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Making your next move
You’ve weighed up the pros and cons and decided you’re ready for a move. Whether it’s more bedrooms for a growing family, a relocation with work, or downsizing to keep things simple, we can help you buy your next home. Here are some questions you should ask first.

How much can I borrow?

Although you may have bought a property before, it’s a good idea to get a refresh of your options and review your needs. Start by calculating how much you want to borrow and what you can afford in repayments.

You’ll also need to factor in a variety of additional upfront costs like legal fees and insurance.

Don’t worry, we’ll cover this off in the next question.

What is equity?

If you’ve owned your home for a few years, you may have built up equity. This can be used as a deposit to buy your next home. Equity is the current market value of your property minus the amount you still owe on your loan. If your house is valued at $450,000 and you owe $350,000, you have $100,000 in equity.

Keep in mind you may not be able to access the full amount, and you’ll also need to factor in your Loan to Value Ratio (LVR). For example, if your equity is $100,000 and the new property you want to buy is valued at $650,000, your LVR is 85%.

Also factor in any extra repayments you’ve made.

How much can I borrow?
What will my repayments be?

What other costs are involved?

In addition to a deposit, there are other costs to keep in mind.

Some common ones are:

  • Loan establishment fee
  • Costs to get your existing property looking its best for the market
  • Stamp duty

    Stamp duty is a state government charge or tax. The amount is based on the purchase price of the property and is different in every state and territory.

  • Legal and conveyancing fees
  • Building and pest inspection

    Before you buy, make sure you get a building and pest inspection to check the property is structurally sound and free of pests like termites. Although not compulsory, it's highly recommended this is done before contracts are signed to avoid any nasty surprises down the line.

  • Real estate fees for your existing property
  • Removal expenses
  • Lenders' Mortgage Insurance

    If your deposit is less than 20% of the property's value, almost all financial institutions will require Lenders' Mortgage Insurance (LMI) to cover themselves for the higher risk. LMI is taken out to protect the lender in case you default, even if you’ve paid it already on your previous loan.

Upfront costs calculator

What is pre-approval and how do I get it?

Knowing how much you can borrow helps you to act quickly and confidently when you find your perfect next home. To get pre-approval, your income, outgoings, savings and any equity in your existing property are considered to work out how much you can borrow. Make sure you let your lender know if you are planning to buy at auction so the right type of pre-approval is provided.

It’s usually valid for 90 days, is obligation free, and can easily be renewed.

Which is the best loan for me?

Just as your life changes, so do the things you need in a home loan. This time around you may have different needs and require more flexibility and features.

Here are some things to consider when deciding:

Fixed interest rate vs variable interest rate loans

Here are some things to consider when deciding:

Fixed interest rate loans

  • Give you more certainty and make it easier to budget because you know exactly what your repayments will be for a set period.
  • Protect you against interest rate rises. However, if interest rates fall, you miss out on the savings.
  • If you decide to change your financial institution, sell your home, or pay off your loan within the fixed period, you may be charged an early payout cost.

Variable interest rate loans

  • Are subject to market conditions. If rates fall, it’s likely your variable rate will also fall, and your loan repayments will decrease. Similarly, if rates rise, so might your repayments.
  • Usually give you more features and flexibility such as an offset account, the ability to make extra repayments, or the ability to pay off or move your loan without incurring an early payout cost (although they may have a discharge fee).
Redraw facility

Redraw lets you access the additional payments you’ve made on your home loan. It’s a standard feature on Great Southern Bank home loans. It's a facility that gives you access to your lump-sum and extra payments. You can use your redraw for whatever you want, eg. family holidays or renovating your home. You can also draw upon it if you just need some financial breathing space.

Offset accounts
  • Let you use money in linked accounts to ‘offset’ your home loan. This means the balance in your accounts is offset daily against your loan, reducing the amount of interest you pay and your loan term. For example, if you have a loan of $500,000 and a balance of $10,000 in your offset account/s, you’ll only pay interest on $490,000 instead of $500,000.
  • Can have different features. 100% offset means you can deduct the full balance of your linked account/s from your loan.
  • Often have a minimum balance requirement that applies to your linked accounts.
  • Don’t earn any interest.
Split loans
  • Can't decide between a fixed or variable rate? You can choose to split your home loan.
  • By placing a portion on a fixed rate and a portion on a variable rate, you can enjoy the benefits of both.
  • This allows you to manage some of the risk of an interest rate rise with the fixed rate loan, while still having the flexibility of the variable rate loan.
Choose your own home loan
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Important information

Please note that this is only intended as a general guide in relation to issues you may want to consider when buying your first home. It is not intended to be an exhaustive list of all relevant issues and you should take into account your own particular circumstances, and obtain independent expert advice where needed, before proceeding. Rates and savings quoted are indicative only for illustrative purposes.

Great Southern Bank, a business name of Credit Union Australia Ltd ABN 44 087 650 959, AFSL and Australian Credit Licence 238317. Lending criteria, limits, conditions and fees apply. Applications are subject to credit approval.