NEXT HOME BUYER MANUAL...pre-approval will stipulate that he needs the money from selling his...

SEVEN STRATEGIES FOR BUYING YOUR NEXT HOME IN NSW

2016 Edition

NEXT HOME BUYER MANUAL

27 STRATEGIES FOR BUYING YOUR NEXT HOME IN NSW l

John Ruddick’s seven strategies for buying your next home in NSW.

PREFACEIf you need to borrow money to buy a residential property in New South Wales, I want to be your mortgage broker.

This manual is written for those of you who are ‘next home buyers’ in NSW. That is, you currently own a property, and want to buy your next owner-occupied property.

You may be selling your existing home, or retaining it as an investment property. But in either case, this manual assumes you need to borrow money for that ‘next home’ purchase.

There are countless reasons why you might want to move home. Your family may be growing—or shrinking. Your financial circumstances may have changed. You may want to live closer to a school or workplace. Or you might simply want a change of scenery or new neighbours.

Next home buying is the most common property transaction. But the process does have some complexity, and without a clear strategy it can become a frustrating experience.

This manual spells out the process, along with the advantages and disadvantages of seven different strategies to buying your next home. Adopting the right strategy helps eliminate risk and increases your chances of buying the right property at a good price—and with less stress.

Every individual and every mortgage application is unique. Since 2001 my passion has been to help borrowers properly structure their mortgage debt and, just as importantly, help them understand the strategy behind the structure.

A good way to start is to contact my office and make an appointment to discuss your circumstances. Even if you think you won’t be buying for a year or more, it’s still worth having a general discussion now.

The first step is to map out a plan, and then get pre-approval for finance around that plan. Once the finance is in place, you can begin the journey from your current home to your new home.

To apply for pre-approval, you can either contact a lender directly or speak to a mortgage broker. In recent years, more than half of all Australian mortgages have been taken out with the help of mortgage brokers.

Being a broker means I’m a mortgage specialist who can introduce you to products from many lenders, including all the major banks. And, like most mortgage brokers, I typically won’t charge you any fees.

Feel free to get in touch with me:

• by phone: (02) 9955 1176 or 0412 129512• by email: [email protected] • at my office: Level 6/122 Arthur Street, North Sydney, 2060.

1 Sell, rent, buy 5

2 Sell and buy with

simultaneous settlements 7

3 Bridging finance 8

4 An alternative to bridging finance 9

5 Bridging finance with no end debt 10

6 Retain home as an investment property 11

7 Buying a home when you own an

investment property 12

CONTENTS

2016 Edition

3 l 7 STRATEGIES FOR BUYING YOUR NEXT HOME IN NSW

Ninety percent of all millionaires become so through owning real estate.Andrew Carnegie

‘Disclaimer

The information in this booklet is accurate as at June 2016. However, lenders and governments frequently change policies, and every mortgage application is unique.

The information provided here is a guide only. You should not make any decisions about your mortgage until you have discussed your personal financial circumstances with a professional.

‘


Over the years I’ve worked closely with several hundred next home buyers. And in that time I’ve learned that following these guidelines will put you in a much stronger position.

n Wear out some shoe leather looking at properties in the suburbs you‘re thinking of buying in. The more you look, the sharper you eye will be, and the better you can gauge a fair value for a property.

n Make sure you haven’t been late for any mortgage repayments in the past year. If you have, it will make lenders more hesitant in approving your next mortgage.

n If you need to sell your existing property, it’s important to get the best possible sale price. It may be worth getting quotes on what improvements you can make to increase its value, and what they will cost. Putting in a new bathroom, a new kitchen or even some new carpet or paint may increase your home’s sale price by more than what you spend. And if you’re planning to convert your existing home into an investment property, these improvements will probably increase your rental return.

n Think about the timing of your sale. The property market is typically busier in spring and summer than in winter. But that is not always the case—the winter of 2015 was as busy as any spring.

n If you’re selling and buying, be selective about the conveyancer/lawyer you engage. The transaction will be more complicated than when you bought your first home, and so will require more sound legal advice.

n When you bought your first home, you probably dealt with the vendor’s real estate agent. But if you’re going to sell your current property you need to choose your own real estate agent. It’s worthwhile inviting three or four agents around so you can discuss your plans and see which one is best suited to sell your property. While experience is usually a positive attribute, agents with less experience can sometimes bring more enthusiasm to the sales process and deliver a better result.

Sound preparation

Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming independent, for real estate is the basis of wealth.Theodore Roosevelt

‘‘


STRATEGY 1

There are two key legal milestones during the sale of a residential property in NSW:

1. The exchange of contracts

2. The settlement.

When a vendor (seller) has unconditionally agreed to sell a certain property at a certain price to a certain purchaser, they’ll sign the front page of the property’s contract for sale. At the same time, the purchaser will sign an identical version of the contract for sale. The two parties (via their legal representative or a real estate agent) will then each give their signed copy of the contract to the other party.

The buyer will also have paid a deposit—usually 5% or 10% of the purchase price.

This swapping of contracts is the first legal milestone, and is referred to as ‘the exchange of contracts’ (or simply ‘the exchange’). At this point the buyer has bought the property and has legal rights over it.

But they aren’t the registered legal owner yet. That happens at what’s known as ‘the settlement’. This is when the owner receives full payment for the sale and the buyer gets the keys to the front door. It’s also the day the mortgage starts accruing interest.

In NSW there’s typically a six-week (42-day) period between the exchange and the settlement. However, with the vendor’s consent this timing can be flexible.

Sell, rent, buyIf you’re planning on selling your home to buy the next one, your finance pre-approval will likely say the settlement of your current home needs to happen on or before the purchase date. They’ll probably lend you some of the purchase price of the new home, but you’ll need to contribute a cash deposit. And you won’t have that cash deposit until you’ve settled on your sale.

Let’s say Banjo has a home worth $1,000,000, and owes XYZ Bank $600,000. Banjo now wants to sell his current home, and buy another one for $1,500,000. After the selling costs and repaying XYZ Bank, Banjo expects to have around $375,000 after settlement of his current home. Taking into account stamp duty and other fees, Banjo will need around $1,572,000 to buy the new property.

Banjo will contribute his $375,000, and so he gets pre-approval from XYZ Bank for a loan of $1,197,000 (i.e. $1,572,000 minus $375,000). However, Banjo’s pre-approval will stipulate that he needs the money from selling his current house before he can settle on his new purchase. XYZ Bank is only lending him $1,197,000, and he needs $1,572,000 to settle on his new purchase.

Now, let’s say Banjo gets his pre-approval and puts his current house on the market. After four weeks no-one has put in an acceptable offer. But in the meantime Banjo finds his ‘perfect’ next home for $1,500,000, and exchanges contracts to buy it.

The person Banjo bought it from will typically expect to settle within six weeks of the exchange. But Banjo can’t settle on this one until he settles on his current home because he needs the $375,000 from the sale.

Banjo has created a real problem for himself. He’ll have to try and sell his current home at a fire sale price, which means he may not have enough to settle on his purchase. Worse still, his current home may not sell at all, and as a result he’ll have to default on the settlement of his purchase.

If a settlement date has already been agreed to, and Banjo can’t settle on that date, the vendor will very likely begin charging penalty interest. If Banjo can’t settle four weeks after the agreed settlement date, the sale will be cancelled and Banjo will have to not only forfeit his 10% deposit (even if he only paid a 5% deposit) but also pay the vendor other expenses incurred such as legal fees. And if the vendor subsequently sells the property to someone else for a lower price than Banjo agreed to, Banjo will need to refund the difference to vendor.

Clearly Banjo shouldn’t have exchanged contracts to buy the property without first having an exchanged contract to sell his current home.

continued on next page


Let’s say that on 1 March Banjo exchanged contracts to sell his current home for $1,000,000. Typically, he’ll need to settle six weeks later, and so Banjo will need to carefully plan where he’ll live after 12 April 2016 (the sale date), at least for the short-term as it’s unlikely he’ll find the ideal property within a week or two of his current home being exchanged. If he did, he could try to arrange a simultaneous settlement (see Strategy Two) by asking his purchaser for a slightly shorter settlement and/or his vendor for a slightly longer one.

However, it’s more likely that after the settlement of his home Banjo will need to find short-term accommodation while looking for his next home to buy. It could be with family, a serviced apartment or a standard residential lease.

If you have somewhere comfortable to live after selling your home, this strategy is the simplest.

Upsides

n There’s no rush to sell. (The chance of something going wrong tends to rise when people are in a hurry.)

n There’s no rush to buy. If you’re forced to buy a property quickly for a simultaneous settlement, you may regret not inspecting more properties in the long term.

Downsides

n The cost and hassle of two relocations—first from your current home into short-term accommodation, and then from there into your next home.

n In a rising property market, sale prices may rise while you’re renting. Conversely, if you think property prices will fall for a period it may be worth renting for a while.

STRATEGY 1 continuedSell, rent, buy

Owning a home is a keystone of wealth... both financial affluence and emotional security.Suze Orman

‘‘


STRATEGY 2

Ruby owns a property worth $600,000, and owes the XYZ Bank $350,000. She’s just had a big pay rise, and now wants to buy a bigger home for $1,000,000.

The first step will be for Ruby to get pre-approval for her new loan. Once it’s confirmed she can choose her real estate agent and legal representative to begin the process of selling her property.

Ruby gets pre-approval from the XYZ Bank to borrow around $800,000 for the $1,000,000 purchase. But her pre-approval has an important condition: She needs to have exchanged contracts to sell her current home before the $800,000 loan can be unconditionally approved. It will also state that she needs to settle on her sale either before or simultaneously with her purchase.

She doesn’t need to have actually settled on her current home to be unconditionally approved for the loan. But she does need to have exchanged contracts.

The XYZ Bank will assess the exchanged contract on her existing property, and consider the “sale price minus the existing home loan balance and associated fees” as good as money in the bank, providing the settlement for her sale occurs either before or simultaneously with the settlement for her purchase. This needs to happen because she won’t have the cash to settle her purchase until she’s settled on her sale.

Let’s say she puts her current property on the market, and exchanges contracts to sell on 1 March 2016 for $600,000. With the standard timing between exchange and settlement being six weeks, Ruby would typically settle

Sell and buy with simultaneous settlementson 12 April 2016. So Ruby can only seriously inspect other properties to buy from 1 March. And she’d only have a week or so to exchange on her purchase to make the settlement dates simultaneous.

Ruby wants to spend $1,000,000 on her next purchase—a substantial amount of money—and would be foolish to rush into a purchase. But she doesn’t want to move into short-term accommodation either. She’d much prefer to move out of her current home and into her next home on the same day. Ruby may be able to buy herself several more weeks to go hunting for her new home by taking a small but powerful step: Instructing her legal representative to include a clause in her contract for sale saying she wants “up to 12 weeks to settle”.

Having up to 12 weeks between the exchange and the settlement means she could exchange to sell on 1 March 2016 but have 12 weeks to move out of her home. Armed with her pre-approval (and the assurance her current home has been sold), she would have six to eight weeks to find a property, make an offer, get her loan approved and exchange to buy. All she’d need to do then is instruct her legal representative to have the two settlements occur on the same day. (With enough notice, most purchasers and vendors can accommodate small timing adjustments to their settlements so they occur on the same day.)

If the settlements for her sale and her purchase can’t occur simultaneously, the seller may let her rent her new home for a week or so until she can settle. That way she can move out of her former home and into her new home on the same day.

However, this isn’t something you should rely on. Some vendors will strictly rule out occupation of their property until you’ve settled on the purchase.

Upsides

n You only have to pack and move once.

n You have a bit more time to find your new property.

Downsides

n Despite buying yourself several weeks to find the right property, you still need a short-term accommodation backup plan. You don’t want to be buying a property that’s less than ideal just to avoid the hassle of short-term accommodation.

n Stating you want up to 12 weeks to settle in your contract may deter some potential buyers. However, in my experience most purchasers are usually flexible with the settlement date. In Ruby’s case, it would have been worth telling her real estate agent that while the contract for sale states she wants up to 12 weeks, it could be less than that.


STRATEGY 3

Imagine someone owns their home, and intends to sell it to help buy their next home. But before exchanging contracts to sell their current home, they find their perfect next home and simply must have it. They now want to exchange contracts to buy it, even though they haven’t sold their current home. Can they do it?

Possibly yes, with bridging finance.

With bridging finance, their lender will loan up to the entire purchase price plus stamp duty, etc. for their new home.

Bridging finance is becoming less popular with lenders, and they’re making it harder to be approved for this type of finance. Generally, bridging finance is only needed due to poor planning, and should be avoided. However, in some circumstances it can be justified.

Let’s say Yuko’s home is worth $800,000, and she owes the XYZ Bank $200,000. She’s been thinking about buying a more expensive home for some time, but recognises that to do so she’d need money from the sale of her existing home.

One Saturday morning she walks past an ‘Open for Inspection’ for the property she always thought was perfect for her. The real estate agent tells her the property will sell for $1,400,000, and that the auction is in just two weeks.

Yuko decides to drop everything and get the finance approved ASAP so she can exchange contracts to buy the property. She comes into my office later that morning, where I tell her she can’t exchange contracts on this purchase until she has an unconditional loan approval to do so. And the only way to get that unconditional approval (without an exchanged contract on her existing property) is with bridging finance.

Bridging financeBridging finance will let Yuko borrow the entire purchase price and associated costs. But she must agree to sell her existing property as soon as possible, and use the money from the sale (minus the mortgage on the existing property) to pay down the new debt she used to buy the new property.

There are two key terms with bridging finance—‘PEAK DEBT’ and ‘END DEBT’.

The ‘peak debt’ consists of the existing debt plus the loan used to buy the next home. In Yuko’s case it’s $200,000 + $1,465,000 … or $1,665,000 in total.

Yuko’s peak debt is secured by two properties—her former home (worth $800,000) and her new home (worth $1,400,000). So the value of the properties securing the $1,665,000 debt is $2,200,000. When Yuko sells her former home for $800,000, pays the selling costs of around $20,000, and repays her $200,000 loan to XYZ Bank, she’ll have $580,000 in cash.

XYZ Bank will insist she use that money to reduce the peak debt to $1,085,000. This amount of $1,085,000 is referred to as the ‘end debt’, and will be the ongoing mortgage.

So why do lenders dislike bridging finance? Because there’s more opportunity for something to go wrong.

Once Yuko has settled on her new purchase, she’ll have a debt of $1,665,000 that is accruing interest every day. Yuko doesn’t want to lease her former home to a tenant to help pay the high interest repayments because it could deter potential buyers. XYZ Bank has given her a deadline to sell her former home, and if it isn’t sold within that timeframe (usually between three and six months), the interest rate will rise significantly.

So Yuko is now under pressure to sell her former home … and bad luck seems to follow owners who have to sell their property quickly. The property market could go quiet, or a major dramatic event (such as a financial crisis or national convulsion) could come out of nowhere. Either way, that means fewer property buyers, and anyone who does want to buy her property may offer less than what Yuko assumed it was worth. The fact that she has to sell could also reach the market and attract the vultures.

For these reasons, some lenders simply don’t offer bridging finance anymore. And those who do insist on the borrower having a particularly large amount of equity in their current home so the ‘end debt’ will be manageable even if the property market does decline. Some lenders even insist they must have sufficient income to afford ‘peak debt’ repayments, which requires a very high income.

Upsides

n You can buy a property before selling your existing property.

n You have up to six months to sell your former home before being heavily penalised.

Downsides

n You’ll be paying interest on the ‘peak ‘debt’.

n You’ll be under pressure to sell.

n It may well lead to a lot of sleepless nights.


STRATEGY 4

If you have a lot of equity and a high income, you could structure your finance around a plan to buy the next property without giving the lender any commitment to selling your existing one. You can then sell it whenever you feel like it.

Some borrowers effectively arrange bridging finance by structuring the debt around the former home becoming an investment property. The lender will assume you’ll receive a rental income, and so your regular income won’t need to be as high. You can then settle on your purchase and see how you go at leasing the property.

If you secure a good tenant who pays a good rent, you may decide to retain your former home as a long-term investment property rather than selling it. Or you may settle on your new home, feel uncomfortable with the large new debt, and sell your former home promptly so you can use the sale proceeds to reduce your new mortgage.

You may even be able to claim an exception on capital gains tax for two residences held simultaneously for up to six months.

An alternative to bridging financeUpsides

n You can sell your former home whenever it suits you.

n You are in no rush to buy your next home.

n You may like the idea of owning an investment property.

Downsides

n Your future home loan will be significantly larger than what it would have been if you sold your former home and used the proceeds to reduce debt

n If you didn’t plan for it, you may have a small debt on your former home (and now investment property), and a large debt on your new one. If you have both a home loan and an investment loan, it’s worth structuring the debts so the investment debt is larger and the home loan debt is smaller (see Strategy 6).

Real estate investing, even on a very small scale, remains a tried and true means of building an individual’s cash flow and wealth.Robert Kiyosaki

‘‘


STRATEGY 5

This strategy is suitable for people who are downsizing, and is quite popular with retirees.

Let’s say Benny has a property worth $1,000,000, and owes the XYZ Bank $250,000. Now that Benny has retired, he wants to sell his current home, repay the $250,000 and buy a home for $500,000 so he can live debt-free.

Benny has two options.

Option one

He can put his current home on the market, and make an offer on another property as soon as he exchanges contracts. He won’t need to worry about applying for a new mortgage for his new purchase because his sale proceeds will easily cover the payment for his next home. But he does need to ensure the settlement for the sale occurs either before or simultaneously with the purchase settlement.

Option two

He can exchange contracts to buy the $500,000 home before he exchanges on the sale of his current property. To do that he’ll need his finance approved for around $522,000 so he can pay for the purchase, stamp duty and other costs. Once he sells his former home he can use the proceeds to pay out the short-term bridging finance.

As of 2016, one major lender offers a product for this very situation. The fees and interest rates are higher than usual, but it doesn’t really matter because it’s a short-term loan and so the lender won’t make much of a profit from the transaction.

Bridging finance with no end debtUpsides

n Because you don’t need to provide any evidence of income it’s a simple mortgage transaction.

n You can buy a property whenever a suitable one comes along.

n There’s no urgency to sell. (You’ll have around six months before being charged higher than usual interest.)

n You only have to pack and move once.

Downsides

n You may have to pay higher than usual fees and slightly higher interest rates.

Home purchases that are very highly leveraged or unaffordable subject the borrower and lender to a great deal of risk. Moreover, even in a strong economy, unforeseen life events and risks in local real estate markets make highly leveraged borrowers vulnerable.Ben Bernanke

‘‘


STRATEGY 6

Many first home buyers aspire to buy a bigger home one day, and convert their first property into a long-term investment property.

While this can be an effective wealth-building strategy, it needs careful planning. Too many people buy their second property, only to find out their first home isn’t a suitable investment property. Not because there’s anything wrong with it, but rather because of its mortgage structure.

A lot of borrowers get caught in this trap—especially those with excellent debt repayment records.

If you plan on buying a bigger home and converting your first home into an investment property you may want to pay interest-only repayments on your first home from the moment you buy the property.

This may seem counter-intuitive, but you can effectively pay off the debt by building up cash in your offset account.

An offset account is like a normal everyday bank account except:

n the balance of funds in the offset account is assumed to be deducted from your loan balance each day

n you are only charged interest on the loan balance minus the offset balance.

If someone has a debt of $900,000, but also has $400,000 in an offset account, they are only charged interest on $500,000 each day. Paying interest only (and not making any lump sum payments into the mortgage) won’t officially reduce your debt. But it will effectively reduce your debt because you’re increasing the cash in your offset.

Retain home as an investment propertyAnd when you’re ready to buy your bigger home you’ll have a big cash deposit, which means the future home will have a lower debt against it.

Let’s imagine Emma has just bought her first home for $500,000, having borrowed $450,000 from XYZ Bank. She’s happy to live there for the moment, but plans on buying another property for $1,000,000 in five years’ time, moving into the new property, and turning her current home into a long-term investment property.

Option one

Emma makes principal and interest repayments on her mortgage, and deposits lump sum payments into the mortgage when she gets her annual bonus. After five years she reduces her home loan to $100,000, but has no cash savings.

She then buys her next home for $1,000,000. Because she doesn’t have any saving she uses the equity in her former home (now an investment property) to borrow the entire purchase price plus the costs. Her new home loan has a balance of $1,045,000, which on top of her $100,000 ‘investment debt’ means she has a total debt of $1,145,000.

At some point Emma (or her accountant) will realise she’s better off selling the investment property, clearing the debt, and using the substantial remaining funds to reduce her home loan. And if she still wants to own an investment property, she’ll need to borrow 100% of the purchase price plus costs.

Option two

After buying her first home, Emma pays interest-only repayments on the mortgage and puts all the money she would have paid on the mortgage into an offset account. After five years she still has a home loan debt of $500,000 … but having $400,000 in cash in her offset account means she’s only paying interest on $100,000.

When Emma buys the bigger home, she uses the $400,000 in cash for the deposit and costs, and so only needs to borrow $645,000. She still has a total debt of $1,145,000 ($500,000 + $645,000). But there’s a much greater proportion of investment debt ($500,000) and a much lower proportion of home loan debt ($645,000).

At first, it may seem like both options deliver the same outcome. But option two is a much better option because Emma can claim the interest she pays on her investment debt as a tax deduction.

Important note: This strategy can only work if you maintain a strict financial discipline. If you’re an impulsive spender, or don’t keep credit card debt cleared, this may not be a good option for you.

Why? Because chances are you’ll spend the money accumulating in the offset account. And if that’s the case, you’re better off paying your first home loan with the usual principal and interest repayments than making interest-only payments but ending up with little savings to show for it.


STRATEGY 7

If your first property is an investment property, and you now want to buy a home, you have two options.

Option one

Sell your investment property, and use whatever money you have as a deposit on your next home. Before putting your investment property on the market, get a pre-approval subject to the sale of the investment property. Then put it on the market and sell it. Since you are not living in the property you do not have the hassle of worrying about two moves.

Option 2

Retain the investment property and buy an owner-occupied property. Ideally you’d follow the principles spelt out in the Strategy 6 (i.e. make interest-only payments and effectively pay the debt down via an offset account).

Buying a home when you own an investment property

Interest rates in Australiafrom 1996 to April 2016

Courtesy of the Reserve Bank of Australia


Handy hints for moving houseIf you’re moving house, here are some of the things you’ll need to do.

n Book a removalist well in advance, and ensure they have insurance to protect your belongings in the event of an accident.

n As soon as you know your new address and when you’ll be moving in, contact your utility providers—electricity, gas, phone, water, cable TV, etc.

n To make the move a bit easier, it might be worth making arrangements for children and pets to stay with family or friends overnight.

n Let your neighbours/strata body at both your current and future address know you’ll have a removalist truck so they won’t be disrupted.

n Start packing your belongings early, and pack smart. Things often go ‘missing’ during a move because no-one knows where they are stored.

n Redirect your mail for a year, and whenever redirected mail arrives let the sender know your new address.

n Make sure you pay any outstanding utility bills. People often end up with a black mark against their name because a phone bill they haven’t paid keeps being sent to an old address. If you’re not careful, it could derail future mortgage applications.

n Change your enrolment with the Australian Electoral Commission.

n And finally, enjoy spending your first evening in your new home.

Copyright © 2016 by John Ruddick Home Loans. All rights reserved. This book or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher.

$300,000 $500,000 $700,000 $900,000 $1,200,000 $1,600,000 $1,800,000 $2,000,000

3.30% $1,314 $2,190 $3,066 $3,942 $5,255 $7,007 $7,883 $8,759

3.40% $1,330 $2,217 $3,104 $3,991 $5,322 $7,096 $7,983 $8,870

3.50% $1,347 $2,245 $3,143 $4,041 $5,389 $7,185 $8,083 $8,981

3.60% $1,364 $2,273 $3,183 $4,092 $5,456 $7,274 $8,184 $9,093

3.70% $1,381 $2,301 $3,222 $4,143 $5,523 $7,365 $8,285 $9,206

3.80% $1,398 $2,330 $3,262 $4,194 $5,591 $7,455 $8,387 $9,319

3.90% $1,415 $2,358 $3,302 $4,245 $5,660 $7,547 $8,490 $9,433

4.00% $1,432 $2,387 $3,342 $4,297 $5,729 $7,639 $8,593 $9,548

4.10% $1,450 $2,416 $3,382 $4,349 $5,798 $7,731 $8,698 $9,664

4.20% $1,467 $2,445 $3,423 $4,401 $5,868 $7,824 $8,802 $9,780

4.30% $1,485 $2,474 $3,464 $4,454 $5,938 $7,918 $8,908 $9,897

4.40% $1,502 $2,504 $3,505 $4,507 $6,009 $8,012 $9,014 $10,015

4.50% $1,520 $2,533 $3,547 $4,560 $6,080 $8,107 $9,120 $10,134

4.60% $1,538 $2,563 $3,589 $4,614 $6,152 $8,202 $9,228 $10,253

4.70% $1,556 $2,593 $3,630 $4,668 $6,224 $8,298 $9,335 $10,373

4.80% $1,574 $2,623 $3,673 $4,722 $6,296 $8,395 $9,444 $10,493

4.90% $1,592 $2,654 $3,715 $4,777 $6,369 $8,492 $9,553 $10,615

5.00% $1,610 $2,684 $3,758 $4,831 $6,442 $8,589 $9,663 $10,736

5.10% $1,629 $2,715 $3,801 $4,887 $6,515 $8,687 $9,773 $10,859

5.20% $1,647 $2,746 $3,844 $4,942 $6,589 $8,786 $9,884 $10,983

5.30% $1,666 $2,777 $3,887 $4,998 $6,664 $8,885 $9,995 $11,106

5.40% $1,685 $2,808 $3,931 $5,054 $6,738 $8,984 $10,108 $11,231

5.50% $1,703 $2,839 $3,975 $5,110 $6,813 $9,085 $10,220 $11,356

5.60% $1,722 $2,870 $4,019 $5,167 $6,889 $9,185 $10,333 $11,482

5.70% $1,741 $2,902 $4,063 $5,224 $6,965 $9,286 $10,447 $11,608

5.80% $1,760 $2,934 $4,107 $5,281 $7,041 $9,388 $10,562 $11,735

PRINCIPAL AND INTEREST MONTHLY REPAYMENTS BASED ON A 30-YEAR TERM

$300,000 $500,000 $700,000 $900,000 $1,200,000 $1,600,000 $1,800,000 $2,000,000

3.30% $825 $1,375 $1,925 $2,475 $3,300 $4,400 $4,950 $5,500

3.40% $850 $1,417 $1,983 $2,550 $3,400 $4,533 $5,100 $5,667

3.50% $875 $1,458 $2,041 $2,625 $3,500 $4,667 $5,250 $5,833

3.60% $900 $1,500 $2,100 $2,700 $3,600 $4,800 $5,400 $6,000

3.70% $925 $1,541 $2,158 $2,775 $3,700 $4,933 $5,550 $6,167

3.80% $950 $1,583 $2,217 $2,850 $3,800 $5,067 $5,700 $6,333

3.90% $975 $1,625 $2,275 $2,925 $3,900 $5,200 $5,850 $6,500

4.00% $1,000 $1,667 $2,333 $3,000 $4,000 $5,333 $6,000 $6,667

4.10% $1,025 $1,708 $2,392 $3,075 $4,100 $5,467 $6,150 $6,833

4.20% $1,050 $1,750 $2,450 $3,150 $4,200 $5,600 $6,300 $7,000

4.30% $1,075 $1,792 $2,508 $3,225 $4,300 $5,722 $6,450 $7,167

4.40% $1,100 $1,833 $2,567 $3,300 $4,400 $5,333 $6,600 $7,333

4.50% $1,125 $1,875 $2,625 $3,375 $4,500 $6,000 $6,750 $7,500

4.60% $1,150 $1,917 $2,683 $3,450 $4,600 $6,133 $6,900 $7,667

4.70% $1,175 $1,958 $2,742 $3,525 $4,700 $6,267 $7,050 $7,833

4.80% $1,200 $2,000 $2,800 $3,600 $4,800 $6,400 $7,200 $8,000

4.90% $1,225 $2,042 $2,858 $3,675 $4,900 $6,533 $7,350 $8,167

5.00% $1,250 $2,083 $2,917 $3,750 $5,000 $6,667 $7,500 $8,333

5.10% $1,275 $2,125 $2,975 $3,825 $5,100 $6,800 $7,650 $8,500

5.20% $1,300 $2,167 $3,033 $3,900 $5,200 $6,933 $7,800 $8,667

5.30% $1,325 $2,208 $3,092 $3,975 $5,300 $7,067 $7,950 $8,833

5.40% $1,350 $2,250 $3,150 $4,050 $5,400 $7,200 $8,100 $9,000

5.50% $1,375 $2,292 $3,208 $4,125 $5,500 $7,333 $8,250 $9,167

5.60% $1,400 $2,333 $3,267 $4,200 $5,600 $7,467 $8,400 $9,333

5.70% $1,425 $2,375 $3,325 $4,275 $5,700 $7,600 $8,550 $9,500

5.80% $1,450 $2,417 $3,383 $4,350 $5,800 $7,733 $8,700 $9,667

INTEREST-ONLY MONTHLY REPAYMENTS

Level 6/122 Arthur Street, North Sydney, 2060 l P 02 9955 1176 l M 0412 129512 l E [email protected]

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