Home loans structured for your long-term position
A home loan is rarely just a transaction. Whether you are purchasing your first home, upgrading to your next property, or restructuring your debt, securing the right loan requires careful assessment of borrowing capacity, tax positioning, and lender credit policies.
Understanding borrowing capacity
Borrowing capacity is not a static number. Each lender applies distinct serviceability models, living expense benchmarks, and risk appetites. A borrower whose application is restricted by one institution may qualify comfortably with another on identical financial facts.
1. Income Verification & Shading
Base PAYG salaries are recognized at 100%, whereas bonuses, commissions, overtime, and rental income are shaded according to individual lender policy - frequently discounted to 80% to buffer for volatility. Self-employed borrowers require detailed tax return analysis.
2. APRA Serviceability Buffer
Australian prudential standards require lenders to assess loan repayments at the contract rate plus an interest rate buffer of at least 3.0 percentage points. If your loan rate is 5.94%, your serviceability is stress-tested at 8.94%.
3. Living Expenses & HEM Benchmarks
Under responsible lending regulations, lenders assess the higher of your declared actual living expenses or the Household Expenditure Measure (HEM) benchmark corresponding to your family size, location, and income tier.
4. Liabilities & Credit Limits
Credit cards reduce borrowing power significantly because lenders assess the monthly commitment at 3.0% to 3.8% of your total credit limit, regardless of whether a balance is owing. Personal loans, car finance, and HECS/HELP debt are factored into ongoing commitments.
Key Variable: Policy Variation Across Lenders
Across our panel of 30+ authorized residential lenders, borrowing capacity for the same applicant can vary by more than $100,000 to $180,000. Comparing policies before lodging an application protects your credit file from unnecessary inquiries.
Request a custom borrowing assessmentFirst home buyer finance
Navigating your first property acquisition involves understanding deposit thresholds, government assistance schemes, and the hidden costs of acquisition including stamp duty, legal conveyancing, and inspection reports.
First Home Guarantee (FHBG) & Government Support
Under the Australian Government's Home Guarantee Scheme, eligible first home buyers can purchase a residential property with a deposit as low as 5% without paying Lenders Mortgage Insurance (LMI). The government guarantees up to 15% of the property value through participating panel lenders. Property price caps apply by state and territory according to federal criteria.
Stamp Duty Concessions & Exemptions
State revenue offices provide concessions or full stamp duty exemptions for eligible first home purchasers below legislated property price thresholds. For example, in New South Wales, the First Home Buyers Assistance Scheme (FHBAS) provides full exemptions up to $800,000 and concessional rates up to $1,000,000.
Genuine Savings & Guarantor Structures
Most lenders require evidence of genuine savings, such as funds held or accumulated over at least 3 months representing 5% of the purchase price. Alternatively, a family guarantor loan allows immediate family members to secure a portion of the loan against their own residential property, eliminating the requirement for LMI and cash deposit savings.
Upgraders, next home buyers & bridging finance
Moving from an existing property to your next home presents timing complexities. Do you sell first and risk being out of the market, or buy first and manage two properties simultaneously? We structure transitional finance to give you negotiation confidence.
Bridging Finance Structures
Bridging loans provide temporary funding to cover the purchase of a new home before your current property is sold. The facility covers the purchase price plus costs, known as "peak debt." Once your existing property settles, the proceeds reduce the balance to the "end debt." Bridging periods are typically approved for 6 to 12 months.
Simultaneous Settlement Planning
Aligning the settlement dates of both your sale and your purchase eliminates the need for bridging debt. Our credit advisers coordinate directly with your conveyancer or solicitor to ensure loan documentation, mortgage discharges, and outgoing lender requirements align precisely on settlement day.
Equity Release for Deposit
If you have accumulated equity in your primary residence, we can arrange a supplemental loan facility to release cash for auction deposits or unconditional contract exchanges before marketing your current home.
Loan Portability
If your current mortgage maintains competitive pricing or a fixed interest rate with substantial break costs, some lenders permit "security substitution" - porting your existing loan to the new property without refinancing the entire debt facility.
Loan structures: Fixed, variable, offset & redraw
Choosing the right loan structure is as critical as securing a competitive interest rate. The structural architecture of your mortgage dictates your repayment flexibility, interest savings, and tax treatment if the property is ever converted into an investment asset.
| Feature | Variable Rate Loan | Fixed Rate Loan |
|---|---|---|
| Interest Rate Movement | Fluctuates with RBA Cash Rate decisions and lender cost-of-funds adjustments. | Locked for an agreed term (typically 1 to 5 years). Unaffected by market movements. |
| Repayment Flexibility | Unlimited additional repayments allowed without penalty. | Strict annual caps on extra repayments (typically $10,000 per year). |
| Offset Account Compatibility | Full 100% multiple offset accounts commonly supported. | Restricted or unavailable with most institutions; partial offsets rare. |
| Exit / Break Costs | Standard discharge fees apply (typically $350 to $400). | Significant economic break costs may apply if refinanced or repaid early during the fixed term. |
| Split Facility Option | Split Loan Structure: Borrowers can divide their total debt into fixed and variable tranches (e.g., 60% fixed for payment certainty, 40% variable with offset for cash flow flexibility). | |
100% Offset Accounts
An offset account is a separate transactional bank account linked directly to your home loan. Every dollar sitting in the account reduces the principal balance on which interest is calculated daily. If your loan balance is $600,000 and your offset holds $50,000, you are charged interest on only $550,000. Funds remain fully accessible with ATM and debit card functionality.
Redraw Facilities
A redraw facility allows you to withdraw extra principal payments you have made into your home loan account beyond scheduled minimum repayments. While it reduces interest identically to an offset, the funds sit directly inside the loan balance. Withdrawing redraw funds may be subject to lender processing times, minimum withdrawal thresholds, and potential tax implications if the home is later leased.
The lending process
Securing finance involves an orderly sequence of assessment, credit submission, and legal settlement. We coordinate every stage on your behalf to minimize friction and prevent avoidable delays.
Discovery & Borrowing Assessment
We analyze your income, assets, liabilities, and ongoing living expenses to establish your precise borrowing capacity and evaluate loan structures suited to your circumstances.
Lender Comparison & Policy Matching
We screen lenders across our 30+ bank and non-bank panel, filtering for pricing, serviceability appetite, and policy compatibility before presenting a structured Credit Proposal.
Application Lodgment & Pre-Approval
We assemble supporting documentation and lodge directly with credit assessors. Lenders issue a conditional pre-approval, typically valid for 90 days, giving you purchasing confidence.
Property Valuation & Formal Approval
Upon signing a contract of sale, the lender orders an independent property valuation. Once property security checks satisfy credit policy, the lender issues unconditional formal approval and loan contracts.
Settlement & The YFM Annual Finance Review
We liaise with your legal representative and incoming lender to coordinate PEXA electronic settlement. Following loan drawdown, you are enrolled in the YFM Annual Finance Review to ensure your pricing remains competitive year after year.