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Empower Home Loan - 3 Year Fixed
3.99%paBorrower Rate
3.88%paComparison Rate*
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If your home loan rate doesn't start with a three, then it's time to find a better deal.

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If you want to lock in a low rate, the time to act is now

If you want to lock in a better rate now is the time to do it.

Today's low rates may not be around for much longer.

Did you know you can fix all or some of your interest rate for up to five years?

A Yellow Brick Road adviser can give you expert advice about what is right for you. Should you lock in a low interest rate now?

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Ask us about our Empower Rate Lock Feature

Once your loan is formally approved, we'll guarantee your fixed rate for up to 80 days without charge.

Find out more

Mark Bouris explains fixed rate loans

A fixed rate loan can help you manage your budget and give you certainty.

But is it right for you?

Mark Bouris talks about the pros and cons.

Find out more

How can we help?

Read our handy guides to the home ownership journey.

Refinancing your home loan - the $65,000 question

Home loan rates are at some of their lowest levels ever. But not everyone's making the most of it.

Thousands of Australians are stuck in a home loan where they're paying far more than they need to. Why? Because we are strange and irrational creatures.

Consider this: someone asks whether you'd like them to give you $65,000. There's only one possible answer: "Hell yeah!"

But that same person asks if you want to refinance your home loan, and your answer might be: "Meh. Sounds like hard work. I don't have time. Too much paperwork".

But that decision could cost you $65,000 over the life of your loan. That's $65,000 that could be in your hot little hand, in other investments or paying down your loan faster. Hey, maybe it's just paying for a nice new car!

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Get your mortgage out of the 'too-hard basket'

Either way, the chance to save tens of thousands of dollars is nothing to be sneezed. So whos holding you back from refinancing?

It's too hard - Working with a Yellow Brick Road mortgage broker makes the process easy and fast. You tell them your situation and they do all the hard work for you, looking at the best deals from more than 350 lenders. In just two or three sessions, we can sort out everything you need.

I don't have time - The most time you spend will be gathering paperwork for the application, such as payslips and tax returns. Assuming that takes you 2 hours, and the saving is $65,000, that's a hefty $32,500 per hour you just got paid!

It's not a priority - We get it: life gets busy. There are bills to pay and kids to pick up and errands to run. But sometimes it's the one-off actions that make a big difference. If you're paying more than you need to on a home loan, it won't make up for all the time you spend searching for specials at the supermarket or looking for the cheapest petrol station.

So what's stopping you? Speak to an expert today and find out just how much you could save on the life of your loan.

Buying a larger home

As your family expands - babies come along, teenagers take over, and parents want space - housing needs to change. Before you organise the removalists, look at the list below and ensure you are making the best financial decisions.

Do you sell or keep your current property?

You will need to consider whether you will be keeping your current property or selling it. If you decide to sell your property, you'll need to decide whether will you sell first or buy first.

Are you planning on renovating your current and/or your new property?

If you are keeping your current property or looking to increase its sale value, will you need to factor in some renovations, such as new carpet, painting or major kitchen appliances. Do you plan to renovate the larger property as well? You'll need a lender that takes this into consideration.

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Should you stay with your current lender?

Negotiate the best deal for you with your current lender and then compare it with the best comparable deals with other lenders. Compare loans that have similar features and be confident you have the best one for you. A Yellow Brick Road adviser can do the ground work.

Other costs to consider

With larger homes come larger expenses. Think about all the new furnishings you will need for your larger home, the big screen television, the double door refrigerator and any initial renovations you may be considering. Other increases to expect are on insurance.

To fix or not to fix? That is the question

Fixing your loan means you lock in a particular interest rate on all or part of your home loan. You can also choose the length of time to lock it in - from one year up to five years.

But is this the right decision for you? It all depends.
"A fixed rate is good for knowing what your home loan expenses will be every month. It's also a good way to lock in rates while they are low," says Mark Bouris, Executive Chairman of Yellow Brick Road.

However, fixed rate home loans often have different features compared to variable loans. For example, many of them don't offer offset or redraw facilities. There are also costs for paying back the loan early.

"Many of these drawbacks can be reduced by splitting your loan - making some of it fixed and some variable. This is a popular strategy as it gives you the best of both strategies," Mr Bouris said.

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There are pros and cons of fixed vs variable

Pros:

Manage your cashflow know for sure what you have to pay each month

Lock in while it's low take advantage of interest rates at historical

Peace of mind no need to worry about the RBA or your bank hiking rates

Cons:

Miss out on any rate cuts if the RBA lowers rates, you don't benefit

'Break fees' If you refinance or pay out the loan early, there may be a cost

Limited features may not be able to make extra repayments or offset/redraw

Many of these cons can be reduced by splitting your loan - making some of it fixed and some variable. This is a popular strategy as it provides the features and benefits of both strategies.

How long should I lock in for?

This will depend on your situation and where you think interest rates are going. The most popular terms are for two or three years, but you can go as little as one year, or as long as five.

If there is any prospect that you'll want to sell your home in that time frame, it could be better to choose shorter-term fixed rate loans, or stay with variable. The break fees you'll incur to pay out the loan can add to your costs significantly.

Redraw or Offset: which one do I need ... and why?

When you're taking out a mortgage, redraw and offset accounts are often mentioned. Both can help reduce the cost of your loan ... but which is better?

In reality, the question is often which one - it's usually one or both. That's because:

  • Loans that offer an offset account will often also have a redraw. However, some loans offer redraw only.
  • In most instances, redraw and offset is only available on a variable rate account. However, a handful of fixed rate loans offer redraw facilities.

You may pay a slightly higher rate or additional fees for the ability to have an offset account, so the question is whether the extra feature is worth the extra cost.

Let's dive into some of the details to decide.

Redraw - access additional repayments

Redraw means you can access any additional funds you've paid into a home loan, above the minimum repayment.

For instance, if your minimum monthly repayment is $2,100 and you elect to pay $3,000 per month, after 3 months, you will have paid an additional $2,700 into the loan. This amount can then be "redrawn" if you need to access it in the future.

The process of accessing redraw is generally via internet banking, with the funds are transferred from the loan account to a pre-nominated bank account.

It can sometimes take a day or so for the funds to be available. This is a good way to avoid dipping in for spur-of-the-moment purchases!

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Offset - savings reduce the cost of interest

Offset refers to a bank account where the balance "offsets" interest charged on the linked mortgage account. For instance, if you have $10,000 in an offset and $200,000 on your loan, you only pay interest on the equivalent of $190,000.

This cuts out the middle man in the redraw scenario, by making the funds available in the nominated bank account straight away.

This provides both advantages and disadvantages:

Advantages:

  • Knowing you have immediate access to the extra funds you have paid towards your home loan can encourage you to deposit your salary and other income, because you know you can have full access to those funds when you need them. More money deposited means that long term savings can be substantial.
  • Using an offset account also preserves the loan balance while providing the same financial benefit of paying down your home loan. This is useful in circumstances where you change the purpose of the property from Owner-occupied to investment. A higher loan balance may allow you to claim a greater tax deduction for the interest.
  • While it often comes at a cost, the offset account will replace the need for another bank account, possibly saving fees.

Disadvantages:

  • Sometimes a loan with full offset will attract a monthly fee or annual package fee, or even a higher interest rate.
  • For some people, having a large offset balance sitting in an account with immediate access can be too tempting, causing unnecessary spending. However, this disadvantage can be overcome by using both redraw and offset. Once the offset balance exceeds a certain threshold, money can be deposited into the loan account and only accessible by redraw which takes additional time and an additional step.

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Important Information

* Comparison rate is based on Empower standard variable rate for $150,000 loan over a term of 25 years. Comparison rate is based on a $450,000 loan at 70% Loan to Value Ratio (LVR), 3 year fixed rate for an owner occupier and interest only repayments over 30 years. Rates are correct as at 10/07/17 and are subject to change. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The rates are applicable to the Empower Home Loan only with LVR ≤80 per cent. Fixed rate loans may be subject to significant break costs. Please refer to your loan contracts for terms and conditions regarding break costs. At the end of the fixed rate period, the interest rate will revert to the borrower rate applicable at that time.

Rate lock feature available for formally (unconditionally) approved loans for a period of up to 80 days without additional charges. Settlement needs to take place within 90 days of the loan contract date. Normal credit criteria apply.

Available to new owner occupied applications. Purchase, refinance or construction of home or investment property. Vacant land without the immediate intention to build is not permitted. Empower home loan amount from $100,000 - $5,000,000. Not available in conjunction with any other offer. Initial consultation at no charge. Fees and charges may apply after initial consultation.

Yellow Brick Road Finance Pty Limited ACN 128 708 109, Australian Credit Licence 393195. Yellow Brick Road Wealth Management Pty Limited ACN 128 650 037, AFSL 323825.

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