Blog How to get more treat than trick with your home loan

How to get more treat than trick with your home loan

20 October 2020
How to get more treat than trick with your home loan

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The Reserve Bank may not have cut rates in October but that doesn’t mean you can’t get a bag of treats when it comes to your home loan.

If you’re thinking about taking out a home loan or you’re refinancing, here are some treats and tricks to keep an eye out for.


An offset account

An offset account is a great way to pay off your home loan faster. If you have an offset account linked to your home loan, every dollar you put into it is ‘offset’ against the balance of your loan and you only have to pay interest on the difference. It’s basically a turbo charged savings account.

As long as you keep a reasonable amount of savings in your offset account, you’ll pay less interest over the life of your loan. This is why it pays (literally) to get your salary paid into your offset account and then you can use it like a savings or transaction account.

Let's say you have a $400,000 loan with a 2.47% p.a. interest rate over 30 years. If you start off with an offset balance of $10,000 and make a $1,000 deposit into the account every month, you could save a whopping $88,000 in interest and shave almost 15 years off the life of your loan. Almost sounds too good to be true right? Well, it’s not and if you want to find out how much you could save with an offset account, check out our offset calculator.

A lender with no fees

Don’t settle for a lender that charges exorbitant ongoing fees. These days, lenders are fighting hard to compete for your business and there are plenty of lenders out there, like, who charge no ongoing fees on their home loans.

Having zero ongoing fees means potentially thousands of dollars back in your pocket and you could pay off your loan quicker too.

Fast approval times with an online lender

Approval times can vary hugely depending on the lender, but generally speaking the approval times for a standard home loan is between three and five days.

Instead of lining up at the bank to apply for a home loan (what is this, 1985?), you could save yourself some time and apply online. offers a fast online pre-approval process so you can quickly get an idea of what type of properties you can afford to buy. Getting through the pre-approval stage will also save you time later on in the home loan approval process.


Lenders Mortgage Insurance

Ah, the dreaded Lenders Mortgage Insurance. It’s like the redskins at the bottom of your Halloween bag of lollies that no one wants.

If you don’t already know what it is, Lenders Mortgage Insurance (LMI) is an additional cost that you’ll have to pay if you don’t have a 20% deposit saved. Because you’re borrowing more than 80% of the value of the property, LMI is an additional upfront cost you have to pay that protects the lender in case you can’t repay your loan.

It’s easy to think of LMI as only benefitting the lender but it also kind of benefits you in that it allows you to get a mortgage without having a big 20% deposit saved up. But it can also be a pretty big price to pay and it isn’t refundable either, so it may be pay to be patient and save up longer to reach that 20% goal.

Credit score

Like it or not, your credit score will impact your ability to get a home loan so it’s important to make sure it’s in tip top condition before applying for a loan. If you apply for a loan and get knocked back because your credit score is bad, this information will go on your credit report and further impact your ability to get a loan.

To avoid this, you can check your credit score for free online and take steps now, like paying off debts on time, to get your credit score back in the good books.

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