Mortgage Calculators
Have you tried our online mortgage calculators?In developing Smart Search Finance, I thought that providing unique mortgage calculators that most other sites do not offer would be an excellent resource. We do have mortgage repayment calculators , extra repayment calculators and how much you can borrow calculators but this is where the similarity ends.
Listed below are calculators that are found only on a few sites if not any.
100% offset mortgage calculator- shows the advantages of using an offset account. Calculates years and interest savings. You can also compare two loans side by side.
Comparison Rate Calculator – calculates the real cost of a loan based on the loan amount. It adds fees to the quoted interest rate to give a real or actual rate. You can compare two loans side by side and shows the total cost of the loan for each year up to 30 years. Our most popular loan comparison tool.
Refinance Calculator - to be used after reading the refinancing home loan article, this calculator shows the actual cost of refinancing and how many months or years it will take to start benefiting from refinancing your loan.
Interest Only Mortgage Calculator – calculates interest only repayments. Shows total costs over the interest only period and monthly repayments.
Online Budget Calculator - this calculates how much you can afford to pay a home loan by taking into account all your expenses. We also have an excel version on the site.
Loan Affordability Calculator - to be used in conjuction with the budget calculator. You simply input what you realistically can afford to pay each month for a mortgage, the current interest rate and it calculates how much you can realistically borrow. This is a more accurate assessment than other calculators that make assumptions about your living expenses.
If you would like us to develop other calculators to help with your mortgage search please contact us or leave a comment.
Mortgage Exit Fees – Early Exit Fees From Banks and Lenders
I often get asked what are the early exit fees for home and investment loans. With some lenders charging up to 2% for exiting a loan early it is important to read the fine print before signing on the dotted line.
Below are the exit fees you will pay for the following lenders -
Commonwealth Bank – $700 in the first 4 years
Westpac- $800 in the first 4 years
ANZ – $700 in the first 4 years
NAB – $900 in the first 4 years
Citi Bank – First year = $1500, 2nd year = $1,200 a the 3rd year = $1,000
AMP – $1,000 in the first 4 years
ING Home Loans – Year 1 = $1,500, Year 2 = $1,050, Year 3 = $700, Year 4 = $350
Suncorp – $1,400 to $800 in the first 4 years
St George – $1,000 first 3 years
RAMS – 1% of the original loan amount in the first 3 years
Bank West – Nil
The above fees do not include discharge of mortgage fees or break costs if exiting a fixed rate loan early. Most lenders charge between $200 and $500 to discharge the mortgage. Breaking a fixed rate early varies significantly as it is calculated using the current interest rate at the time and the term remaining on the current contract. Usually there are zero exit fees if the wholesale fixed rate is higher than the contracted fixed rate.
If you have any other examples or have encountered excessive exit fees please make a comment below.
100% Home Loans – The No Deposit Mortgage is a Dying Breed
Since the current mortgage crisis lenders have been tightening their policies and the number of 100% or no deposit home loans are slowly being eradicated from the Australian mortgage market.
A year ago many lenders were offering no deposit home loans. Today there are only two – RAMS and St George. RAMS home loans have many variable and fixed rate products that allow you to borrow 100% of the properties value while St George have their own no deposit loans separate from their other products. You can view the latest interest rates at RAMS Home Loans and St George Home Loans.
The title of “no deposit home loans” is a bit of a misstruth. Potential borrowers believe that they do not need a deposit but this is far from the truth. You will need to take into account the following costs when making a purchase;
Stamp Duty – Up to 5% of the properties value
Lenders Mortgage Insurance – Up to 3% to 3.5%
Legal Fees – $600 to $1500
Establishment Fees – $0 to $1,000 depending on the lender
If you were to purchase a $400,000 home then you could be up for $32,000 in additional costs.
The only exceptions to this are
First Home Buyers – receive a grant from the government and reduce the stamp duty costs.
Building a New Home – where stamp duty is only calculated on the cost of the land.
It is anyone’s guess whether RAMS and St George will continue to offer these loans in the future. However, the trend is that many lenders are moving away from this type of lending and it looks like they will be removed from the mortgage market all together.
If you would like help in acquiring a no deposit home loan we can assist with all the calculation by simply contacting us or providing information on our online quote form.
Mortgage Lenders Tactics – How It Costs You!
I have been in the mortgage industry for a number of years now and the tactics lenders employ make me think twice about which are the most reputable.
I would like to share some of my insights on how the banks and other lenders manipulate interest rates to gain your business and cost you more in interest repayments than you initially thought when you signed on the dotted line.
I know the old premise of “buyer beware” and “it is all stated in the contract” but I do not think the tactics used are all that ethical
Below I have outlined some of the tactics you should be aware of before considering or signing a mortgage offer.
1. Introductory Interest Rates – This tactic attracts potential borrowers to the low initial rate compared to other lenders variable rates. All to often these products offer a great interest rate for the first year or two but usually work out to be more expensive after the introductory period has ended. Switching loan products or refinancing after the introductory term has expired ends up being the same if not costing Also, if you forget to switch or refinance then you can expect to pay significantly more for your mortgage.
2. Promotional Products- Often lenders will offer a heavily discounted interest rate on a particular loan product for a limited time only to attract new business. The products are sold as a full featured variable rate home loan – not an introductory rate. This tactic often works with brokers recommending and borrowers flocking to this product. After a year or so the lender increases the variable rate on that product and eventually borrowers end up paying the same rate as everyone else.
For example, a lender might offer a full featured home loan product at 0.25% less than all its competitors. Let us say they were offering a rate at 6.25% while the major banks and other lenders were offering rates around 6.50% to 6.60%. After a year so the lender increases the interest rate. Effectively, the borrower pays the same if not more for their current home loan compared to other lenders who consistently offer the same interest rate to the public.
3. Website Interest Rate Comparison – On many smaller lender websites I often see these lenders favourably compare their products to the major banks and other lenders. “Save over $70,000 compared to Commonwealth Banks (or any other banks) standard variable rate.” However, they do not mention other loan products offered by the bank that are more competitive than the banks standard variable rate. Personally, I do not know many borrowers who pay the standard rate for their home loans.
4. Delaying Interest Rate Rises - Back in 2007/08 when interest rates were rising, I noticed some lenders delayed passing on the interest rate rise by more than a month some times up to 3 months. You might think this is good but it unfairly conned potential borrowers to make enquiries and perhaps taking out a loan with this lender. Later they find out that their interest rate is no more competitive if not more expensive than other lenders products.
5. Delaying Interest Rate Cuts- Whenever there is an interest rate cut announced by the Reserve Bank of Australia I feel that 1 or 2 weeks is a fair time period for lenders to pass on the rate cut. After a 2 week period I feel the lender is profiteering from their clients. I have heard that some lenders took up to 2 months to pass on an interest rate cut. For example, if you have a $300,000 home loan and your lender took 4 weeks to pass on a 0.25% interest rate cut you would effectively paying an extra $62. Multiply this by all their customers loans and that lender has made a healthy profit.
6. High Exit Fees – Most banks charge between $700 and $1,000 to exit the mortgage within 3 to 4 years. Some lenders charge a percentage of the original loan amount for exiting the loan with 5 years. This can be an expensive exercise if the loan is paid out or refinance. For example some lenders charged 1.5% exit fee during the first 5 years. On a $300,000 loan the exit fee would be $4,500.
This does not cover all the tactics lenders use but are some of the ones I have noticed. If you have any other examples I would love to hear from you.
Current Home and Investment Loan Specials
Lender specials are usually offered for a limited time only and differ from their typical offerings.
Commonwealth Bank Home and Investment Loans
$0 Establishment Fee and Loan Service Fee for the life of the loan on our 3 Yr Special Rate Saver on new borrowings only. Saving $600 upfront and $8 monthly
$0 Application Fee Basic Variable Loan. Saving $345 in application fees
Fixed Rate Application Fee will be waived where borrowing 80% or less of the properties value
0.15% off Fixed Rates when applying for the Mortgage Advantage Package For a Limited Time.
Available for new applications and existing customers for borrowings of $150K or more.
Introductory 1 Year Fixed Rate, Low Doc and No Deposit Home Loans are not eligible.
This discount is not available on Interest in Advance Loans.Pre-approvals are not eligible for the 0.15% p.a. discount
For the month of January 2009 only, RAMS is waiving the application fee for all new applications of $150,000 or more. Saving $395 in upfront fees this offer is available across our entire range of full doc home loans, including the popular RAMS Rate Relief home loan.
Customers will receive 0.20% discount on all fixed rate loans under the Premier Advantage Package. The discount will be available on the following loans:
Fixed Options Home/Investment Property Loan
Fixed Options Home/Investment Property – Low Doc
This not applicable to the existing fixed rate loans, unless the customer is re-fixing their loan when their current fixed rate term expires or the customer breaks their fixed rate term.
To find out more about these specials or a home or investment loan suitable to your lending needs please contact us or submit a mortgage enquiry.