Mortgages

Are Mortgage Rates Going Down?

Regardless of the reason, we can all appreciate that interest rates have been surging throughout Australia for a bit too long now, but are mortgage rates going down at last?

Some of the early signs we’ve had in 2025 this far would indicate that they genuinely are. For instance, on the 20th of May 2025, the Reserve Bank of Australia (RBA) cut the cash rate by 25 basis points to 3.85%, which was actually its first reduction in years.

The RBA noted that inflation has “fallen substantially since the peak in 2022” and growth was well below targets. So with inflation being back towards the 2-3% target and the economy sluggish, financial markets quickly began pricing in further rate cuts.

So, what does all that mean? In short, many economists now see the RBA shifting into easing mode for the rest of 2025.

Cash Rate Movement in 2025

Over the last few months, the RBA have made it public that they plan on, albeit cautiously, pivoting. Governor Michele Bullock described the May move as a “cautious” rate cut, noting the Board had even considered a larger cut but chose to move carefully.

Observers point out that inflation has eased significantly and is expected to return to the 2-3% range a lot sooner than we all initially thought, while GDP growth remains weak. Some analysts are forecasting the cash rate to reach about 3.6% by July, with another 25bp cut in August.

In effect, Reserve Bank policy has shifted from tightening to a much more gradual easing plan (The RBA is the sole issuer of monetary policy).

So if inflation keeps falling and the economy stays soft, markets expect the RBA to cut again later in 2025. We’ll get into what kinds of impact this can have shortly.

Passing on the Cuts

As to be expected, a lot of the big lenders out there moved pretty fast to match the RBA. On the same day, the 20th of May 2025, NAB announced it would cut its standard variable home loan rate by 0.25% (effective from the 30th of May). Within hours, Commonwealth Bank (CBA) said it would also cut its home loan variable rates by 0.25% (effective from the 30th of May), and ANZ announced the same 0.25% reduction.

Westpac followed suit, cutting its variable home loan rates by 0.25% for both new and existing borrowers (effective from the 3rd of June). Even Macquarie Bank lowered its variable home loan rates by 0.25% from the 23rd of May. You get the picture. In effect, nearly every major mortgage lender passed on the RBA’s rate cut to customers, but what does that entail?

Effect on Monthly Repayments

The good news is that these cuts translate into real dollar savings on monthly repayments. For example, CBA estimated that a 0.25% cut saves about $80 per month on a $500,000 owner-occupier loan under principal-and-interest repayments.

Larger loan amounts, of course, save more per basis-point: a 0.25% cut on a $600,000 loan would save roughly $100 per month. After two consecutive cuts, CBA noted many homeowners will “start to see a more meaningful change month to month” in their budgets. In other words, for average Australians carrying large home loan balances, even a quarter-point cut frees up hundreds of dollars each month.

Fixed vs Variable Mortgages

Most borrowers focus on variable-rate mortgages because those move with the cash rate. But fixed rate mortgages have been adjusting, too. Some banks actually cut fixed deals in anticipation.

In early 2025, Macquarie cut its 1- to 3-year fixed home loan rates by up to 0.16%, which naturally made them very competitive. In fact, many lenders now advertise lower fixed rate promotions than a few months ago.

If you have a fixed-rate loan now, your rate won’t change until that fixed term ends. But when your fixed term rolls off or if you take a new fixed-rate deal, you’ll find it set at a lower interest rate than before (be sure to compare principal-and-interest vs interest-only options and note the comparison rate whenever you’re looking at any fixed offer).

Exploring Your Options – What It Means for Borrowers

All things considered here, the trend is overall pretty good for borrowers. Lower interest rates means smaller monthly repayments on new and existing loans. That said, you’ve still got to compare the whole-of-loan cost, not just the headline rate.

Fortunately, Australian rules require lenders to display a comparison rate that includes most fees, along with a comparison rate warning. For example, CommBank’s disclosure notes: “Comparison rate is true only for the examples given and may not include all fees and charges”.

So this warning basically just reminds us that these advertised rates may exclude certain fees, and that two loans with the same nominal rate can have different total costs once things like fees and loan term are factored in.

Using Comparison Tables and Product Documents

When you’re thinking about choosing a home loan, try to take full advantage of some of the tools you have available. Many websites offer comparison tables that line up standard variable and fixed rates across lenders.

These tables are a solid way of spotting low advertised rates quickly. But after that, dive into each loan’s detail – look at the product information. Every home loan product has a Product Disclosure Statement (PDS) and a Target Market Determination (TMD) from the lender (the product issuer).

These documents spell out details like:

Who the loan is designed for
Its fees and charges
Its key conditions

The TMD in particular will highlight the typical borrower’s objective financial situation . In short, just make sure any loan matches your situation. Loan amounts and term length matter too – a lower interest rate on a large loan still means big payments, and vice versa.

Important Information and Disclaimers

Try to keep in mind here that everyone’s objectives and financial situation are different, so don’t just immediately take what we’re saying here as financial advice – it’s not.

Always make sure you’re reviewing all of the important information provided by the lender before acting on anything. Read the product disclosure statement (PDS) and target market determination (TMD) for any loan you consider.

Furthermore, we strongly recommend that you check the “Important Information” section of any of those documents for fees, and watch for any “comparison rate warning” or similar fine print.

Opportunities for Existing Borrowers

With the RBA cutting its cash rate and most lenders now responding appropriately, the overall trend is toward cheaper home loans than a year ago. Good news!

Keep an eye on rate announcements – when banks cut rates, it often pays to lock in a lower rate or refinance soon after. To put all this simply, borrowers who are informed and compare loan options are always going to benefit the most when home loan interest rates go down.

How Upscore Can Help

Ready to secure a loan? You’ll be able to compare offers from different lenders when you use Upscore’s free Finance Passport service, which is a solid way of getting the best loan terms for your circumstances. This can be a real advantage, whether you’re refinancing your Australian home loan or buying property overseas.

Get your free Finance Passport today!

How Much Deposit Do I Need For An Investment Property?

We get that buying an investment property can be exciting – it’s a whole different process to buying somewhere to live and your mindset is completely different – but it still raises a few practical questions.

In Australia, lenders generally expect a larger deposit on an investment home loan than on an owner-occupied loan. Typically, you’ll need around 20% of the purchase price as a deposit (an 80% loan-to-value ratio) if you want to avoid paying lenders mortgage insurance (LMI), which we’d definitely recommend you aim to do.

Some lenders will accept smaller deposits if you pay for the insurance. For example, some offer loans with as little as 10% deposit – but you must pay LMI. LMI is essentially insurance for the bank if you default.

How Much Can I Borrow?

So one of the main things that affects your borrowing power is your deposit size. This, alongside your income and whatever equity you already have. In practice, a larger deposit generally means a larger loan amount. Just make sure your first step here is reviewing your finances and working out how much you can borrow and afford.

Getting Pre-Approval

After this, get a home loan pre-approval so you can effectively ‘lock in’ your budget. A pre-approval essentially gives you provisional credit approval and shows sellers that you actually have a budget and are serious.

Since mid-2024, lenders have been a bit stricter on serviceability. And as a borrower, you’ll likely find that you qualify for smaller loan amounts than in earlier years. So it generally pays to be conservative: always ask yourself “how much can I borrow for investment property” in realistic terms.

As a rule of thumb, the maximum loan amount is roughly the purchase price minus your deposit, but it’s subject to your ability to service the loan. Use online borrowing-power calculators (you can find one at Upscore) or a broker’s help so you know you’re not overstretching.

Loan Types and Repayments

Next, consider your loan structure. You can choose fixed or variable rates, and principal-and-interest (P&I) or interest-only repayment options.

Interest-only loans keep your monthly repayments lower at first, so this helps your short-term cash flow when the property is finally rented. That said, interest-only comes with a longer-term cost: you pay no principal for a time, so you end up paying more interest overall.

Comparing Loan Rates

In fact, over the life of an interest-only loan you’ll usually end up paying more interest than with a standard loan. APRA data shows interest-only loans were about 21.0% of new housing lending in mid-2024.

And keep in mind that interest-only loans often carry higher interest rates than P&I loans, which just means a higher ongoing cost. If you choose interest-only, definitely plan for a jump in repayments later when the interest-only period ends.

So, how do P&I loans compare? These have higher repayments from day one but pay off the balance a lot more gradually. That said, there’s not really one ‘best choice’ here – it depends on your goals: interest-only can maximise cash flow now, while P&I is better if you plan to pay off the loan faster.

As always, read all loan terms and conditions carefully to understand rates, fees and limits before signing.

Cash Flow vs. Growth

So, after you’ve got a better idea of what loan type suits your needs the most, you’ve got to start thinking about your broader investment strategy.

Are you after steady cash flow or long-term capital growth? It’s not exactly uncommon for investors to aim for both, but one of those often takes priority over the other.

If cash flow is key, look for areas that have strong rental demand and decent yields. If growth is the goal, you might want to accept lower initial rent in exchange for a suburb that’s on the rise.

Generally speaking Australian gross rental yields are moving all the time, so it’s to give you an exact figure of what to expect. That said, inner-city yields (e.g. Sydney, Melbourne) tend to be lower.

That might sound a bit counter-intuitive, but because the property’s market value in these cities are disproportionately high compared to the rental income it can generate, the yield is actually a bit lower if you’re focused on short-term gains.

Always calculate whether expected rental income will cover your loan repayments and costs. If rental income is lower than your expenses, you’ll have negative cash flow (and rely on the tax offset we described).

Negative Gearing Benefits

Remember tax rules: in Australia you can generally deduct most property expenses (especially loan interest) against your taxable income. This means if your rent doesn’t cover your costs, that loss (a negatively geared situation) can often be used to reduce your tax, which is not a bad situation to be in.

Negative gearing can therefore offset some of your shortfalls while you wait for capital growth. It’s actually pretty common for investors to accept short-term losses since they know they will get tax deductions and hopefully capital gains later.

Choosing the Property

Location and property type affect both deposit size and returns. For example, Sydney’s median house price is about $2.05M (mid-2025), so a 20% deposit would be over $400k.

Brisbane’s median is around the $960k mark, so the deposit needed is much smaller. Also consider rental yield: inner-city apartments often yield under 4%, while houses in popular suburbs or smaller capitals tend to yield around 5% or more.

So just decide whether you want to prioritise capital growth (often higher in major-city suburbs) or rental yield (sometimes higher in regional or emerging areas).

Tenant Perspective

Think like you’re the tenant who’s going to be living here: amenities matter. This means you need easy access to:

Public transport
Schools
Shops

Brokers even suggest writing down what tenants want – “good schools nearby, parking spots and noise levels” are commonly cited factors. Take these into account as they’re almost always going to improve your rental income and reduce your risk of vacancies.

Upfront Costs

And don’t forget the other costs beyond the deposit:

Stamp duty
Legal and lender fees
Building inspections
Any initial repairs or renovations

These all have to be budgeted for. If your deposit is under 20%, add the LMI premium to your budget as well. For example, stamp duty on an $800k property can exceed $30,000, so these costs really matter. Altogether, these expenses can add tens of thousands to the total.

Final Steps and Credit Readiness

Before you make an offer, get organised. Secure formal pre-approval so you know exactly how much you can borrow. Lenders will then scrutinise your entire financial situation, which includes:

Income
Debts
Expenses
Credit score

That’s why you should address any credit issues and assemble all your paperwork in advance. Also, read every loan’s fine print. Know whether the loan is fixed or variable or how interest is calculated (including what fees or limits might apply.

Finally, consider getting professional help. A mortgage broker who specialises in property investing can explain which lenders have flexible rules (for example on LVR or interest-only) and help structure your loan to fit your strategy.

How Upscore Can Help

Looking to make the lending process as streamlined as possible? Upscore’s Finance Passport is free to try, so signing up early can give you insights into your credit standing before you apply.

Get started today!

How Does Equity Work When Buying a Second Home?

Are you thinking of getting an investment property, or just want to know how equity works when buying a second home? In simple terms, equity is the part of your existing home that you actually own and not just what you’re borrowing. So it’s market value minus what you owe.

For example, if your home is worth $800,000 and you owe $450,000 on the mortgage, your equity is $350,000. You can use that equity as part of the deposit on your next property. This means tapping the value already built up in your current home to fund the new purchase.

Again, that could be for a buy-to-let type property investment or just a house you plan to use as a holiday home, since the mechanics are fairly similar either way. We’re going to break down all you need to know about how this works throughout this article.

Calculating Your Usable Equity

So not all of that equity we mentioned earlier is actually immediately borrowable because lenders usually lend up to about 80% of your home’s value. This means your usable equity is the result of 0.8 x your home’s value – loan balance.

To use another example, on a $500,000 home with $320,000 owed, 80% of $500k is $400,000, minus $320,000 leaves you with $80,000 usable equity. Lenders like CommBank explain this sort of equation when you’re trying to tap into your equity: a $750,000 home with $400,000 owed has $350,000 equity, but only $200,000 usable (80% of value minus loan).

This all essentially means that any deposit beyond your equity must come from you. Lenders generally expect about a 20% deposit (often called a “20 deposit”). If your equity only covers, say, 15% of the price, the remaining 5% has to be a cash deposit or savings.

Keep in mind you’ll still need a bit of extra cash for stamp duty and any fees on the second home. If your usable equity isn’t enough for the full deposit and fees, you must make a cash contribution.

Using Equity to Fund the Second Home

In practice, you’ll be turning that equity into cash either by refinancing or getting a second mortgage. This is also generally one of the more popular ways to buy a second property. A common approach is a home loan top-up: you ask the lender to increase your existing mortgage and withdraw the extra as cash for the deposit.

Alternatively, you might open a separate investment loan against your current home to get the funds. In any case, you’ve effectively borrowed against your own equity.

After the top-up, your mortgage on the original home has increased – you now owe more. For example, if you buy a $400,000 house using an $80,000 equity deposit, the new loan amount is $320,000, and you pay interest on than $320k just as on a normal mortgage. In other words, you’re still paying the lender interest on that money.

Effectively, this means you’re taking advantage of the equity in your home to make this purchase comfortably.

Remember, your first home now secures the second loan too. We appreciate that this might all sound a bit complicated, but the main takeaway here is that using equity ties the two properties together financially.

Pros and Cons

So, what are the main arguments for using this method?

Pros

Using equity to buy a second home can be a good idea if you want to move fast. You’re not going to have to save years for a deposit, and a larger deposit can reduce or avoid lenders mortgage insurance (LMI). This can save you thousands in LMI premiums.

Cons

On the downside, you are increasing your total debt. Your repayments are going to get way bigger and make your cash flow a lot less manageable. You’re basically borrowing more money and increasing the amount you owe when you top up, so your bills go up.

Borrowing an extra $80,000 means paying interest on that $80,000 more debt. Also, keep in mind that investment home loans often carry slightly higher interest rates (0.2 – 0.4% more) than owner-occupier loans.

Some investors even take a short interest-only period on the new loan to improve cash flow, but this means you won’t be building up equity as quickly. Every dollar you borrow via equity is one more dollar of debt you repay at interest.

Investment Property vs Personal Use

If the second home is rented out, the rental income you’re getting from that can definitely help cover the loan. In fact, rental income can give you a steady cashflow, and most of the mortgage interest and other costs on that loan are tax-deductible. You’d also be able to negative-gear any rental loss against their other income.

On the other hand, if you’re just wanting it as a holiday home for personal use then you’re getting no rental income or tax deductions: you cover all interest and costs yourself. Also, any profit on sale will be fully taxable (since it was never your main residence), so you won’t get the main home CGT break.

Borrowing Power and Advice

Before you make a decision, check your borrowing power – the amount the bank will lend you based on your:

Income
Expenses
Existing debts

Even with your equity, lenders need to make sure you can actually service two loans. It’s smart to talk to a lending specialist or mortgage broker. Any proper home lending specialist can explain how your equity and borrowing power work together.

Our service at Upscore also helps you compare home loans and lets you choose the best lender for your needs. And another thing to remember is that interest rates on the new loan will reflect current market levels.

Just keep in mind that it’s not at all uncommon for lenders to charge a bit more on investment loans, and they tend to have different rules for interest-only or fixed terms. If you need some help sorting these details, a broker or even an online tool can calculate your borrowing power (which, again, you can do with Upscore) and match you to suitable home loans.

Grants and Final Thoughts

Unlike first-home buyers, there’s no general grant for second-home purchases in Australia. The First Home Owner Grant is only for first-timers, and most state incentives are only for specific cases.

So basically, there is no national “Second Home Buyers Grant.” (For example, Queensland’s new co-ownership plan was nicknamed the Second Home Buyers Grant, but it’s really just a shared-equity scheme, not a cash handout.)

In summary, using equity to buy a second home means converting the equity in your existing home into the deposit on another property. If you’re in doubt about how any of this works, get professional advice from a broker or financial adviser.

How Upscore Can Help

Ready to explore your options? Try signing up for Upscore’s Finance Passport. It will calculate your borrowing power based on your income and debts, then show you home loan options from different lenders that match your situation.

Secure your Upscore Finance Passport now!

Refinance Home Loan – All You Need to Know

Both property investors and regular people who live in their homes refinance their home loans so they’re able to have a better mortgage situation. We get that it’s one of those things that can sound a bit complicated, though.

A refinance home loan is essentially just a new loan that replaces your existing mortgage. You could opt for a home refinance if you’re looking for a lower interest rate, or even just to access equity for other purposes. It could even be a matter of just wanting a loan with generally better features.

Throughout this article, we’ll break down:

What refinancing is
Why you might consider it
How switching home loans works
Key terms you should know about

What Is a Refinance Home Loan?

For anyone wondering what is refinance home loan exactly, it’s basically just when you take out a new loan so you can pay off your current mortgage. The main idea here is that your new one will have a lower rate or more suitable terms.

Some people call it a home refinance or simply just refinance house, but the general principle is the same: you’re getting a new deal on your mortgage to hopefully save money or better suit your needs. The new loan pays out the old loan, and you then make future repayments to the new lender.

How Home Equity Works

One of the main parts of refinancing is the equity in your home. Equity is the part of your property that you own outright – basically the difference between your home’s market value and the remaining loan balance.

For example, if your home is worth $700,000 and your mortgage balance is $400,000, you have $300,000 in equity. Most lenders want you to have at least 20% equity (meaning your loan to value ratio is 80% or less) to approve a refinance, unless you’re willing to pay lender’s mortgage insurance (LMI). This is just another cost you’re better off avoiding if possible.

Your loan-to-value ratio, or LVR, is simply the ratio of your loan amount to the property value. More equity means a lower (and safer) LVR, which not only avoids LMI but can even help you get a better rate. Lenders pay close attention to LVR, as this ratio LVR is a key factor in assessing your loan application.

Refinancing also lets you reconsider your loan type and features. You might switch from a variable interest rate loan to a fixed rate home loan so you’ve got a bit more certainty in your repayments (fixed rate home loans lock in your interest rate for a set period).

Or you might go the opposite way to get more flexibility. If you currently have a fixed rate period ending soon, it’s fairly common to start looking around – most people refinance when a fixed term is about to revert back to a higher variable rate.

Why Refinance Your Mortgage?

Not sure why to refinance your mortgage? See a few of the main benefits below:

Lower Interest Rate and Repayments

The most popular reason to refinance is so that you can get a lower rate. A reduced interest rate can mean smaller monthly repayments and significant savings over the life of the loan.

Cash-Back Offers

Some lenders offer a refinance home loan cash back promotion – essentially a cash bonus when you bring your mortgage over to them These deals might give you a few thousand dollars upfront. Be sure the new loan’s interest rate and fees are competitive, so that the cash back is actually a true gain and not just wiped out by a higher rate.

Access Your Home Equity

If you have built up equity, refinancing lets you tap into it. For instance, you might increase your loan amount to:

Fund a renovation
Buy another property
Or even consolidate other debts

You’re “cashing out” some equity while refinancing – putting your home’s value to work for you.

Better Loan Products or Features

You might also refinance to get loan features that you don’t have with your current mortgage. For example, you could choose a new loan product that offers an offset transaction account (which helps reduce interest costs), or switch the type of loan – like from an interest-only loan to a principal-and-interest loan – to better suit your financial goals.

You might wonder, is it good to refinance your home every time? Not necessarily. If you’re already on a great rate and plan to sell soon (or would have high costs like break fees or LMI on a high LVR ratio), it might not save you money. Always weigh the costs vs savings – if the new deal doesn’t clearly put you ahead, staying with your current lender could be the smarter move.

Switching Home Loans: The Refinancing Process

Refinancing isn’t something you’ll just do on a whim since it requires a bit of planning. That said, it’s not that difficult – here’s an overview of how refinancing a home loan works in Australia:

Review Your Current Loan and Goals

Start by checking your:

Current interest rate
Loan balance
Features
Possible exit fees

Then just think what it is you want from a new loan – maybe a lower rate or just specific features that your current loan doesn’t have.

Compare Loan Options

Shop around (or consult a mortgage broker) to find a good deal. Compare interest rates, fees (like application or ongoing fees), and features across various loan products. If your existing lender is willing to negotiate, compare their retention loan offer to other lenders’ offers.

Check Your Eligibility

Make sure you meet the new lender’s requirements. They will assess factors like your income and credit score, just like when you first got your mortgage. You’ll generally need a solid credit history and ideally at least 20% equity (an LVR of 80% or less) for the smoothest approval. The lender may arrange a fresh valuation of your property during this step.

Apply for the New Loan

Once you’ve chosen a lender and loan product, submit your refinance application. You’ll need to provide documentation:

Payslips
Bank statements
ID
Details of your current loan

After the application, the new lender will process it and (if all looks good) approve your loan – often giving a conditional approval first, then final approval. You’ll then receive a formal contract or loan offer to sign.

Settlement (Loan Switch) Day

After you sign the paperwork, the new lender works with your old lender to settle the refinance. On the settlement day, the new loan funds are used to pay off your old mortgage, closing it out, and your loan officially transfers to the new lender.

You’ll now make repayments to the new bank moving forward. The whole refinancing process usually takes a few weeks – often around 4-8 weeks (about 60 days) from application to settlement. Once settlement is complete, update your payments to the new lender – then enjoy your new loan’s benefits!

How Upscore Can Help

Ready to get started? Sign up for Upscore’s Finance Passport to simplify the refinance process and compare home loan offers from multiple lenders today. It’s free and could save you time and money.

Get your Upscore Finance Passport today!

Mortgage Broker vs Bank Manager – Which Is Best for You?

Mortgage broker vs bank for home loan – which option is best? Both have pretty similar roles so we’re definitely not surprised by how common a question this is by most Australians, from first home buyers to property investors.

On one hand, working with a mortgage broker can generally just be quite convenient. Not to mention that it gives you the ability to compare loans from multiple lenders. On the other hand, walking into your local bank feels straightforward and familiar. You might not have that feeling like someone’s trying to make money out of you, either. So, how do you choose the right path for your financial situation?

Generally speaking, there’s not actually a one-size-fits-all answer here because both options have their pros and cons when it comes to factors like:

Interest rates
Loan choices
Support
Overall experience

Throughout this guide, we’ll look at the key differences – from rates and fees to the range of home loan products and long-term support – so any potential home buyers out there reading this can decide what’s best for them.

Working with a Mortgage Broker

A mortgage broker is like a home loan matchmaker. When you’re working with a mortgage broker, they do the legwork to find loan options from multiple lenders that suit your needs. Instead of being limited to one bank’s offerings, you get access to a variety of home loan products across different financial institutions. That’s the main takeaway.

A good mortgage broker will understand your goals and overall financial situation, then use their network to find a deal that fits. The best part here is that brokers are typically free for you – they get paid by the lender, not by charging fees to you. In other words, you usually won’t pay any out-of-pocket broker fees for their service.

So really, it’s no wonder nearly three-quarters of new home loans in Australia are arranged through brokers – many Aussies like the choice and convenience brokers give you.

Other Advantages

And on that whole scamming issue, brokers in Australia are actually legally required to act in your best interest. This means they must prioritise finding you the best home loan deal for your needs.

This duty sets them apart from a bank lender, who isn’t held to the same standard. Keep in mind, though, brokers work with a panel of lenders – a wide selection, but not every lender in the market. And while it’s rare, an unethical broker might favour one lender that pays them more commission. However, the Best Interests Duty now in place is designed to prevent that by legally obligating brokers to put your needs first.

Simplicity

Using a broker can also make applying for a home loan much easier. They:

Help gather your documents
Fill out forms
Handle the back-and-forth with lenders

If you’re a first home buyer feeling overwhelmed, a broker will walk you through each step in plain English. And if you’re an investor, a broker can save you heaps of time – many property investors rely on brokers to compare loan options and juggle multiple lenders for them.

Extra Support

Another big plus is the ongoing support. A broker’s job isn’t over once your loan settles. Down the track, they can check your loan and make sure your rate stays competitive. In fact, brokers often help you refinance or switch loans later if it benefits you.

It’s a long-term relationship, not just a one-off transaction. Of course, choosing a mortgage broker you trust is key – you want someone in your corner for the long haul.

Working with a Bank Lender

Going directly to a bank is the traditional way to get a home loan. The one you probably have in your mind as the default option. If you walk into your bank to apply, you’ll deal with a bank lender (basically a loans officer or bank manager).

This means working with one financial institution and its own suite of home loan products. The bank can’t offer you loans from other lenders – only what they sell in-house. So you won’t get the same breadth of choice you’d have with a broker.

However, many people still like going to their bank. Maybe you’ve been with them for years and feel comfortable there. The familiarity can make the process feel simpler since the bank already has your details on file.

Other Advantages

Sticking with your bank can have other perks, too. It’s convenient to keep all your finances in one place – your savings, accounts, credit cards, and mortgage under one roof.

Banks also sometimes reward loyalty with perks like interest rate discounts or fee waivers on bundled products. And if you find a great deal elsewhere, your bank might even match it if you ask. There’s no harm in saying to them that you found a lower rate and asking if they could beat it. Often they’ll try, especially if you’re a valued long-term customer.

On the flip side, going direct means comparing loan offers falls on you. Your bank isn’t going to tell you if a competitor has a better deal. So if you stick with one bank, you’ll need to shop around yourself to make sure you’re not missing out. That can be time-consuming – you might have to contact multiple banks and collect loads of different quotes.

Also, bank staff don’t charge you to discuss a loan – the bank earns money from the loan’s interest rate and fees once you sign up.

So in short, there’s usually no real difference when it comes to mortgage broker fees vs bank costs; you typically won’t pay any extra for the loan by using a broker instead of going direct. The two paths mainly differ in how many options you can see and who does the legwork.

Mortgage Broker vs Bank Manager – Which Is Best for You?

So how do you decide between the two? Think about what matters most to you: Do you want plenty of options and a guide to help you compare them, or do you prefer the simplicity of dealing with a bank you already know and trust?

If you’re a first home buyer who needs extra guidance, a broker might be your best bet. But if you’re confident in your bank and like the idea of a one-on-one with a familiar bank manager, you may lean toward the bank.

For an investor with long term plans to build a property portfolio, a broker’s ability to tap multiple lenders can be a big advantage. On the other hand, if you already have a specific loan in mind from a particular bank, going direct might feel more straightforward.

You can even talk to both a broker and your bank and compare – there’s no rule against getting information from both. Ultimately, brokers vs banks each have their place. The “best” choice is whatever makes you feel most confident and gets you a good deal. That could be from the personalised touch and broad comparison a broker gives you, or the simplicity of dealing with your bank, it’s about what works for you.

How Upscore Can Help

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Buying Property in Australia on a Temporary Visa – All You Need to Know

If you’re living in Australia on a temporary visa and want to own a home at some point in the near future, you’re certainly not alone. That’s where a lot of international students and skilled other workers are at now, but the good news is that it is actually possible to purchase a house or apartment before you become a permanent resident.

However, it’s naturally not as straightforward as it is for citizens or PR holders – there are extra rules to follow and approvals to obtain.

This guide will walk you through everything you need to know, from eligibility and government approvals to financing considerations and common challenges.

Can Temporary Visa Holders Buy Property in Australia?

In short, yes – but there are conditions. Australian law classifies anyone who isn’t a citizen or permanent resident as a foreign person when it comes to property. So if you’re on a temporary visa (because you’re an international student, for example), you can buy residential property, but you must get permission from the Foreign Investment Review Board (FIRB) first.

FIRB approval is the government’s way of overseeing foreign buyers and making sure investment from abroad adds to the housing supply rather than displacing local buyers.

It’s crucial to note here that while that’s generally the process you’d have to go through, there has actually been a key update imposed by the government that’s changed this. Now, temporary visa holders can generally only buy new dwellings or vacant land – not established (second-hand) homes.

In fact, as of April 2025 the government has temporarily banned foreign buyers (including those on temporary visas) from purchasing existing houses altogether until the 31st March 2027. So if you hoped to buy a classic Aussie cottage, you’ll need to look at brand-new properties instead. The idea is to encourage new construction and increase housing stock. This is obviously a pretty contentious rule, but there are a few exceptions.

Exceptions

If you’re buying a property jointly with an Australian citizen or permanent resident – for example, purchasing with an Aussie spouse or partner – then you won’t need FIRB approval. In that case, the law treats it as a domestic purchase. Aside from that scenario, you should expect to go through the FIRB process for any property you buy while you’re on a temporary visa.

Navigating the FIRB Approval Process

Getting FIRB approval is the first major step in buying property as a temporary resident. It might sound a bit complicated, but it’s actually a routine process with a bit of planning. You’ll need to submit an application and pay a fee.

The fee isn’t trivial – it varies based on the property price, but it will likely be several thousand dollars. Once you apply and pay, you have to wait for the decision. It usually takes a few weeks (often up to 30 days) for the authorities to process your application, so make sure to allow for that timeline. So basically, don’t commit to purchasing a home until your FIRB approval has come through.

In most cases, FIRB will approve a temporary resident’s purchase as long as you’re buying an eligible property (i.e. a new one) and you comply with any conditions. Again, you will not be able to purchase an existing property while this temporary suspension is active until the 31st of March 2027.

After You’ve Been Approved

When approval is granted, you’ll receive a “no objection” letter giving you the green light to proceed. Since you’ll be buying a new property, the conditions on your approval are usually straightforward and easy to meet.

The main thing is that you must have FIRB approval before you settle on the property, because buying without it is illegal and comes with penalties. If you’re uncertain about timing, talk to your solicitor or conveyancer about making your purchase contract conditional on FIRB approval to protect yourself.

Deposits, Loans, and Lending Considerations

Arranging finance is the next big piece of the puzzle. Getting a home loan as a temporary visa holder is definitely possible, but lenders will set some extra requirements.

The most notable difference is the deposit needed. While many Australian citizens manage to buy with a 10% deposit or less, as a non-resident you’ll typically be expected to have a larger down payment. Banks often require a 20% deposit from temporary residents, and many will lend only 70-80% of the property’s value. This means you may need to contribute 20-30% of the price yourself.

Your visa status and employment will also be under scrutiny. Lenders prefer borrowers who have some certainty of staying in Australia. Having at least 12 months remaining on your visa and a stable full-time job (usually at least six months with your current employer) are very important.

Building a good credit history in Australia (by paying your bills on time, etc.) will help as well, since banks review your credit file during loan assessment.

Not all lenders cater to temporary visa holders, but many do. Policies vary, so it can save time and stress to speak with a mortgage broker who has experience in this area.

They can identify which lenders are most likely to approve your application and guide you through the paperwork. If you have an Australian citizen or PR co-borrower (say you’re buying with your partner), that can significantly strengthen your loan application – some banks will be much more flexible if one of the borrowers is a local.

Common Challenges and How to Overcome Them

Buying property on a temporary visa comes with a few extra challenges that local buyers don’t face. One major hurdle is the additional costs. We’ve already mentioned the FIRB fee, but you should also budget for the stamp duty surcharges that most states charge foreign purchasers. This surcharge is on top of the standard stamp duty and can be significant.

For example, in New South Wales and Victoria, foreign buyers (including temporary residents) pay around an extra 8% of the property price as a stamp duty surcharge. That can amount to tens of thousands of dollars in extra tax.

The only way to avoid these charges is to wait until you become a permanent resident or to buy together with an Australian partner who is exempt. Otherwise, it’s a cost you’ll have to factor into your plans.

Another challenge is timing and paperwork. The buying process can take longer because you need FIRB approval and extra checks for your loan. It’s important to plan ahead and start early. Ideally, have your FIRB approval (or at least your application submitted) and a mortgage pre-approval in place by the time you’re ready to make an offer.

And be cautious with auctions – since auction sales are unconditional, you should only bid if your FIRB approval is already granted and your financing is solid. The extra legwork can be stressful, but with good preparation you can manage.

Despite the hurdles, remember that plenty of temporary residents successfully buy homes in Australia each year. You can be one of them with careful preparation and the right help.

How Upscore Can Help

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What Is a First Home Buyer Loan?

It’s pretty exciting when you get to that stage in your life when you’re ready to buy your first home in Australia. That said, there is a lot more admin and finance preparation for this in comparison to just renting – especially for getting a home loan.

You might have heard people talk about “first home buyer loans.” Technically, there isn’t a separate type of mortgage just for first-timers – banks mostly offer the same kinds of home loans to everyone. What makes a loan a “first home buyer loan” is really the context and the special assistance programs that first-time buyers can access.

So essentially, it’s a regular home loan, but you might be eligible for government-backed schemes that make it easier to qualify or reduce some of the costs when buying your first home. But these little measures can make a big difference if you don’t have a huge deposit saved up.

First Home Guarantee: How It Works

One of the key government programs for new buyers is the First Home Guarantee. It’s designed to help you get into a home with a much smaller deposit than you’d normally need.

Saving up the ideal 20% deposit can take years for most first-timers (and in the meantime, property prices might keep rising). So that’s where this scheme comes in, because it gives you a head start so you can buy sooner. Normally, if you have under a 20% deposit, you’d need to pay Lenders Mortgage Insurance (LMI) to protect the lender. Under the First Home Guarantee, eligible buyers can purchase a home with as little as 5% deposit and no LMI to pay.

How is that possible? Essentially, the government (through an agency called Housing Australia) acts as a guarantor for part of your loan to make up the difference. Housing Australia guarantees up to 15% of the property’s value to the lender, so your 5% deposit plus the guarantee effectively looks like a 20% deposit to the bank.

This reduces the bank’s risk and means they won’t charge you mortgage insurance. However, you need to keep in mind that this guarantee isn’t a cash payment or a freebie – you still need to provide at least 5% of the price from your own savings. But not having to reach a full 20% can shave years off the time you’d spend saving, and avoiding LMI could save you thousands of dollars.

Eligibility and Requirements

Because the First Home Guarantee involves the government helping out, there are going to be some strings attached. It targets people who genuinely need the leg up, so not everyone can use it.

To be eligible, you must be a first home buyer (or someone who hasn’t owned property in Australia in the last ten years), and you need to intend to live in the home you’re buying – the scheme isn’t for investment properties.

You can apply as an individual or as two people jointly (the two applicants don’t even have to be married – friends or siblings can team up under this scheme now). You also have to be at least 18 years old and an Australian citizen.

Income Caps

There are income caps too: currently around $125,000 per year for a single, or up to $200,000 combined for two people buying together. These limits make sure the assistance goes to low- and middle-income earners.

Additionally, the property’s price has to be under a certain threshold, which depends on where you’re buying (higher in expensive city markets like Sydney and lower in regional areas).

Availability

The scheme supports only a limited number of loans each year (for instance, 35,000 places were available in 2024-25, although this could change in the future), so there can be competition to get a spot.

You don’t apply to the government directly – instead, you apply for a regular home loan through a participating lender, and the lender handles the paperwork to get the guarantee for you. You can also use the First Home Guarantee alongside other help, like the First Home Owner Grant or the First Home Super Saver Scheme, if you’re eligible for those programs. Using multiple programs together can further reduce the upfront money you need.

Lastly, it’s worth noting that the government also offers a Family Home Guarantee (for eligible single parents, allowing a 2% deposit) and a Regional First Home Buyer Guarantee (for first home buyers in regional areas). These have specific criteria but the idea is fairly similar – a government guarantee to reduce the deposit needed. Still, the First Home Guarantee is the primary option for most first home buyers.

First Home Buyer Loan vs Standard Loan

For the most part, taking out a loan under the First Home Guarantee feels a lot like a normal home loan. You borrow from a bank, you have an interest rate and regular repayments – all that stays the same. The differences come in behind the scenes.

Standard Loans

With a standard loan, if you only have a 5% deposit, you would normally have to pay LMI or get a family member to guarantee your loan. With the First Home Guarantee, the government is stepping in as the guarantor, which spares you that LMI cost.

Another difference is the extra rules: a regular home loan doesn’t care whether you’re a first-time buyer or how much you earn (beyond ensuring you can afford the repayments), and it won’t impose a price cap on the property.

First Home Guarantee Loans

In contrast, a loan under the First Home Guarantee does come with those eligibility conditions and property value limits. Also, as mentioned earlier, it’s only for buying a home to live in – you can’t use the scheme for an investment property or a holiday house.

In terms of the deal you get from the bank, the interest rate and features for a First Home Guarantee loan are typically the same as you’d get on an equivalent loan without the guarantee. The scheme doesn’t give you a special lower rate by itself; its benefit to you is mainly that it helps you buy sooner and avoid extra costs.

Making Your First Home Purchase Easier

If you’re gearing up to buy your first home, it’s worth exploring all available support. The First Home Guarantee can be a real game-changer if you qualify. Remember, though, you still have to meet the lender’s criteria and budget for the normal home-buying expenses (like stamp duty, legal fees, inspections, etc.).

Every bit of preparation helps when it comes to making a strong loan application. And you should still shop around for a competitive interest rate and a loan that suits your needs, just as you would with any mortgage.

How Upscore Can Help

Upscore’s Finance Passport can help you compare different offers from mortgage lenders and shop around so you’re able to get the best mortgage possible for your circumstances. In a competitive market, that can give you an edge.

How Much Can I Borrow for Investment Property?

Thinking of buying property in Sydney or a holiday home abroad but don’t know how much you can actually borrow? Your borrowing capacity – essentially the amount a lender might lend you – is made up of a mix of factors.

Lenders assess your whole financial picture, which includes:

Your income
Existing debts
Any expected rental income
Your deposit size (which affects the loan-to-value ratio, or LVR)

You’ll have a much clearer idea of what a bank is realistically going to offer you if you know how these pieces overlap. While the same basic principles apply for a property in Australia as they would overseas, buying internationally can introduce a few extra considerations (which we’ll touch on below).

Income and Ongoing Commitments

Income is naturally one of the main things that make up your borrowing power. Australian lenders are going to look over your salary and other earnings (like overtime or bonuses) to gauge how much money you actually have coming in.

So generally, the steadier and more regular your income, the more comfortable the bank is going to be with lending you money. If you’re self-employed or juggling multiple jobs, they might look a bit closer or use an average, but they will definitely still count various income streams in your favour.

Outgoing Expenses

They also check what you’re already paying out each month. All existing loans and other debts you’ve got are going to chip away at the portion of your income you could be using for a new mortgage. For example, even if you pay off your credit card every month, the card’s limit (say $10,000) is treated as potential debt – the bank is going to factor in a monthly repayment on that limit when calculating your expenses.

But then you’ve got everyday living costs that they factor in on top of your debts – everything from groceries to utilities – and even how many dependents you support. The more expenses and obligations you have, the less wiggle room in your budget for additional loan repayments.

So to put all this simply, every dollar you’ve already got committed somewhere else is a dollar less available for a new property loan, which is why paying down debt can boost your borrowing capacity (it frees up cash flow that lenders can then take advantage of for your next loan).

And remember, borrowing power is not identical across all banks – each lender has its own formula and criteria, so your maximum loan can differ significantly from one to another.

Rental Income from the Investment

Naturally, one of the main perks of an investment property is that it can produce rental income – and lenders will include that in your assessable income (but not at 100%).

As a general rule, about 75-80% of the gross rent is counted. So if you plan to charge $500 a week in rent, the bank might only factor in roughly $400 of it for your borrowing capacity. The rest is left out as a buffer for things like agent fees or periods when the property might be vacant, which is obviously still a possibility.

Rental income does improve your borrowing power, just not dollar-for-dollar. And if you already own other investment properties, their rental income (minus that same buffer) and their loan repayments will also be considered.

In short, lenders add up all your income sources – including rent – and weigh them against your outgoings to decide what you can comfortably afford to borrow.

Deposit Size and Loan-to-Value Ratio (LVR)

How much you can borrow also hinges on your deposit. If you’re reading this article from an investor’s perspective, remember that you will generally need at least a 10% deposit for a home loan. The bigger your deposit, the lower your loan-to-value ratio. And the more comfortable lenders will be.

If you have less than 20%, it’s often still doable, but you are probably going to have to pay Lender’s Mortgage Insurance (LMI). LMI is a one-off insurance fee that covers the lender if you default, and it usually applies when you borrow more than 80% of the property’s value. Staying at or below an 80% LVR (i.e. 20% deposit or more) lets you avoid that extra cost and can make your loan application stronger.

For example, on a $500,000 purchase, a 10% deposit (around $50,000) might come with a hefty additional LMI premium, whereas a 20% deposit ($100,000) avoids LMI entirely and puts you in a stronger position with the lender.

Your deposit can come from savings or even equity in an existing property. You’ll see loads of investors using equity from their current home as the deposit for their next purchase. It’s essentially borrowing against the home they already own to help buy the new property.

This can be a smart way to get into another investment sooner, but remember it effectively increases the loans you have (your first home loan grows), which the bank will factor into your overall borrowing capacity.

Local Investments vs Overseas Properties

If you plan on investing abroad, the lending game changes a bit. Australian banks usually won’t accept an overseas property as collateral because they cannot easily manage a foreign asset if you somehow default. You could, however, use any of the property you own here to finance a purchase over there as a bit of a workaround.

For example, you might refinance or get a home equity loan on your Australian house, then use those funds to buy the overseas property. If you do this, your borrowing capacity is still determined by your Aussie financials, since it’s your local property and income securing the debt.

Overseas Properties

Alternatively, you might seek a mortgage from a lender in the country where you’re buying, or use an international bank that caters to cross-border buyers. Some global banks (like HSBC) operate in multiple countries and may lend to Australians for overseas purchases.

These foreign loans will still examine your income and debts, much like an Australian loan, but just keep in mind that you might face different terms. Often non-resident buyers need a larger deposit when buying abroad (sometimes more than 20%), and local rules can affect how much you can borrow.

No matter where you buy, you’ll need to show that you can comfortably service the loan with your income and assets. The reality is that it’s going to take a bit more effort to finance an overseas property, but plenty of Australians do it successfully with the right planning and lender support.

How Upscore Can Help

Upscore’s Finance Passport lets you get in contact with local lenders when you’re buying property overseas. You’ll also be able to compare different loan offers and don’t have to pay a thing – we earn our fees from lenders, so it’s at no cost to you.

What Do They Look For in a House Valuation?

Whenever one takes out a mortgage in Australia, lenders request a property valuation. This aids them in estimating the property’s value, lessening their risk in case any problem arises with the loan.

Valuers – who are professionally qualified – assess a range of factors in deciding a property’s market value. However, what exactly do they search for?

In this article, we unscramble the most important factors that have an impact on a valuer’s conclusion, so that you can understand and know in advance and best prepare for it.

1. Location, Location, Location

Valuers first and most prominently assess a property’s environment. Location is one of real estate’s biggest value drivers in Australia. Any property in a preferred location with access to public transport, schools, shops, and such conveniences will have a high valuation placed on it.

Customers pay a premium for an easier location near city centres and seaside locations because they value ease and lifestyle.

A valuer will assess the suburb’s:

Reputation
Historical Growth Performance
Nearby Government Development Planning
Any Future Contribution Towards Development

If a suburb recently improved, say, with new infrastructure, retail development, etc., then a positive valuation will follow in most cases. On the other hand, an inconvenient location, one with high crime and fewer conveniences, can shave off overall value.

Action point: When speaking with potential lenders and valuers, mention your property’s locational advantages. For example, a new planned tram stop, a new big store, or similar positive developments in your locality can boost both short-term and long-term property values.

2. Land Size and Zoning

Land size affects a home’s potential for future development and expansions. In Australia, bigger blocks are often prized for their flexibility. Some buyers want to add a granny flat, subdivide, or create an outdoor entertaining space. Valuers factor that in when deciding the property’s worth.

Zoning restrictions also matter. Different council zones permit different kinds of buildings. A property in a residential growth zone, for instance, might command a higher valuation because it offers more options for dual occupancy or multi-unit development.

Action point: Verify your council’s zoning guidelines and note any upcoming changes. If your property has potential for further building, make sure the valuer knows. This detail can boost your valuation if a future buyer sees potential beyond the existing structure.

3. Property Condition

Valuers walk through the property – both inside and outside – to gauge its condition. They note structural issues, visible defects, and overall maintenance. Big red flags include cracks in the walls, leaks, faulty wiring, and pest damage. If the property appears poorly maintained, valuers often subtract from the overall estimate.

Simple cosmetic updates, like fresh paint, polished floors, or tidy landscaping, can improve first impressions.

While a value doesn’t dive deep into your home’s style preferences, they do consider the general presentation. A neat, well-cared-for property sends a strong signal that you’ve invested time and resources into maintaining it.

Action point: Address any minor repairs before the valuation. Patch up cracks, fix leaks, trim the garden, and ensure everything looks clean and well-maintained. These basic steps can make a surprising difference.

4. Age and Building Style

Australian homes vary from classic Queenslanders and Federation cottages to modern builds and mid-century designs. The property’s age and architectural style influence its value in different ways.

Heritage-listed homes can command a high price if they’ve been well-preserved and sit in a sought-after location. However, they can also carry extra maintenance or renovation constraints, which might deter some buyers.

Contemporary homes with open-plan layouts, energy-efficient features, and quality finishes often score highly because they require fewer updates.

A value assesses how well an older property competes with more modern offerings. If your older home has a unique character and has been renovated to meet current standards, that often enhances its appeal.

Action point: Emphasize any upgrades that modernize an older home. If you’ve updated wiring, installed energy-efficient windows, or redone the kitchen, mention these features. They show that the property aligns with modern living standards.

5. Size and Configuration

Valuers look at the total floor area and how the living spaces flow. Open-plan layouts that make efficient use of space tend to hold more value than cramped, segmented designs. They also consider bedroom and bathroom counts.

In Australian markets, homes with three or more bedrooms often attract families and command a stronger resale value.

Functional spaces, such as a dedicated laundry room or secure parking, can add value. Storage solutions, flexible layouts, and multipurpose areas – like a study nook – can also make a difference. A valuer isn’t there to judge your furniture or décor, but they pay attention to whether the home’s design suits its size and meets modern buyer preferences.

Action point: If you’ve made clever adjustments to increase usable space – like adding a built-in wardrobe or converting a spare room into a home office – point that out. These improvements can set your property apart from others of similar size.

6. Renovation and Addings

Valuers weigh the impact of renovations on a property’s market worth. High-quality kitchen and bathroom upgrades often produce the biggest boosts because these rooms cost the most to remodel.

Adding a second bathroom, refreshing appliances, or installing custom cabinetry can elevate a property’s value beyond others in the same neighbourhood.

Valuers also assess the materials used and the workmanship involved. A half-finished or poor-quality renovation may hinder a property’s value more than no renovation at all.

Action point: Keep records of renovation costs, receipts, and any relevant warranties. These documents back up your claim that the upgrades are valuable and high quality. Valuers appreciate clear evidence of improvements, and so do potential buyers.

7. Outdoor Spaces and Amenities

Outdoor living is a big draw in Australia and for family buyers and social butterflies in general. Outdoor decking, patios, a tidy garden, and a pool and spa can make a property’s value in its value perceived. That being said, pools have maintenance expenses, and not everyone wants one.

Valuers weigh the positives (lifestyle, aesthetics) against the possible downsides (ongoing upkeep, safety regulations).

Sheds, garages, and carports also matter, especially if street parking is limited. Secure off-street parking can sometimes raise a valuation, particularly in urban areas where space is at a premium.

Action point: Highlight the functionality of your outdoor space. If you have a well-maintained lawn, fruit trees, or an undercover entertaining area, make sure the valuer sees their appeal.

8. Comparable Sales

A valuer doesn’t just rely on your property in isolation. They also check recent sales of comparable homes in your area. They look for similarities in land size, property features, condition, and layout. By matching up several “like-for-like” sales, they arrive at a fair market estimate.

Action point: Stay informed about what’s selling in your area and for how much. If you know of a property similar to yours that sold for a strong price, let the valuer know. They’ll decide how relevant that sale is, but it can help them interpret the local market.

Conclusion

Valuers evaluate a residence using location, property size, property state, improvements, the general state of the marketplace, and current similar sales. They combine these factors to form a well-researched estimate of market value.

There’s no controlling for everything – like your marketplace’s overall state of affairs, for instance, and a range of sales in your region recently – but with your property in tip-top shape and presented in its best form, your valuer will have an easier job in estimating your property’s value.

Our Finance Passport Can Help

Whether you’re gearing up for a valuation in Australia or exploring property opportunities overseas, Upscore’s Finance Passport helps you compare top mortgage deals across borders – all in one free, easy-to-use platform.

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What Does a Mortgage Broker Do?

A mortgage is one of life’s biggest financial outlays for most Australians. Regardless of your life stage – purchasing your first property or expanding your portfolio – you’ll have a wealth of options when choosing a loan. Lenders have plenty of terms, rates, and structures, and getting through them can become a nightmare.

Here’s when a mortgage broker comes in useful. They take care of everything for you, choosing a loan product that will best suit your financial objectives, processing your application, and bargaining your best price.

In this article, you’ll understand their work, and how and why, they can become part of Australia’s mortgage marketplace.

The Role of a Mortgage Broker

A mortgage broker is an intermediary between a borrower and a variety of potential lenders. Mortgage brokers are trained professionals with a strong concern for your individual financial circumstances, including your:

Earnings and Debts
Credit Record
Long-Term Objectives

Once they have a full picture of your requirements, they access a variety of lenders, sometimes including big banks, country branches, and non-bank lenders, and source options for your requirements.

Mortgage brokers search through interest rates, terms, and fee structures in search of your most applicable options, and then present them for your consideration in simple terms, including a rundown of both positive and negative factors.

Brokers remain with you from application to settlement, reporting at each stage and guiding you through any hiccups in between. Their service spares your time and simplifies the process – especially if you’re not familiar with the mortgage industry or you have complex financial needs.

Step-by-Step Mortgage Broker Process

Mortgage broking is a series of actions that, in most cases, replicate actions that you could just do yourself. But, with a broker, actions become a no-brainer, with no uncertainty about documents, timelines, and lenders’ requirements.

Initial Consultation

In your first conversation – most times over the phone, sometimes via the Internet or face-to-face – you discuss your property aspirations, your financial position, and your concerns. The broker will ask about your salary, assets, loans, and how much you want to borrow. In case you’re unsure about any of that, they’ll detail how to make an estimate.

Document Gathering

Once you’ve agreed to go forward, your broker will request supporting documents, such as:

Payslips
Bank Statements
Tax Returns (for self-employed people)
Proof of Savings

They’ll verify your identity and possibly search your credit file initially to evaluate your lending capacity.

Comparing Loan Products

The broker, with your information in hand, accesses a computerised database – an aggregator platform – and identifies lenders and products for your needs. Comparing interest rates, fee structures, offset facilities, and packages under consideration, they develop a shortlist, often with a preferred recommendation based on their knowledge of each lender’s acceptance criteria and the overall features of the loan.

Application Submission

Once you have a product in mind, your broker arranges and submits your application to your preferred lender. All documents and application forms are collected and completed for them. You sign and review the documents, and your broker submits them for credit checking.

Remember, for an extensive range of lenders and mortgage options to choose from when looking to buy a house overseas, Upscore’s FinancePassport can streamline the process for you.

Lender Appraisal & Approval

The lender processes your application, reviews your credit report, and possibly seeks additional documentation. In case of any complications, your broker works them out for you in a timely manner. Once an approval (subject to, or outright approval) is received, your broker informs you immediately.

Settlement

Once approved, your lender will value your property (should you have one in mind), and your conveyancer or solicitor will arrange for settlement. Your mortgage broker looks out for your best interests, explaining your loan terms, settlement date, and what comes afterwards. On settlement, funds go through to your seller, and you become a property owner!

Post-Settlement Assistance

A good mortgage broker doesn’t stop working for you when you settle. They review your circumstances regularly to make your current loan best for your current circumstances, refer you for refinancing when your interest rate drops, and act as a go-to contact in case of any queries.

How Aussie Homebuyers Can Benefit from a Broker

Australian property values vary regularly, and lending policies can vary with them. Home buyers must navigate variable and changing interest rates, variable and fixed interest rates, and the many types of mortgages available in the marketplace. Mortgage brokers sort through these for them.

Mortgage brokers’ in-depth familiarity with Australia’s lending environment, including the big four banks and many smaller lenders, puts a full picture together that can become challenging for an individual to gain access to alone

Brokers also coordinate most of the administration, allowing your free time for whatever else is scheduled. Life doesn’t stand still when you apply for a mortgage, and having a seasoned expert with in-depth familiarity with each phase of lending can remove a significant burden.

For first-time buyers who don’t have an eye for detail for forms in a home loan, or for seasoned investors with a portfolio of a dozen and a preference for a best-fit bargain, a broker can make a significant difference.

Australian Rules and Credentials

Australian mortgage brokers must have an Australian Credit Licence (ACL) or work under a Credit Representative under someone else’s ACL. On top of that, they must:

Complete Specialist Training
Adhere to Continuing Professional Development Requirements
Adhere to Responsible Lending Rules

You’ll most likely view your broker as a member of the Mortgage & Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA). These two groups have high ethics and professionalism requirements for their memberships, and choosing a broker with one of these memberships can make you feel a lot safer.

Australian Government supervision, through ASIC (Australian Securities and Investments Commission), watches over its registrants with an eye for putting your best interests first.

This means your broker must present your alternatives with your best interest requirements in mind, not necessarily with a view to providing high-commission alternatives.

Common Misconceptions About Mortgage Brokers

Myth #1: ‘Brokers Are Merely Middlemen’

Brokers don’t simply pass your documents for your file to pass through. Brokers work for you, researching lenders, explaining your alternatives, and bargaining over your fee and interest.

Myth #2: ‘Brokers Only Have a Few Lenders’

Good brokers have numerous banks and lending organisations in their panels. If a broker’s panels make you nervous, don’t have any hesitation in asking about them.

Myth #3: ‘You Can’t Trust a Broker’s Recommendations’

Laws for protecting consumers have a function. Brokers owe a duty to make a recommendation for a loan that will serve your purpose. You can even review and refer to your family and friends for tips in choosing a broker.

Myth #4: ‘Using a Broker Harms Your Credit Rating’

Too many queries about your credit in a timeframe can hurt your rating, but a reliable broker keeps them in moderation. They introduce you to lenders most likely to grant your profile.

Myth #5: ‘You Don’t Need a Broker If You Know the Market’

Although you have researched for countless hours, a broker can see through information that you might not have seen. Brokers monitor updates and new information about lenders and policies, and can therefore detect the best deals first.

Conclusion

A mortgage broker is important to helping Australians get the correct home loan for their circumstances. Brokers remove tension in searching for lenders, comparing offerings, and converting complex terms.

Their ultimate goal is to refer you to an ideal loan, make paperwork simple for you, and provide permits for any part of buying a residence, such as preparing inspections or searching for your ideal location.

About Upscore 10

Account & App 6

Advice 7

Buying Property Abroad 10