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Please see some of the most frequently asked questions we get asked. If you cannot find what you are looking for or have more questions, please feel free to contact us.

What’s the difference between fixed and variable rates?

A fixed interest rate will not change during the fixed period. During the fixed period the borrower knows their repayments will remain unchanged. A fixed rate loan is advantageous if variable interest rates rise. When variable interest rates rise, a borrower with a fixed interest rate is relatively better off because their rate will remain unchanged.

A variable home loan interest rate moves up and down with market interest rates. One of the determinants of variable home loan interest rates is the cash rate set by the Reserve Bank of Australia. When the Reserve Bank alters the official cash rate, most variable home loan interest rates change by a similar amount, however it is important to note that there are many other factors that affect your interest rate.

Conversely if interest rates fall a borrower with a fixed interest rate is relatively worse off because they do not benefit from the fall in variable rates.

What is redraw?

Redraw is a feature which allows you to withdraw the extra money you’ve paid into your home loan. That is, the extra money you have paid in addition to your scheduled repayments.

You can redraw as often as you like, if you have made additional repayments over and above your scheduled repayments.

How much deposit will I need to buy a house?

While you can get a loan with as little as 5 per cent deposit, it’s not the most advisable way to enter the home loan market.

At Adelaide Home Loans we have access to lenders where you can borrow 105% of the value of the property. These types of loans are called family guarantee loans. If you have a family member who has a property with equity and is willing to help this may be a good option to get your foot in the door of the property market.

A deposit of 20 per cent or more is ideal as it’s typically the amount a lender sees as ‘safe’. Being a safe borrower is an advantageous position to be in as you’ll have a range of lenders to pick from, with some likely to offer up a lower interest rate as a reward. Additionally, a deposit of over 20 per cent usually eliminates the need for lender’s mortgage insurance (LMI) which can add thousands to the cost of buying your home.

Can I switch between a fixed rate and a variable rate?

Yes. You can change from a fixed rate to a variable rate, or vice versa, at any time. If you switch from a fixed rate loan, you may need to pay an Administration Fee and an Early Repayment Adjustment.

At the end of a fixed rate period your loan will automatically move to the variable rate (at no cost), or you can switch to another set period.

What is a hard-to-get loan?

All banks have certain lending criteria so when you don’t fit the criteria of a major bank, it can be hard to know where to go from there. This is where our hard-to-get home loan specialists come in. Just because your situation may not fit their policies does not mean you can’t get into your dream home! We are here to look at your situation and find a lender which fits you. This can include bad credit, self-employed, low-doc (low documentation) or unusual/irregular income.

What if I’m self-employed?

While many lenders require you to provide PAYG summaries to prove your income and employment, there are specific loans for self-employed borrowers. These are known as low doc or alt doc loans. Low doc loans allow self-employed borrowers to provide alternative forms of documentation to prove their income. These can include BAS statements, notices of assessment or accountant’s letters.