Prime Investment Loan - Flex (Principal and Interest) (LVR < 80%)
- Last updated on 14 Jul 2020
Discount Variable Home Loan
Make the move to UBank's award winning home loan
2.49%
Variable
2.49%
Owner Occupier Discounted Variable Rate
3.06%
Variable
3.41%
$1,275
based on $300,000 loan amount for 25 years
Pros
- 100% full offset account
- Extra repayments + redraw services
- Free redraw facility
- Repayments may decrease if RBA cuts rates
Cons
- Annual fee charged
- Discharge fee at end of loan
- Repayments may increase if RBA raises rates
Maximum LVR 80% | Interest rate structure Variable |
Borrowing range $150k - $500k | Total Repayments $459,000 |
Principal & interest | Interest only |
Loan term range 15 - 30 years | Offset account 100% offset account |
Extra repayments Unlimited extra repayments | Redraw facility Redraw fee: $0 |
Allows split interest | Suitable For Investors |
Applicable States ACT, NSW, NT, QLD, SA, TAS, VIC, WA | |
Total estimated upfront fees $330 | Application fee $0 |
Settlement fee $0 | Valuation fee $330 |
Legal fee $0 | Other upfront fee $0 |
Ongoing fee $299 annually | Discharge fee $300 |
Property Type | SMSF Trustee |
Minimum SMSF Amount |
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Resimac is a non-bank lender that’s been operating since 1985. In 2016, the business merged with specialised Australian mortgage provider, Homeloans.com.au.
Resimac is an ASX-listed lender that focuses on providing a broad range of home loans, an exclusive customer benefits program, and a network of over 12,000 broker partners.
Resimac doesn’t have traditional branches, but has a number of satellite sales offices nationwide. Resimac is also a Carbon Conscious lender and plants a tree for every settled home loan.
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FAQs
Each lender has its own policies, but as a general rule you will have to pay lender’s mortgage insurance (LMI) if your loan-to-value ratio (LVR) exceeds 80 per cent. This applies whether you’re taking out a new home loan or you’re refinancing.
If you’re looking to buy a property, you can use this LMI calculator to work out how much you’re likely to be charged in LMI.
Lender’s Mortgage Insurance (LMI) is an insurance policy, which protects your bank if you default on the loan (i.e. stop paying your loan). While the bank takes out the policy, you pay the premium. Generally you can ‘capitalise’ the premium – meaning that instead of paying it upfront in one hit, you roll it into the total amount you owe, and it becomes part of your regular mortgage repayments.
This additional cost is typically required when you have less than 20 per cent savings, or a loan with an LVR of 80 per cent or higher, and it can run into thousands of dollars. The policy is not transferrable, so if you sell and buy a new house with less than 20 per cent equity, then you’ll be required to foot the bill again, even if you borrow with the same lender.
Some lenders, such as the Commonwealth Bank, charge customers with a small deposit a Low Deposit Premium or LDP instead of LMI. The cost of the premium is included in your loan so you pay it off over time.
Lenders mortgage insurance (LMI) can be avoided by having a substantial deposit saved up before you apply for a loan, usually around 20 per cent or more (or a LVR of 80 per cent or less). This amount needs to be considered genuine savings by your lender so it has to have been in your account for three months rather than a lump sum that has just been deposited.
Some lenders may even require a six months saving history so the best way to ensure you don’t end up paying LMI is to plan ahead for your home loan and save regularly.
Tip: You can use RateCity mortgage repayment calculator to calculate your LMI based on your borrowing profile
A loan-to-value ratio (otherwise known as a Loan to Valuation Ratio or LVR), is a calculation lenders make to work out the value of your loan versus the value of your property, expressed as a percentage. Lenders use this calculation to help assess your suitability for a home loan, and whether you need to pay lender’s mortgage insurance (LMI). As a general rule, most banks will require you to pay LMI if your loan-to-value ratio is 80 per cent or more. LVR is worked out by dividing the loan amount by the value of the property. If you are looking for a quick ball-park estimate of LVR, the size of your deposit is a good indicator as it is directly proportionate to your LVR. For instance, a loan with an LVR of 80 per cent requires a deposit of 20 per cent, while a 90 per cent LVR requires 10 per cent down payment.
LOAN AMOUNT / PROPERTY VALUE = LVR%
While this all sounds simple enough, it is worth doing a more accurate calculation of LVR before you commit to buying a place as there are some traps to be aware of. Firstly, the ‘loan amount’ is the price you paid for the property plus additional costs such as stamp duty and legal fees, minus your deposit amount. Secondly, the ‘property value’ is determined by your lender’s valuation of the property, not the price you paid for it, and sometimes these can differ so where possible, try and get your bank to evaluate the property before you put in an offer.