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Hi Everyone...

I would be grateful for some information on the workings of the various mortgage products available in Australia.

I am a big fan of the Virgin (The One Account) mortgage in the UK and have used this successfully to fund various investments over the past 10 years.

Unlike many, I'm not a great fan of paying off my mortgage as quickly as possible as this just means I have the majority of my money tied up in a property!

The One Account allows you to set up a 'facility' which one can draw against for whatever reason. For me this has been to invest in other properties but I can see how this product isn't for everyone as it could be tempting to get oneself into debt with holidays and cars etc!!!

I do believe that these mortgages originated in Australia and was wondering if anyone could recommend a couple of good examples.

We are going to be able to buy our property outright and I would then like to be able to take a small mortgage by way of a 'facility' which I can then use for 'other activities'.

I look forward to hearing from you all...

Cheers
Spencer :ranger:
 

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Hi Jibbah:

All the lending banks have products like this. It's called a redraw facility, where any equity built up monthly can be redrawn.

Look at the bank websites loan products and you can see the rules for the redraw facility in many of the loans.

The big 4 banks in AU are:
CBA (Commonwealth Bank)
Westpac
ANZ
NAB (National Australia Bank)

But also the second tier banks have them too:
ING
HSBC
Citibank

If you prefer Virgin, in AU there is Virgin Money (non bank lender).

There are also good mortgage brokers in AU which handle the products of many banks and non bank lenders (no fees to you, they get a commission from the lender).

i.e.
Aussie Home Loans

Do a search on Google for redraw facility and the bank loans, no shortage of results.

Redraw is a very popular feature here as your mortgage tends to be the lowest borrower cost of the many types of loans. So people use them for things like buying cars, renovations, expensive trips overseas, big cost items.

As long as you have good financial discipline it's a good thing to have.



Hi Everyone...

I would be grateful for some information on the workings of the various mortgage products available in Australia.

I am a big fan of the Virgin (The One Account) mortgage in the UK and have used this successfully to fund various investments over the past 10 years.

Unlike many, I'm not a great fan of paying off my mortgage as quickly as possible as this just means I have the majority of my money tied up in a property!

The One Account allows you to set up a 'facility' which one can draw against for whatever reason. For me this has been to invest in other properties but I can see how this product isn't for everyone as it could be tempting to get oneself into debt with holidays and cars etc!!!

I do believe that these mortgages originated in Australia and was wondering if anyone could recommend a couple of good examples.

We are going to be able to buy our property outright and I would then like to be able to take a small mortgage by way of a 'facility' which I can then use for 'other activities'.

I look forward to hearing from you all...

Cheers
Spencer :ranger:
 

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Registered
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8 Posts
Hi Everyone...

I would be grateful for some information on the workings of the various mortgage products available in Australia.

I am a big fan of the Virgin (The One Account) mortgage in the UK and have used this successfully to fund various investments over the past 10 years.

Unlike many, I'm not a great fan of paying off my mortgage as quickly as possible as this just means I have the majority of my money tied up in a property!

The One Account allows you to set up a 'facility' which one can draw against for whatever reason. For me this has been to invest in other properties but I can see how this product isn't for everyone as it could be tempting to get oneself into debt with holidays and cars etc!!!

I do believe that these mortgages originated in Australia and was wondering if anyone could recommend a couple of good examples.

We are going to be able to buy our property outright and I would then like to be able to take a small mortgage by way of a 'facility' which I can then use for 'other activities'.

I look forward to hearing from you all...

Cheers
Spencer :ranger:
Thats exactly right - there are basically three options for this in Australia;
1) Home Loan with redraw facility - many banks have this option but some will charge for this privilege so its important to do the numbers,
2) Line of Credit - basically this is like a giant credit card against your property - no repayments are generally required providing you are under your limit. For example, if you get a line of credit with a limit of $400,000 and only owe $300,000, then no payments are generally required until you owe $400,000. As a rule a higher interest rate will apply here,
3) Standard home loan with an offset account - this is a great option and is perfect from a taxation perspective especially if the property is an investment property.

Which one of these is right for you really depends on your individual circumstances so the best thing to do is appoint the services of a mortgage broker that specialises in this area.

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