FAQs
How to Choose a Mortgage Broker in Australia
Wondering how to choose a mortgage broker in Australia? At BIR, we answer your biggest home loan questions, from broker fees to pre-approval and beyond.
Working with BIR Finance
What services does BIR Finance offer?
BIR Finance arranges home, investment, commercial, construction, SMSF, asset‑finance, working‑capital and personal loans. We also connect clients with trusted property and finance professionals.
There are three things we do that make us unique:
- Wealth creation: Our focus is always on your wealth creation. We do this in a number of ways:
- By showing you the lowest repayment options amongst those lenders who will lend to you
- By showing you smart borrowing strategies to minimise your interest payments
- By introducing you to professionals in the areas of buying and selling properties as well as financial and property investment advice.
- By introducing you to professionals in the areas of buying and selling properties as well as financial and property investment advice.
- Financial empowerment: We provide you with the information you need so you are empowered to make the right financial decisions which are suitable for you. As we say, ‘Our job is to give you choice to make an informed decision; your job is to choose!’
- Transparency: At all times we are 100% transparent – so we never keep you in the dark and we never withhold information which is relevant to your decision making. From day one of your journey with us, ‘You see what we see’
#HomeLoans #InvestmentLoans #CommercialLoans #MortgageBroker
Who is Michael Royal?
Michael Royal is the Founder and Chief Finance Specialist at BIR Finance.
He has been a Partner in the world’s largest accounting firm and a registered Liquidator with ASIC and the Supreme Courts of New South Wales and Victoria.
As a Chartered Accountant with a Bachelor of Economics, Master of Business Administration and Diplomas in Mortgage & Finance Broking and Real Estate, Michael maintains his knowledge at the highest level for both personal and business borrowing requirements.
And, with his various senior roles in insolvency, accounting, and business restructuring, as well as many years on boards, he is able to harness his real-life experiences so you are able to make informed decisions.
He has a deep understanding of business operations, having led turnaround and restructuring projects internationally.
His expertise ensures that BIR Finance not only sources loans but also provides strategic financial solutions to help clients optimise their financial position.
Connect with him on LinkedIn.
#MichaelRoyal #BIRFinance #FinanceExpert #MortgageBroker
Where is BIR Finance based?
We are wherever our clients are! Whilst our office is located in Williamstown, Melbourne, our clients are based Australia-wide – and some are even located overseas!
How does BIR Finance deal with clients who are not able to visit their office?
Particularly since Covid, the mortgage broking business – and in fact the banking industry as a whole – has rapidly changed from ‘bricks and mortar’ offices to online meetings, phone calls, emails and SMS.
Using the latest in secure online platforms and digital communication tools, our clients receive the highest level of service and information no matter where they are located.
And, with our prompt sharing of information, our clients are always well informed with the latest information relevant for their decision making.
For the secure delivery of documents to us, BIR Finance recommends clients deliver their documents via a secure online platform which has been set up for this purpose. This method also delivers many benefits such as easy to upload, easy to add notes and easy to check what has and has not been provided to us. And, we can quickly send messages back to you via this same platform.
#birfinance #mortgagebroker #australia #homeloans #nationwideservice
Why use BIR Finance?
We genuinely care for our clients – every step of the way.
When we develop our systems or processes, we view these through the lens of ‘Is this what we would like to experience if we were our client?’
Whilst our core business is to provide our clients with financial solutions, the most important aspect is that our clients are being given the information they need to make the decisions which they believe are in their best interests.
To achieve the best results for our clients, we focus on three key pillars:
- We assist our clients create wealth through saving money on their loans and giving access to a wide range of experienced professionals in the property and related industries.
- We always seek to empower our clients so they can make informed decisions, based upon all the relevant available information.
- ‘What we see, you see’ We assist our clients make these decisions by always being 100% transparent in all we do. ‘What we see, you see’.
What types of loans are available through BIR Finance?
BIR Finance offers a comprehensive range of loans tailored to both individuals and businesses. Our loan types include:
- Home Loans: Whether you’re buying your first home, upgrading, or refinancing, we help you find the right loan for your lifestyle and goals.
- Investment Property Loans: Structured for property investors looking to grow their portfolio with tax-efficient, well-financed solutions.
- SMSF Loans: Enabling your Self-Managed Super Fund to invest in property under strict compliance requirements.
- Lo Doc Loans: For you, your business or your SMSF, lo doc loans are often the best way to obtain finance, particularly for many self-employed clients who may not have standard income documentation.
- Working Capital Loans: To support business cash flow, operations, or seasonal needs.
- Commercial Property Loans: For business owners and investors buying offices, warehouses, or retail spaces.
- Construction Loans: Funding for building new homes or developments, with staged payments aligned to the construction timeline.
- Asset Finance: For purchasing business vehicles, machinery, or equipment, allowing you to conserve working capital.
- Unsecured Personal & Business Loans: For short-term funding needs such as debt consolidation, renovations, or business growth.
We assess your financial circumstances, long-term plans, and borrowing capacity to match you with the most suitable product across a panel of 120+ lenders. Each recommendation is backed by our transparent, lender-agnostic process.
#LoanOptions #HomeLoans #InvestmentLoans #BusinessFinance #MortgageBroker
Why choose BIR Finance instead of a bank?
Unlike banks, BIR Finance:
✅ Offers access to over 120 lenders, filtering options to only those that match your needs
✅ Provides lender-agnostic recommendations based purely on your best interest
✅ Uses advanced data-driven analysis to determine your borrowing power
✅ Maintains a client-first approach, ensuring you are informed and in control at every stage
We believe that ‘if there’s one lender, you have a deal. If there are two or more, you have a choice!’ This empowers you to make informed decisions rather than settling for a single bank’s limited options.
#MortgageBroker #BankAlternative #FinanceExperts
Using a Finance & Mortgage Broker
What does a mortgage broker do?
Mortgage brokers do a lot of different things to assist you get the right loan for you and your circumstances.
- They compile the information required by lenders to consider and approve your loan application.
- They make sure you are qualified for the loan you are applying for.
- They compare lenders’ products, negotiate on your behalf, complete paperwork and structure the loan to suit your goals and objectives.
- They always operate within the regulatory environment which governs our industry; in particular, our obligations with respect to Best Interest Duty and Responsible Lending.
It is important to note that lenders need only comply with the Responsible Lending obligations and not the Best Interest Duties for the client.
#mortgagebroker #financialempowerment #BIRfinance
Why should I use a broker instead of going direct to a bank?
Brokers offer more choice than a lender, and they must follow the Best Interest Duty regulatory requirements as well as provide ongoing support.
BIR Finance, for example, has access to over 120 lenders and their loan products. Not all loan products are suitable for all clients but this vast range of lenders is able to be harnessed by BIR Finance to provide you with a options and solutions which are most suitable for you.
A lender is unable to offer these services and in the vast majority of cases, the lender who you speak to when you obtain your loan is not involved with you along your journey.
#WhyUseABroker #BankAlternative #BestLoanOptions
How do brokers service their clients?
Each broker has their own way of working with their clients.
At BIR Finance, we follow an efficient seven-step process, which takes you all the way from your first day Discovery Call until your post-loan follow-ups, which take place in the years after your loan has settled.
Whilst some brokers still offer face to face services, BIR Finance has found that it is far quicker, and more time effective to use digital communications – everything from online meetings where we share our screen with you, to phone calls, emails, SMS as well as safe and secure digital document collection platforms
Some brokers prefer to assist their clients by providing them with a ‘best solution’. At BIR Finance, we work with you and the information you have provided to shortlist those lenders who will lend to you and who have the lowest cost for the first two years of your loan. Whilst we will highlight the lowest cost option for you, we always invite you to make the final decision which you feel is in your best interests.
How does screen‑sharing improve the process?
During our first discovery call meeting with clients, often via Zoom or Teams, we show you live borrowing‑power calculations and lender comparisons so you can “see what we see”.
This is a powerful way to communicate the key information many borrowers are looking for. And, it is done in such a way that we can answer and address any questions or queries they might have – on the spot – no delays!
Plus, we will send you the results of what we have covered during our meeting so you can have a good look at the data when you have time to reflect and consider your options.
#TechEnabledBroker #TransparentLending #VirtualMortgage
Services Cost & Commissions
How much do your services cost?
In most cases, we do not charge a fee to our clients as our fees are paid by the lender These fees are paid to us approximately 30 days after your loan has settled. Any fees we earn are reflected in full prior to you proceeding with your loan application.
Where there are exceptions to this practice, we let you know in advance and we obtain your consent before proceeding.
#fees #transparency #BIRfinance
Are there hidden fees or commissions?
There are no hidden fees or commissions.
All costs are fully disclosed to you before you sign any loan documents.
It is essential to note that lenders may also ‘claw back’ part or all of the commissions paid to the broker if a client refinances their loan within a predefined period after settlement. This period varies by lender, but it is typically 18 months to two years after a loan settles.
#NoHiddenFees #TransparentPricing #ClientTrust
Does BIR Finance earn referral income?
Usually we do not earn any referral income. If we are likely to receive referral income, you will know in advance and in writing before the fees are earned by us.
#TransparentCommissions #EthicalAdvice
Residential Home & Investment Property Loans
What types of home loans do you offer?
We provide various home loan solutions, including:
- First-home buyer loans with tailored guidance and government incentives
- Owner-occupier loans with competitive interest rates – suitable for upgraders, downgraders, or just refinancing.
- Investment loans designed to maximize return on property investment
- Refinancing solutions to secure a better deal or to access equity in your current property
- Lo Doc loans, suitable for those with non-standard income documentation such as an Accountant’s letter, BAS statements for a business, business bank statements
We take a structured approach to selecting a loan, assessing over 45 home loan lenders based on rates, features, flexibility, and long-term financial impact.
#HomeLoans #MortgageBroker #FirstHomeBuyer #Refinance
How much can I borrow for a home loan?
Your borrowing power or borrowing capacity is calculated based on:
- Your income and employment status
- Existing financial commitments and expenses
- Credit history and score
- Lender-specific policies and risk appetite
- The Loan to Value Ratio (LVR) of your loan. Your LVR is a simple calculation which takes your loan balance and divides it by the estimated value of the property being offered as security for your loan.
Typically, loans are secured over a single property and a typical LVR is 80% but it can go as high as 95%.
However, when you have access to additional property which can be used as security for your loan, your borrowing limit can even exceed 100% of the value of the property you are looking to purchase.
A good example is where you have additional property which can be used as security or a parental guarantee and your parents allow their property to be used as security for your loan.
But it doesn’t quite stop there…. When calculating your servicing capacity, lenders are required to add a buffer to the interest rate they are going to charge you to ensure you can manage to repay the loan at a higher rate of interest to what they are charging you. For the 140 lenders who are Authorised Deposit-taking Institutions (ADIs) and are governed by APRA, this is a minimum percentage (as of 2025, the buffer was set at 3.0%). This includes the major banks, regional banks, credit unions and building societies. Non-ADIs who are lenders (around 40 to 50 financial institutions), do not have to apply the APRA-required buffer but any lower buffer may be counteracted by a higher base interest rate.
We use real-time data and sophisticated modelling tools to calculate how much you can borrow, and provide you with a range of options that suit your financial goals.
#BorrowingCapacity #MortgageCalculator #LoanOptions
Can I borrow more 100% of the purchase price?
Typically, loans are secured over a single property and a typical LVR is 80% but it can go as high as 95%.
However, when you have access to additional property which can be used as security for your loan, your borrowing limit can even exceed 100% of the value of the property you are looking to purchase.
A good example is where you have additional property which can be used as security or a parental guarantee and your parents allow their property to be used as security for your loan.
What is the BIR Finance process for getting a home loan?
The home loan process with BIR Finance follows these seven steps. Each step is important and we take a lot of care to make sure we get every step as right as possible – so you get the loan you require.
- Initial Consultation: The Discovery Call
This is a really important step in the process as it ‘sets the scene’ for the work which will follow.
There are a number of components we seek to cover so let’s look at each of these in a bit more detail:
1. Data gathering and initial analysis
Via a Zoom call with us sharing our screen with you – so you get to see what we see. Typically, it takes around 10 to 15 minutes to gather your information and show you the results – all of which are updated live as we go
Outcomes: you get to see how much you can borrow and which lenders are likely to lend to you. We will often also show you the maximum amount you are likely to be able to borrow and in some cases where you are looking to access the equity in your current property or you are looking at buying multiple properties, we will also look at different scenarios on a ‘what if’ basis. It’s actually really cool and fun to do!
2. Property value estimates
If you own a property or you are looking to purchase a particular property, we will run for you an estimate of value report produced by our property research partners at Cotality (formerly known as CoreLogic). Whilst this is only an estimate, it is often the first value a lender will see when they are looking at a loan application so it can be very useful. And if you are looking at buying in a particular suburb, we will run a report for that suburb so you can digest the property values in that area.
Outcomes: You will obtain a free estimate of value for each property you own or are looking to own plus a free suburb report if you have not yet identified a specific property you would look to buy.
3. Product Selection
We will typically run a product selection report based upon the loan amount you would like to consider, using any splits between Variable Rates and Fixed Rates plus any loan features such as an Offset account for the term of loan you would like to consider. We show you the cost of the likely top 5 products based upon interest rates, fees and charges as obtained from our earlier work.
And, we look at the total cost for the loan term but probably more importantly, we look at the loan cost for the first two years. Why two years? We believe every client should at least be holding their lender to account every couple of years – and if they won’t match the best rates in the market then the client should consider whether it is worthwhile changing lenders.
Outcomes: a product comparison report with key features identified and costs for the first two years as well as the life of the loan.
4. Funding calculation
As part of looking at how much you can borrow, when you are purchasing a property, it is important to confirm you have enough funds to complete the purchase based upon the cash you have available plus the loan funds; sufficient to cover all costs associated with the property purchase.
Outcomes: a funding calculation – nice and simple!
5. And then….
After the call has finished, we email you ALL the results we showed you on the screen. This is a key part of our commitment to 100% transparency from Day 1!
- Due Diligence
We then get to work gathering your information quickly and efficiently, using technology to do the heavy lifting. The less work you have to do, the better it is!
But, we don’t skimp on this part of the process. You need to know that we have done our very best to uncover any potential lender-related issues which might result in a particular lender not being suitable for you. So, we gather all the documents we might need, checking to make sure there are no hidden issues which a lender might uncover, and which could result in your loan being declined.
Gathering the data from you is now much simpler than it used to be. We use a secure portal which assembles all the documents we need in such a simple structured way that it is easy to see what you have given us and what is still outstanding. Plus, this portal allows us – and you – to send messages back and forth to each other, avoiding lots of emails and email attachments which are not only open to security issues but which also are difficult to navigate what has and has not been supplied.
• For almost all banks and financial institutions, we don’t need you to lift a finger as the data is securely sent from your bank to us – and it is analysed as well so you don’t need to spend hours preparing an analysis of your expenses!
• For most income statements (IS), income tax returns (ITRs) and notices of assessment (NOAs), you can gather these from your MyGov account – and we can help you navigate this if you are not familiar with the process!
We only need your ITRs and NOAs if you earn income other than via your employer. This applies to the self employed as well.
For your employment, if you only get paid your salary or wage, we only need your last two payslips. If you receive any ‘add-ons’ such as allowances, overtime, commissions and bonuses, we will typically obtain a letter from your employer.
• If you earn any assessable income via investments, shares or rental properties, then we will need to dig a little deeper and obtain your ITRs and NOAs. Rental properties will also need to confirm their current rental amounts.
• For any non-bank loans, we will need a recent statement and if you have it, a copy of the original agreement. That way we can also give you some advice on potential debt consolidation benefits.
• For those of you who are likely to retire during the term of the loan, we will also grab a copy of your most recent super fund statement. This statement balance will allow us to confirm you have the capacity to maximise the term of the loan, even if you are likely to retire before the loan term ends.
- Your Goals and Objectives feed the Loan Structure
It is really important that we fully understand all your goals and objectives. After all, your goals and objectives will determine the structure of the loan so we need to make sure we get this part 100% correct.
- Pre-Approval
Where you are looking to secure a pre-approval, we make sure the lender selected will be able to deliver the pre-approval which will give you the comfort you need to purchase with confidence.
What borrowers are often not aware of is that some lenders do not offer a fully assessed pre-approval. These quasi-pre-approvals are often referred to as conditional pre-approvals. In these cases, the lender might have checked the numbers – but not the documents behind the numbers. So, there is still a real risk – particularly for those borrowers who have very little in the way of additional financial capacity, to make up any shortfall in the finally approved loan amount.
- Your Loan Application
This is the really important part where we compile all your information together so that it tells your story to the lender – and it clearly sets out what you are seeking to achieve and what you need from the lender.
Before we lodge your application, we make sure you have had the time to review your application and sign off on the detail.
Lastly, we only give the lender that information which they say they require to approve your loan. We never give them any additional documents – even if you have given additional documents to us.
This is really important for our clients to understand – we might gather documents to ensure there are no hidden surprises, but we only give those documents to the lender if they ask for it. As one lender said to us once, “We cannot ‘unsee’ what we have seen, even if we didn’t ask to see it.”
Sometimes, additional requests will be made by a lender. That is where we assist you and make sure that only the additional documents a lender requests are provided to them.
- Approval & Settlement
Once approved, we guide you through the settlement process. We liaise with you, your legal team or conveyancer and your lender. We don’t stop until your loan has settled and you have the funds, and if you are buying, you have your property safely registered in your name!
- Post-Settlement Review
We review your loan every two years to ensure it remains competitive. This is so important as lenders are in the business of making money and a loan which is neglected is the loan where the lender will feel they can make some additional profit by keeping the rate a little higher.
#HomeLoanProcess #MortgageBroker #LoanApproval
What is the difference between a pre-approval and formal approval?
✅ Pre-approval (conditional approval): An early indication from a lender that you qualify for a loan, subject to further assessment. Pre-approvals vary significantly between lenders, so it is important you understand clearly what are the conditions as advised by the lender.
The best pre-approvals are only conditional ‘subject to valuation of the property to be purchased’. In other words, the lender has fully assessed your application, reviewed all your documents and is satisfied that they should lend to you and that you can repay the loan amount applied for.
Whilst being ‘subject to valuation’ can cause angst for many borrowers, it is important to note that for most residential property purchases, the value is taken to be the contract of sale price – and if it is a price obtained at auction, this has an even higher level of certainty.
To give you as much confidence as possible, this is what we also do: as soon as we know the property you are looking to buy, we prepare an estimate of value report from Cotality (formerly known as CoreLogic). This provides us – and, importantly, you – with information on the likely value a valuer will ascribe to the property.
It is also worth noting that in this digital age and as the data on properties improves, lenders are often using desktop valuations rather than full ‘visit the property’ valuations. This reduces the risk when the lender is one of the larger lenders and the LVR is below 80%.
It is also worth noting this warning: some of the large retail shopfront banks will often promote their ‘in writing’ pre-approvals at the branch level. Unfortunately, these pre-approvals have not been cleared by their credit team, and they are often based upon a cursory review of your numbers. And if you read the pre-approval document they provide to you, you will quickly realise that the disclaimers are significant!
✅ Formal approval: Final lender approval after verifying all documentation and completing property assessments. Whilst there may still be conditions, these are mainly cautionary in the event that something in your circumstances changes significantly prior to settlement.
#PreApproval #FormalApproval #HomeBuying
Home loan vs investment loan – key differences?
Owner‑occupier loans fund the place you live in; interest isn’t tax‑deductible, but your capital gains are also not treated as assessable income.
Investment loans fund rental properties; interest and expenses may be deductible and rates are often slightly higher. Capital gains are also likely to be assessable for tax purposes.
#HomeLoans #InvestmentLoans #PropertyFinance
How much deposit do I need?
Typically, and historically, borrowers have been encouraged to contribute a 20% deposit to the purchase of their home.
Whilst a 20 % deposit is often seen as the standard, there are many lenders who accept a 5 % deposit with Lenders Mortgage Insurance (LMI). This has become more prevalent as property prices have escalated and saving a 20% deposit has become more challenging for many home buyers.
If you are a first home buyer, you may qualify for various government incentives including a government guarantee in lieu of LMI. Click here for the details relating to Housing Australia’s Home Guarantee Scheme. A side benefit of this Scheme is that the lenders who are participating in the Scheme will often charge the first home buyer their interest rate for a sub-80% LVR loan; which can be considerably cheaper than their 95% LVR loan rate.
Finally, certain professionals in the medical sphere, as well as lawyers, accountants and engineers may qualify for LMI waivers up to 95 %. However, these waivers are not automatic and you need to do the research for the lenders you are considering.
As a broker, BIR Finance does this research for you so you are only presented with lenders who will lend to you what you need.
#HomeLoanDeposit #FirstHomeBuyer
What is LMI and how does it work?
Lenders Mortgage Insurance (LMI) is paid by the borrower to protect the lender in the circumstances as set out below.
It is payable upfront as part of the settlement process. Often, it is capitalised – which means it is lent by the lender to the borrower as part of their total loan. If it is capitalised, then the lender will typically include this LMI loan in their servicing calculations for the borrower.
LMI is typically around 1% to 5% of the loan amount, with the percentage increasing as your loan’s LVR gets closer to the highest level (currently around 95%).
Over 200,000 policies are being taken out, with the majority being for owner-occupied property loans and predominantly by first home buyers. With approximately 300,000 loans taken out each year for owner-occupied property purchases, you can see that loans requiring an LMI policy are a high proportion.
How LMI impacts the borrower after the loan settles;
- the borrower defaults on the loan (i.e. misses repayments)
- the lender takes possession of the property and sells it
- the sales price is less than the amount owing to the lender
- the lender claims the shortfall from the insurer under the LMI policy
- the insurer then claims this from the borrower
In other words, the borrower protects the lender upfront and then protects the insurer if there is a successful claim under the LMI policy – a lose/lose for the borrower!
#LendersMortgageInsurance #HighLVR #LMI
How can I avoid paying LMI?
- Use equity in another property
- Family guarantee (limited guarantee from parents)
- Look for lenders who offer professional waivers (medical and other professionals such as accountants, lawyers and engineers).
- Save a greater deposit
#LendersMortgageInsurance #HighLVR #LMI
Can I access equity in my home to invest?
Yes, you can access the equity in your home to invest, typically through a refinance or a line of credit, often combined with an offset account to help manage interest costs.
Lines of credit are less common these days when most loans have an Offset feature which operates in a similar fashion to a line of credit but often at a lower interest rate so a detailed explanation is not provided below. However, if you think a line of credit might be of interest to you, please let us know and we can give you the relevant details for your consideration.
When you refinance with a higher loan value, this additional loan is often referred to as an equity release loan or a cash out loan.
Refinancing involves replacing your existing mortgage with a new one, potentially freeing up cash from your home equity.
There are now a reasonable number of lenders who are flexible as to the purpose for which the equity release loan is required; with some even including business purposes. Some lenders, however, require a specific purpose and some even require evidence of the purpose for the amounts required.
How an equity release loan works:
Refinancing replaces your current mortgage with a new one, potentially for a larger amount. The difference between the new loan amount and your existing mortgage can be accessed as cash to use for investments, holidays or even school fees.
Example:
If your home is worth $600,000 and you owe $300,000, your equity is $300,000. Subject to showing you can service a higher loan amount, you could refinance for $400,000, accessing $100,000 for an investment or other purpose.
Benefits:
The main benefit of obtaining an equity release loan is so you can borrow and have the money sitting there for when you need it, instead of having to apply for a loan at short notice. In other words, it allows you to be prepared for when you need the funds – and not have to scramble around trying to borrow the money you need with no time to do proper due diligence.
Because you borrow when a lender is willing to lend to you, we often equate this to an insurance policy: because if something goes wrong in your life, you have the funds available to mitigate the short term impact of life’s adversities. Yes, you have to pay the money back but sometimes, just having that peace of mind to access funds when needed, reduces the stress of whatever life has thrown at you. And, it is worth remembering that when something goes wrong in our lives, that is probably not the time that a lender will be willing to assist you with additional finance. This is the insurance policy aspect of an equity release loan.
Considerations:
You’ll need to qualify for the new loan, and there may be fees associated with refinancing.
If you have to change lenders, it is worthwhile checking the exit fees from your current lender and application fees for your new lender. Whilst these amounts can vary, most exit fees for residential property lenders are around $350; however, the application fees can vary from $Nil up to $1,000 to $2,000.
Offset accounts: What are they and, do I need one if I refinance and obtain an equity release loan?
We are a big fan of Offset accounts – even if you are not applying for an equity release loan – but if you applying for an equity release loan, it is a no brainer as you are likely to have a considerable balance of funds sitting in the Offset account until you need to use them.
For most people, the savings an Offset account can provide the borrower will exceed the annual package fee costs which are often a part of obtaining the Offset account (around $200 is a reasonable estimate of these costs).
The big secret
The real secret behind an Offset account is to have ALL your surplus funds (including ‘day to day’ surplus funds) in an Offset account. What a good Offset account set up and structure allows is for the borrower not to have any funds sitting in a savings account.
Savings accounts earn less interest than your mortgage interest rate costs you, so saving a dollar in interest repayments on your home loan is going to give you more benefit than this dollar can earn for you in a savings account. Plus, the interest income you earn in the savings account will be taxed so the benefit to you is even lower after you deduct the tax. However, the interest you save on your home loan rate by having funds in an offset account is not taxed by the government!
These days, many lenders offer Offset accounts and a large proportion also offer multiple Offset accounts. We recommend lenders who allow multiple Offset accounts so you can treat them a bit like your savings account structure. You might have one day-to-day account for normal transactions, another for your holiday savings, and another for school fees. When you set up your offset accounts, set them up exactly the same way as you would for savings accounts!
How an Offset account works:
An offset account is linked to your mortgage loan . Any money in the offset account is ‘netted off’ by your lender when it calculates the daily interest on your loan, reducing the interest you pay on your loan (and conversely, increasing the amount of your payment which is allocated to repayment of the principal amount borrowed).
Example:
If you have $10,000 in your offset account on a particular day and owe $200,000 on your mortgage, you’ll only pay interest on $190,000 for that day (lenders calculate interest daily).
Benefits:
- Reduces your interest costs, with the maximum benefit being an Offset account linked to your home loan as the interest costs on this loan are ‘after tax’ so a dollar saved is truly an extra dollar in your pocket.
- Flexibility to access the funds directly on an as needs basis. You can go online and subject to any maximum withdrawal limits, you can use the funds as needed.
- There is no need to obtain lender approval or permission to draw down on the funds.
#HomeEquity #WealthBuilding #SmartInvesting #OffsetAccount #InterestSavings
Should I choose a fixed or variable rate?
Fixed rate loans have a fixed rate of interest for the term of the fixed rate term. Typically, fixed rate terms are from 1 year to 5 years.
Fixed Rate Loans – Benefits and Costs
Benefits:
- Predictable Payments: The interest rate remains constant for the loan term, so monthly payments are known in advance, making budgeting easier.
- Protection from Rate Hikes: Borrowers are shielded from rising interest rates, which can be beneficial if rates increase during the loan term. And, subject to paying any fixed rate lock fee, you can lock in a rate which is available at the date your application is lodged.
- Easier Financial Planning: Knowing the exact repayment amount allows for better long-term financial planning and budgeting.
Costs:
- Potential for Higher Initial Rates: if interest rates are falling, the fixed rate you are locked into may be higher than future variable rates.
- Missed Savings Opportunities: If interest rates fall, borrowers with fixed rates may miss out on the potential to save on lower interest payments.
- Early Repayment Fees: Breaking a fixed-rate loan early can incur significant penalties.
- Offset account restrictions: not all lenders allow an Offset account to be linked to a Fixed Rate loan.
- Fixed rate lock fees: most lenders who offer a fixed rate loan option also offer a borrower a fixed rate lock which will ‘lock in’ the rate at the date of their application, even if rates were to subsequently increase. However, this fee is a cost the borrower needs to factor, and it is not always refundable. For lenders who charge a fixed rate lock fee, it is typically 0.10% to 0.15% of the loan amount. So, for a $500,000 loan, the fee would be approximately $500 to $750.
When rates are looking like they will change, we often discuss with our clients who are considering a fixed rate loan the following questions:
- What is the current differential in the rates right now?
- What is your understanding of the best estimate as to what the rates will be at the end of the fixed rate term?
- When do you think future rate changes are likely to occur?
By having this discussion, we often provide our clients with a bit more clarity as to the likely benefits of choosing a fixed rate loan – and what is the term they should consider.
Variable Rate Loan: Benefits and Costs
Benefits:
- Flexibility to Benefit from Rate Decreases: Borrowers can benefit from falling interest rates, potentially lowering their monthly payments (or, they can keep their payments ‘as is’ and pay the loan off earlier.
- Flexibility with Repayments: Many variable-rate loans allow for extra repayments and redraw facilities.
Costs:
- Unpredictable Payments: Monthly payments can fluctuate with changes in interest rates, making budgeting more challenging.
- Risk of Increased Payments: If interest rates rise, monthly payments will increase, potentially impacting affordability.
- Less Protection from Rate Hikes: Borrowers are exposed to the risk of rising interest rates, which can increase the overall cost of the loan.
A split loan
There is where you have one or more splits with a fixed rate – perhaps with different terms and one split with a variable rate. This can offer borrowers a ‘hedged risk’ against the movements in rates which might otherwise be experienced.
#FixedRate #VariableRate #MortgageTips
Offset accounts vs redraw facilities – what’s the difference?
The financial impact of the two facilities is exactly the same if the balance in each is the same, subject to potential fees and charges with an offset account (around $200 a year is a reasonable estimate).
The main difference between an offset account and a redraw facility is the flexibility and lack of immediacy.
Offset accounts offer greater flexibility and liquidity, allowing you to access your funds easily. Redraw facilities can have restrictions on when and how much you can withdraw.
A redraw facility allows you to pay more into your loan account than what you have contracted to pay and then redraw these funds at a later date. An offset account is a separate bank account which acts and looks like a savings account from a transaction perspective.
Offset Accounts: Benefits and Costs
Benefits:
- Reduced Interest: Every dollar in your offset account reduces the interest you pay on your home loan.
- Flexibility: You can access your funds easily through transfers or a debit card, as it’s linked to a transaction account.
- Liquidity: Funds in the offset account are readily available when you need them.
- Potential Tax Advantages: For investment properties, an offset account can offer tax benefits, as the interest saved is not considered income. (Noting that if the funds were in a savings account, no matter what the source of funds, the interest earned would be taxable – this is one of the reasons we prefer a well-structured offset account rather than a loan account and savings accounts)
Costs:
- Fees: Offset accounts often come with annual account-keeping fees – around $200 per annum is common.
- Potential for Higher Interest Rates: Loans with offset accounts may have higher interest rates than those without an offset and redraw.
- Asset Considerations: In some situations, the funds in an offset account may be considered an asset, potentially impacting eligibility for government benefits.
Redraw Facilities: Benefits and Costs
Benefits:
- Reduced Interest: Extra repayments made on your loan reduce the principal and thus the interest you pay.
- Potentially Lower Costs: Redraw facilities may be free to use, or have lower fees than offset accounts.
Costs:
- Redraw Fees: Some lenders charge a fee each time you redraw funds.
- Limits on additional repayments with fixed rate loans: It is common for lenders to have restrictions on how much extra you can deposit into a fixed rate loan
- Withdrawal Limits: There may be restrictions on how much you can redraw or how often. Fixed rate loans often prevent redraws during the fixed rate term .
- Potential for Higher Interest Rates: Loans with redraw facilities may have higher interest rates than those without redraw or offset.
- Less Flexibility: Accessing funds through redraw can be slower than with an offset account. This can be counted in days (not weeks).
- Tax Implications: Redrawing funds may affect the tax deductibility of your loan interest, especially for investment properties.
Whilst intuitively you would think that flexibility and immediacy are both good to have, for some clients we recommend they consider the benefits of a redraw in terms of slowing down the access to the funds – as this might prevent an impulse purchase for those of us who might be inclined to ‘buy first and think later’!
#RedrawFacility #OffsetAccount
What interest rate can I expect?
Rates vary by product type. Commonly, there are differences experienced in the following trade-offs, noting that the first mentioned tends to be slightly cheaper
- Home loan Vs Investment property loan
- Principal and Interest Vs Interest Only
- Fixed Rate Vs Variable Rate (although which is cheaper may depend upon the current interest rate direction and other macroeconomic factors)
- Your LVR (Loan‑to‑Value Ration).
- Whether you have an Offset account and Redraw facility included.
When you apply for a loan with us, we will show you through the current rates available – but importantly, only for those lenders who are likely to lend to you
#InterestRates #MortgageMarket
What is a typical loan approval timeline?
At BIR Finance, we are sticklers for making sure your loan will be approved. So for us, speed is good but unless you have an urgent deadline, what is better for our clients is certainty; the certainty that the lender we recommend will actually lend to you the amount you need.
Also, with the best intentions in the world, most clients require a couple of weeks to assemble all the documents which a lender might request.
In recent years, however, there have been major improvements in the timeline due to the following factors:
- Identification is turning largely to online verification via secure links, allowing a quick and easy ‘soft check’ of a client’s credit history.
- Bank account data is also obtained via secure links, saving you the time and hassle of downloading a whole lot of bank statements. Plus, when it is obtained, sophisticated and secure systems are analysing the data to determine your income and expenses and also to obtain up-to-date records of your good credit history.
- MyGov is becoming a one stop shop for income tax returns (ITRs), income statements (IS) and notices of assessment (NOA).
For relatively straightforward deals, allow a week or two to get the information to us and a week for the lender to complete their assessment – so three to four weeks in total. Having said that, we have done applications lodged and approved in a week. It is important to note that lenders are not under any time restrictions, and they will take as long as they think is necessary to do the appropriate due diligence on your loan application.
#LoanTimeline #ApprovalProcess
What is genuine savings and why does it matter?
Many lenders want to see at least 5 % of the purchase price saved or held for 3 months to prove repayment discipline. This is particularly the case with first home buyers.
What counts as genuine savings?
- Savings accounts: Money held in a savings account for the required period.
- Term deposits: Funds held in a term deposit for the required period.
- Managed funds: Investments in managed funds.
- Shares: Investments in shares.
- Rental history: Some lenders may accept rental history as evidence of genuine savings, provided the borrower has a consistent and timely payment record.
- First Home Super Saver Scheme: Money withdrawn from the First Home Super Saver Scheme.
What doesn’t count as genuine savings?
- Gifts: Money received as a gift is generally not considered genuine savings.
- Borrowed funds: Money borrowed from any source is not considered genuine savings.
- Funds held for less than the required period: Savings held for a period shorter than the minimum requirement.
#GenuineSavings #HomeLoanTips
What Government help is there for first‑home buyers and other classes of buyers?
Here are the main government schemes available for first-home buyers in Australia, including state-based initiatives:
- First Home Loan Deposit Scheme (FHLDS): Helps eligible first-home buyers purchase a home with a deposit as low as 5% without needing to pay Lenders Mortgage Insurance (LMI) . Note: borrowers who hold more than 20% in funds are generally not eligible for this scheme.
- First Home Owner Grant (FHOG): Provides a one-time grant to first-home buyers to help with the purchase or construction of a new home. Amounts and eligibility criteria vary by State .
- Stamp duty exemptions and concessions: Each State offers stamp duty exemptions for first home buyers where the dutiable value (normally the purchase price) is less than a particular amount with concessions in stamp duty payable for values greater than this minimum amount but with a cap, after which, stamp duty is payable in full.
- First Home Super Saver Scheme: You can make voluntary contributions to your super and withdraw it to use as a home deposit.
- Family Home Guarantee: This scheme is for single parents with dependents. The government assists by guaranteeing part of your deposit.
- Regional First Home Buyer Support Scheme: This is for those intending to buy property in regional Australia. The government helps by guaranteeing part of your deposit.
- Help to Buy scheme: The government funds some of the upfront cost of a home in exchange for equity in the property. Shared equity schemes like the Victorian Homebuyer Fund (VHF) operate in Victoria
Schemes such as the First Home Guarantee and stamp‑duty concessions can reduce your upfront costs. We’ll check your eligibility and help you organise your paperwork!
#FirstHomeBuyer #GovernmentGrants
What is a low doc loan and when is it recommended to be used?
A low doc loan is a mortgage option for borrowers who are self-employed or have irregular income and may not have the standard documentation required for traditional home loans.
Here’s why they are used:
- Flexibility: Low doc loans offer flexibility in income verification, requiring less documentation compared to standard loans.
- Self-Employed Individuals: The are ideal for self-employed individuals and business owners who have a reliable income but may lack the typical proof of income like payslips or tax returns.
- Fast Approval: They often feature quicker approval times, catering to borrowers needing expedited loan processing.
- Asset-Led Borrowing: Suitable for borrowers with substantial assets but irregular income, where the value of the property may secure the loan despite lower income proof [5].
These loans help borrowers access financing when they can’t meet traditional income verification requirements, supporting entrepreneurial and self-employment opportunities.
We specialise in matching borrowers to lenders who will keep the process simple. For this reason, when we are relying upon accountants’ letters, we choose lenders who will make it easy for accountants to complete, without having to stress about whether they are breaching their PI policy!
What is a parental guarantee loan and how does it work?
A parental guarantee loan, also known as a guarantor loan, is a type of home loan where a family member, typically a parent, acts as a guarantor for the borrower’s loan.
The guarantor uses the equity in their own property as security for the loan, essentially guaranteeing that they will cover the loan repayments if the borrower is unable to. This allows the borrower to potentially get a home loan with a smaller deposit or avoid paying Lenders Mortgage Insurance (LMI).
How it works:
- Borrower’s Needs: A borrower, often a first-time homebuyer, may have a limited deposit or be unable to qualify for a loan on their own due to a low loan-to-value ratio (LVR).
- 2. Guarantor’s Role: A parent or close family member with sufficient equity in their own property agrees to act as a guarantor.
- Security: The guarantor provides security for the loan, typically by offering a portion of their property’s equity as collateral. This reduces the risk for the lender.
- Loan Approval: With the added security of the guarantor, the lender is more likely to approve the loan, potentially with a smaller deposit or without LMI.
- Repayments: The borrower is responsible for making the regular loan repayments. If the borrower defaults, the guarantor is then responsible for covering the loan repayments.
- Removing the Guarantee: Once the borrower’s LVR reduces to a certain level (usually below 80%), the guarantor can potentially be released from their obligations.
Key Considerations:
- Financial Risk: The guarantor is taking on a significant financial risk, as they are liable for the loan if the borrower defaults.
- Legal Advice: It’s crucial for both the borrower and the guarantor to seek independent legal advice to understand the implications and risks involved.
- Relationship Strain: If the borrower experiences financial difficulties, it can put a strain on their relationship with the guarantor.
Benefits:
- Access to Homeownership: Enables individuals to enter the property market sooner than they might otherwise be able to.
- Reduced Deposit: May allow borrowers to purchase a property with a smaller deposit or avoid LMI.
- Increased Borrowing Power: Can help borrowers access larger loans they might not have been eligible for otherwise.
What is the difference between a parental guarantee loan and a loan with the parents as borrowers?
- Parental Guarantee Loan:
Definition: A parental guarantee loan, also known as a family guarantee, involves a family member, typically a parent, acting as a guarantor for the borrower’s loan.
Role: The guarantor uses their own property’s equity to secure a portion of the borrower’s loan amount, reducing the need for a deposit. - Loan with Parents as Borrowers:
Definition: In this scenario, the parents themselves are the primary borrowers on the loan.
Responsibility: They are directly responsible for repaying the loan and are listed on the loan documents as borrowers, rather than acting as guarantors[2].
With a parental guarantee loan, the child is the main borrower and makes every repayment.
Mum and Dad sit in the background as guarantors, pledging some of the equity in their own home (often enough to bring the loan-to-value ratio under 80 per cent so the child avoids Lenders Mortgage Insurance).
Because the parents aren’t expected to service the loan, lenders usually assess affordability on the child’s income alone.
Parental age isn’t a huge hurdle either, as the bank’s real comfort comes from the parents’ equity, not their cash flow.
The guarantee can be released once the child’s loan balance drops—through repayments or capital growth—so that the loan stands on its own two feet. Until that release, the guaranteed amount appears on the parents’ credit file as a contingent liability, which can crimp their future borrowing.
In a loan where the parents are co-borrowers, everyone listed on the contract is “jointly and severally liable”. In plain English, the bank can chase any one borrower for the whole debt from day one.
All borrowers’ incomes and expenses go into the serviceability sums, which can boost borrowing power but also drags in Mum and Dad’s existing debts.
Because the parents are repaying the loan alongside their child, lenders apply normal policy around age: if the parents are close to—or already in—retirement, the term may be shortened or an exit strategy demanded to show how the loan will be cleared once they stop working. The full loan appears on the parents’ credit record, materially reducing their capacity to take on new debt until they’re refinanced off the loan.
What is an expat loan and who does it apply to?
An expat loan is a standard Australian home loan that’s been tweaked for borrowers who live and earn overseas but still hold Australian citizenship or permanent residency. It lets you buy, build or refinance property back home while you’re offshore.
Income & servicing
Lenders convert your foreign salary to Australian dollars, then shave up to 20% to cover exchange-rate risk before testing whether you can meet repayments at a higher “assessment” rate. Some currencies—USD, GBP, EUR, SGD and HKD—are widely accepted; others may attract steeper haircuts or be declined outright. You’ll need recent overseas payslips, an employment contract, and three to six months of bank statements showing salary credits. Self-employed expats usually supply two years of audited financials and tax returns from the country of residence.
Deposit, LVR & costs
Most banks cap expat borrowing at 70–80 % of the property’s value. Go above 80 % and you’ll pay Lenders Mortgage Insurance (LMI), which is calculated on the Australian-dollar loan amount. Interest rates are typically 0.25–0.50 % higher than for on-shore borrowers, and some lenders charge a foreign-income assessment fee. Stamp duty rules are the same as for residents because you’re still an Australian national, but check whether any state-based grants require physical occupancy.
Other hoops
- Prove an Australian credit history—maintain at least one active Aussie credit card.
- Nominate a local solicitor to witness mortgage documents and a Power of Attorney if required.
- Budget for currency swings; a stronger Aussie dollar can lift your repayments. Some borrowers hedge with forward contracts.
- Factor in dual-tax obligations: rental income remains taxable in Australia, and you may need foreign-tax credits.
Working with a broker who knows expat policy differences can save time, widen lender choice, and help you navigate exchange-rate and documentation pitfalls.
What’s the difference between negative, positive - and “sweet-spot” - gearing?
Negative gearing
If your rental income doesn’t cover the property’s running costs and interest, you’re running at a loss. That loss can be offset against your other income, trimming your tax bill. Handy, yes, but remember you still have to plug the cash shortfall from your own pocket.
Positive gearing
Here, the rent outstrips all deductible costs, so you walk away with money in your hand each year. You’ll pay tax on that profit, but cash-flow is healthy.
The “sweet spot”
This is the happy middle ground many investors chase.
Your rent more than covers the day-to-day outgoings and interest, so you’re cash-flow positive.
Yet, once you add in non-cash deductions—mainly depreciation on the building and fixtures—you tip into an accounting loss.
That paper loss can still be used to reduce your taxable income, even though, in real life, the property is paying for itself and putting a little extra in your bank account.
In short, the sweet spot lets you keep the cash and pocket a tax benefit at the same time—proof that gearing doesn’t have to be a choice between bleeding money for a deduction or paying tax on every dollar earned.
#PositiveGearing #NegativeGearing #MortgageBrokerAU
How can I tell if a negatively geared property is still helping me build wealth once capital growth and capital gains tax (CGT) are taken into account?
Start by looking past the annual tax refund.
A negatively geared property costs you cash each year because the rent doesn’t cover the interest and running costs. Work out that yearly loss after tax so you know the real hit to your wallet.
Next, estimate the property’s expected capital growth using recent sales of similar homes. Over time, strong growth can more than offset those yearly shortfalls.
Think about how long you plan to hold the property.
The longer you own it, the more chance capital growth has to outpace your cash losses. When it’s time to sell, subtract selling costs such as agent fees and conveyancing (usually two to three per cent of the sale price). Then calculate the CGT. If you’ve owned the property for at least 12 months, you’re generally eligible for the 50 per cent CGT discount, meaning only half the gain is taxed at your marginal rate.
Finally, compare your net sale proceeds (after selling costs and CGT) with the total cash losses you carried while holding the property. If the growth exceeds those losses, the property has added to your net worth; if not, it’s drained your wealth. In short, make sure the expected growth comfortably beats your annual shortfall and future CGT—otherwise, rethink the strategy or seek expert advice.
Better still, engage a qualified and experienced property investment advisor to guide you on making smart property decisions.
Property Investment Professionals of Australia (PIPA) offers a voluntary accreditation program for those seeking to demonstrate expertise and professionalism, with individuals achieving this status being recognised as Qualified Property Investment Advisers (QPIAs). While not mandatory, achieving QPIA status through PIPA is a strong indicator of competence and adherence to a professional code of conduct.
While QPIA is a recognized standard, it’s still crucial for consumers to conduct their own due diligence when seeking property investment advice, such as checking references and verifying experience.
Protecting you: Regulations, Security & Data Protection
How do I know you will not choose a particular bank to get a higher commission?
Under the Best Interests Duty introduced in 2021, we must put your needs ahead of our own or face penalties of up to $1.05 million.
More importantly, we genuinely value the long-term relationships that keep our business thriving, so we’ll always act in your best interests to protect that trust.
How can you be sure we won’t steer you toward the wrong loan?
First up, it’s illegal for us to recommend or help you apply for a loan that doesn’t suit your needs. The law is clear, and the penalties are hefty.
But the law isn’t our only motivator. We’ve spent more than 25 years working with many of the same clients and their families, and we’re not about to risk that trust. We double-check every detail to match you with the right product, and that’s why we need you to share your full financial picture and answer every question honestly. It helps us protect you — and the relationship we value.
How does BIR Finance protect my personal information?
We implement cutting-edge security measures, including:
- Encrypted data storage and transmission
- Secure, compliant document handling
- Regular cybersecurity audits to safeguard against threats
Our commitment to security ensures your financial and personal details remain protected.
#CyberSecurity #DataProtection #FinanceSafety
What happens to my data if BIR Finance closes?
Your information is securely stored in compliance with Australian regulations. We ensure continuity so your financial plans remain safe regardless of unforeseen circumstances.
#ClientSecurity #DataProtection #TrustedFinance
Why are there two Credit Representative Numbers (CRNs)?
BIR Finance operates under two Credit Representative Numbers (CRNs) because there are two entities providing you with credit assistance:
- CRN 505565 – Michael Royal as an individual Credit Representative.
- CRN 517662 – BIR Pty Ltd trading as BIR Finance, as a corporate Credit Representative.
Both CRNs sit beneath the Australian Credit Licence (ACL) 390 222, held by Loan Market Pty Ltd, our compliance partner and aggregator. This dual‐registration model means you are protected at two levels – the company and the adviser – giving you an extra layer of accountability and consumer protection.
#CreditRepresentative #CRN505565 #CRN517662 #MortgageBroker
What is an Australian Credit Licence (ACL) and who holds it?
An Australian Credit Licence (ACL) is issued by ASIC and authorises the holder to engage in credit activities. BIR Finance’s credit work is conducted under Loan Market Pty Ltd ACL 390 222. Loan Market provides the compliance framework, software, and auditing that make sure every loan we arrange meets strict legislative and ethical standards.
#ACL390222 #ASIC #LoanMarketGroup #Compliance
What are my responsibilities as a Credit Representative?
As an individual Credit Representative (CRN 505565), Michael Royal must:
- Act in your best interests and follow the Best Interests Duty (BID).
- Verify your financial situation and only recommend loans you can afford (Responsible Lending).
- Disclose all fees, commissions, and any potential conflicts of interest before you proceed.
- Maintain competency and training through ongoing professional development.
- Protect your data in line with the Privacy Act and ASIC’s cybersecurity expectations.
These obligations mirror those of BIR Finance (CRN 517662) at a corporate level, ensuring a consistent, clientfirst approach across the business.
#BestInterestsDuty #ResponsibleLending #ClientFirst
How does ASIC oversee mortgage brokers and credit representatives?
The Australian Securities and Investments Commission (ASIC) licenses, monitors, and enforces conduct standards in the credit industry. ASIC:
- Grants and can revoke ACLs and CRNs.
- Conducts audits and surveillance to ensure compliance with the National Consumer Credit Protection Act.
- Issues regulatory guidance and takes action against misconduct.
Working under ACL 390 222 with the backing of Loan Market’s compliance team keeps BIR Finance’s processes transparent, ethical, and aligned with ASIC’s consumerprotection mandate.
In our annual internal audit, BIR Finance has consistently scored the highest rating provided by Loan Market. It is a record we are proud of and which we seek to repeat each year.
#ASIC #ConsumerProtection #MortgageRegulation
Is BIR Finance a member of AFCA?
Yes – the Australian Financial Complaints Authority keeps us accountable and fair.
What is AFCA?
Australian Financial Complaints Authority (AFCA) is the external dispute resolution scheme for the financial services industry, and mortgage brokers are required to be members and participate in the scheme. The basis for AFCA regulating mortgage brokers stems from legislation and the need to provide consumers with a mechanism to resolve complaints about financial services, including those provided by brokers.
How does AFCA assist a consumer?
AFCA’s role is to provide consumers with a mechanism to resolve disputes and to promote fair and responsible lending practices.
AFCA has a role in ensuring that mortgage brokers uphold the best interests of their clients, particularly regarding disclosure of conflicts of interest and providing suitable product recommendations.
If a consumer has a complaint against a mortgage broker, they can lodge it with AFCA.
AFCA will then investigate the complaint, potentially seeking information from both the broker and the consumer.
AFCA may attempt to help the parties reach a resolution through negotiation or conciliation.
If a resolution cannot be reached, AFCA may make a formal determination, which the broker is expected to comply with.
AFCA also identifies and addresses systemic issues within the mortgage broking industry that may lead to complaints.
#AFCA #Accountability #TrustedBroker
What is the role of Australian Prudential Regulation Authority (APRA)?
- To keep the banking system safe. APRA supervises banks, credit unions, insurers, and super funds to ensure they remain solvent and well-run, aiming for overall financial system stability.
- It sets prudential rules. It issues standards on capital, liquidity and risk management, and can apply extra “macro-prudential” tools (like buffers or loan-to-value caps) when risks build up.
How does this affects borrowers?
- Tougher serviceability tests. Today, APRA tells banks to check you can repay at 3 percentage points above your actual rate. This usually trims borrowing capacity by 5-10 per cent, but gives a safety margin if rates jump.
- Consistent lending standards. Caps on very high-LVR, interest-only or investor loans have been used to cool overheated markets, affecting which products and amounts borrowers can access.
- Bank strength = borrower security. By forcing lenders to hold more capital and manage risks, APRA lowers the chance of bank failure and supports the government’s deposit guarantee (up to $250,000 per person, per bank).
- Limited wiggle room. Banks can make case-by-case exceptions to APRA rules (about 5 % of new loans), but most borrowers must meet the standard settings.
Get in touch with us today!
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