FAQs

Loan-to-Value Ratio (LVR) measures the size of your loan compared to the value of the property, usually expressed as a percentage. Its’ how lenders determine their exposure. Higher LVRS means more risk taken by lenders if required to re-sell. A lower LVR can improve your chances of loan approval, even qualify you for better interest rates

An offset account is a transaction account linked to your home loan that helps reduce the interest you pay. The money in the offset account doesn’t earn interest but instead “offsets” your loan balance – so you only pay interest on the difference.

For example, if you owe $500,000 and have $50,000 in your offset account, you’ll only be charged interest on $450,000.

How much you can borrow depends on several key factors, including:

• Your income (salary, rental income, etc.)
• Your expenses (living costs, debts, credit card limits)
• Your deposit size
• Credit history and financial commitments
• Interest rates and loan term

As a rough guide, many lenders allow you to borrow around 4 to 6 times your annual income, but this varies based on individual circumstances. If you’d like a more specific estimate, we can help you calculate it – Contact us for a borrowing capacity assessment.

The main difference between principal + interest and interest-only repayments lies in how the loan is repaid:

Principal + Interest: You repay both the amount borrowed (principal) and the interest, gradually reducing your loan balance over time. This results in higher monthly repayments but helps you pay off the loan faster.

Interest-Only: You only pay the interest for a set period (usually 1–5 years), so repayments are lower initially, but the loan balance doesn’t reduce. Once the interest-only period ends, repayments increase significantly as you begin paying off the principal too.