This article presents a case study on how HECS-HELP loans may impact a home loan application, and strategies people can take to minimise its impact/maximise their loan amount.

For many Australians, particularly young Australians, the dream of home ownership is often accompanied by the reality of carrying student loans, known as HECS-HELP debt. Understanding the impact of HECS debt on your ability to secure a home loan can help you plan for and navigate the home loan process.

Case Study

Sarah, is a 32-year-old marketing professional from Melbourne. She has a stable job with a steady income and has managed to save a decent deposit for her first home. However, like many Australians, Sarah carries a HECS debt from her university education.

This article tells the story of Jared and Nick, first-year apprentices in Australia facing the challenge of entering the property market, who, with the guidance of their teacher and a mortgage broker, explore and successfully navigate a rent-to-buy scheme, ultimately becoming homeowners.

Jared and Nick met at trade school and immediately became best mates. As first-year apprentices earning minimum wages and still living at home, each wondered how they’d ever afford to buy a place of their own.

Australia’s property market is challenging, but for young people just starting out, it can be totally demoralising.

While Jared and Nick would be able to afford rental payments, neither could see themselves scraping a home deposit together.

This short article warns readers to do their research before switching home loans. It provides some alternatives to consider.

Every time there is an interest rate change the first thought to flit through the minds of thousands of mortgage-holders is “should we change lenders to get a better deal?” For some people that might be a good idea but instead of blindly acting on that urge, always do some homework before you act. Sometimes the devil you know is better than the devil you don’t, and there’s more to a lender than their interest rate. For example...

This article delves into the rising trend of parental financial support for homebuyers, examining the consequences for both parents and children, including potential strains on finances and long-term impacts on housing markets.

The temptation is obvious. Soaring house prices have made buying a home tough for most home buyers and prompted many parents to think they should step in and make a financial contribution.

The typical argument is that Mum and Dad don’t really need the money and that their children will inherit it one day anyway so it might as well be now when it can do some real good.

As a result of this thinking, the Bank of Mum and Dad is now estimated to be one of the top 10 mortgage lenders in the country, as more and more people turn to their parents for financial help when buying a home.

With higher interest rates and costs of living, Australian homeowners are feeling the pressure. This article explores mortgage stress and what you can do to avoid mortgage default.

When building a home, it's often said that the foundations are the most important part. Their primary purpose is to hold your house up - supporting the structure and preventing it from being affected by uneven ground.

Similarly, when purchasing a home and financing it with a mortgage, your financial foundation is just as crucial. A solid financial foundation can help you avoid mortgage stress, loan default, or even eviction.

Unfortunately, economic factors such as higher living expenses, interest rate hikes, or job loss can jeopardise your financial foundation.

This article provides a guide on how to prepare for, and future proof, your home purchase to ensure you avoid experiencing a home loan headache! It also covers a range of actions that can be taken when experiencing mortgage stress.

Inflation and interest rates are rapidly rising in Australia and around the world. This means higher cost of living, higher home loan repayments … and higher mortgage stress for homeowners.

Research by Digital Finance Analytics (April 2022) found that 42.2% of mortgaged households are in “financial flow stress”, which is determined by examining net cashflows and identifying where households are consistently spending more than net income.

Additionally, according to Roy Morgan (September 2022), mortgage specific risk in Australia is set to increase to nearly 1-in-4 mortgage holders by November 2022.

This article looks at the hidden costs involved in the purchase of a new home and how to plan your savings around them.

You’ve decided that it’s time to buy your first home; Congratulations! It’s such an exciting milestone in anyone's life and should be as effortless as possible.

It’s important not to be caught out by the hidden costs that come with the purchase of your home. The costs add up quickly and can cause issues if you’re ill-prepared.

The following should give you a clear insight into what to expect and how to plan your savings correctly to avoid any unforeseen obstacles in your home buying journey.

Struggling to get into the property market? You’re not alone. This article explains how co-ownership may be the key to help you achieve the “Great Australian Dream”. This is a non-biased piece that explores both the pros and cons for co-ownership.

As it seems that home ownership moves beyond many peoples’ reach, the option of co-ownership is seeing many Australians achieve their own Great Australian Dream.

Co-ownership refers to a single property owned by two or more parties. Geared towards people unable to purchase a property independently, it involves pooling resources with others in the same boat, and getting a foot on the property ladder.

This article explains the importance of your debt-to-income (DTI) ratio to your bank when assessing your loan application. With the use of a case study, we delve into your debt-to-credit ratio, your loan valuation ratio and Lenders Mortgage Insurance (LMI). An excellent article for first time home loan applicants.

Applying for a home loan can take on almost mystical proportions, with most Australians unsure of just how much money they can borrow. As a result, they often make the mistake of trying to secure too much money, only to be knocked back.

Most people understand they need a deposit, usually 20 per cent or more of the purchase price, and to provide details of their income and credit history to secure a loan. Still, too often, they overlook the bank's need to conform to certain set debt ratios.

Have you considered what may happen if your interest rates increase? The unfortunate reality is that many families will face financial distress, rather quickly. This article discusses how just a small increase to interest rates can cause budgets to crumble and what you can do to prepare yourself financially.

As interest rates rise and large numbers of fixed low rate mortgages end, an unfortunate reality is looming with financial distress becoming all too real for many.

Market research firm Roy Morgan reports mortgage stress hit its highest seen since April 2018, with 22.6 per cent of mortgage holders ‘At Risk’ in November 2022.

In addition, calculations by the fintech company, Digital Finance Analytics, suggest just a 0.5 per rise in home loan interest rates could push another 220,000 Australian households into financial difficulties.

This article highlights five factors that may derail your home loan application, and explains how professional advice, from both a financial adviser and mortgage broker, can improve your chances of being approved.

Buying a new home is undoubtedly one of the most exciting time in our lives. But, on the other hand, a mortgage application can be a stressful process as you dive into a world of unknowns.

Let’s look at five factors that may negatively affect your chance of being approved for a home loan.

The great Australian obsession with owning your home has engulfed many families to the point of irreparable credit damage. This article defines mortgage stress, how to deal with it and how to avoid it.

Once upon a time, banks would lend would-be home owners a sum of money based on repayments being less than 30% of the borrower’s gross income. As interest rates fell in the early 90s and competition from non-bank lenders flourished, home loan providers relaxed this rule and increased the flexibility of loans generally. Many Australians are now paying dearly for ignoring a rule which was initially put in place to protect us.

How to identify mortgage stress

In the most basic terms, mortgage stress means that a person is struggling to meet their loan repayments.

A mortgage broker can navigate the process of finding the right loan for you so you can focus on what's most important to you. Further, a mortgage broker usually has access to a wider range of loan products and rates than if you went straight to one bank or did all of the groundwork yourself. In this article, we look at the role of mortgage brokers and the key benefits of using one. We also set out a list of questions and documents for clients to prepare themselves for a meeting with their mortgage broker.

Buying a home is likely one of the biggest financial decisions you'll make in your life. While the process can be exciting, it can also be daunting, especially when it comes to financing your dream home.

What is the role of a mortgage broker?

A mortgage broker is a professional who will liaise with banks and other lenders or financial institutions to organise your home loan. They will have access to a range of loans and financial products and will save you the time of going to a handful of lenders yourself.

This article is about the First Home Loan deposit scheme. It outlines the eligibility criteria as well as discussing the advantages and disadvantages of the scheme. It encourages readers to see a mortgage broker or lender to guide them through the application process.

Struggling to save for a 20% deposit on your first home? A recent Australian Government initiative may allow you to buy your first home with a much smaller deposit, helping you take that first step to home ownership years sooner.

What is the First Home Loan Deposit Scheme?

The First Home Loan Deposit Scheme (FHLDS) provides lenders with a Government-backed guarantee that allows some eligible first home buyers to purchase a home with a deposit of as little as 5%.

This article explains how equity is accumulated and ways in which you can use some of your equity to build additional wealth. It explains there are risks when using your equity and suggests working with the right professionals to get a desired result.

The equity you have in your home is simply the difference between the current market value of your home and the amount you still owe on your home loan. For example, if your home is worth $800,000 and your outstanding loan balance is $200,000, your equity is $600,000.
Your equity increases as home loan repayments reduce your loan balance or whenever your property increases in value. While you can’t control the property market, the more that you can pay off your home loan the quicker you build equity.

This article explains five ways you could save money by refinancing your home loan. It suggests talking to a qualified professional.

Many people treat their home loan as a set-and-forget, riding out whatever the original loan terms and prevailing interest rates dish up. They may be doing themselves a disservice, as there are several ways in which borrowers can benefit from refinancing their mortgage.

This article gives reasons as to why it has become so much harder to obtain a home loan, including The Royal Commission, changes in deposits and stress testing, to name just a few.

Anyone applying for a home loan these days will find that there are more hurdles to jump than has recently been the case. So why is it harder to get a home loan? And what can you do to improve your chances of getting a loan?

With tighter lending criteria being applied to borrowers, this article explains what responsible lending is and what is required when applying for or refinancing a mortgage, and why.

Whether it’s due to over-enthusiastic lenders or desperate borrowers, failure to adhere to robust lending standards can land some borrowers in serious financial distress. In many cases the difficulties experienced by these borrowers could have been avoided if the lenders had complied with their responsible lending obligations.

In brief, this means inquiring into a borrower’s financial situation and requirements, verifying the information supplied, and making an assessment as to whether or not the credit contract is suitable for the borrower. Ideally, the lender should also consider the ability of the borrower to maintain loan payments if there is an increase in interest rates. This is a common pathway into mortgage stress – the situation where loan repayments take up too large a fraction of household income.

This detailed article contains a comparison to show how salary sacrificing can be a tax-effective strategy when implemented correctly. It then includes a case study to show a comparison of salary sacrifice vs paying more off a mortgage.

One of the most popular questions we are asked by our clients is whether it’s best to pay off their mortgage first or salary sacrifice money into their super fund – or can they do both? The answer to this question is never the same considering that everyone’s needs are completely different, but we thought we’d provide an explanation with some examples to give you an idea of how both options work.

It’s not really a sacrifice

The First Home Super Saver (FHSS) Scheme is offered to help people save for their first home. This article highlights its features and explains how it works and why it may be beneficial – for some.

You’re moving into your new home; corks are popping and there are smiles all around – classic advertising that for many seems unattainable.

Although many Australians may want to bash the banks over tighter home lending criteria, it’s the bank regulator, the Australian Prudential Regulatory Authority (APRA) that has set these requirements to address the risks in the mortgage market. Low deposits were increasing the risks carried by lenders.

A poll conducted by MoneySmart showed that 43% of Australians don’t save. Of the number who are saving, only 16% are doing it comfortably.

The reasons are varied, but for the most part, modern families are over-burdened with commitments and more pressing priorities. Meanwhile, home ownership slips further away.

But fear not – enter, the First Home Super Saver (FHSS) Scheme!

It’s not only higher property prices that are making it difficult to get a home loan. Changes to banking policies are making the process even more complex. This article explains what lenders will want from a borrower and how to meet those requirements. It recommends professional guidance from a financial planner and a mortgage broker.

Finding it harder to obtain a home loan? Don’t take it personally. The banking regulators are placing tighter limits on how much banks and other financial institutions can lend. This is largely in an effort to exert some control over Australia’s infamously high housing costs and, more generally, to reduce our historically high level of household debt.

On top of that, the banks themselves are concerned that any increase in interest rates will put more households under financial stress, leading to an increase in missed mortgage repayments.

That said, in a tighter home loan market there are still things you can do to put yourself ahead of the pack.

This article begins with an explanation of the difference between offset accounts and redraw facilities but then goes on to explain how these two are affected by tax. It is aimed at the investor, however, depending on what a current homeowner decides in the future, it could have a wider readership.

Most modern mortgages come with a redraw facility and a mortgage offset account.

With a redraw facility you can make additional payments to reduce the outstanding balance of your mortgage, which in turn reduces the amount of interest you pay. However, those additional repayments are not locked away – you can redraw on them at some point in the future. This increases the loan balance, so you’ll pay more interest.

An offset account works more like your day-to-day bank account. However the balance of the offset account is subtracted from the outstanding balance of your mortgage, and you only pay interest on this difference.

So which is the better way to manage your mortgage and minimise interest payments: redraw or offset?

This article explains how offset accounts can be used to reduce loan terms and interest on home mortgages and investment properties. It includes a case study to show how they can be used as a highly effective planning tool.

It’s a common misconception that mortgage offset accounts are loan products when in fact they are savings accounts sitting within a mortgage structure. If you’re not sure how mortgage offset accounts might benefit you – read on!