property by two or more persons. If one party dies, their share passes according to their will or the law (not necessarily to the property’s other share owner).

Title – See Certificate of Title.

Title fees – Payable to the Titles Office for title search, transfer of property ownership, registration of a new mortgage and discharge of an old mortgage.

Title search – Process to ensure that the seller has the right to sell and transfer ownership.

Transfer – A document registered with the Titles Office that confirms the change of ownership as noted on the Certificate of Title.

Unencumbered – A property free of liabilities, encumbrances or restrictions.

Valuation – A report detailing a professional opinion of the property’s value. Usually required by the lender.

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