Question 1

What is the benefit of using a mortgage broker instead of going direct to my bank?

Accepted Answer

Your bank can only offer their own products. A mortgage broker compares products across a wide panel of lenders — major banks, mutual banks, credit unions, and specialist non-bank lenders — and often has access to rate discounts not available to the public. They also guide you through the application process, liaise with valuers and solicitors, and represent your interests with the lender. Their service is typically free to you, as they're paid by the lender on settlement.

Question 2

Can I get a home loan with a 5% deposit?

Accepted Answer

Yes, in some cases. The First Home Guarantee (formerly FHLDS) allows eligible first home buyers to purchase with as little as 5% deposit without paying Lenders Mortgage Insurance (LMI), with the government guaranteeing the remaining 15%. Eligibility criteria apply including income caps and property price limits. A specialist first home buyer broker can assess your eligibility and identify the most appropriate lender and scheme for your situation.

Question 3

What is a novated lease and is it right for me?

Accepted Answer

A novated lease is a three-way agreement between you, your employer, and a finance company. Your employer makes lease repayments from your pre-tax salary on your behalf, reducing your taxable income. Running costs (fuel, registration, insurance, servicing) can also be included in the package. The tax savings can be significant — particularly for higher-income earners. The arrangement ends if you change employers, though you can take the lease with you or refinance.

Question 4

How do I know if I have enough life insurance?

Accepted Answer

Most financial advisers recommend life insurance coverage of at least 10 times your annual income — enough to replace lost income, repay debts (including your mortgage), and fund your family's ongoing needs. Income protection insurance (covering up to 70% of your income if you can't work) is equally important, particularly for people with mortgages and dependants. A licensed insurance adviser conducts a needs analysis based on your specific situation to recommend appropriate coverage levels.

Question 5

Is it a good idea to consolidate my credit card debt with a personal loan?

Accepted Answer

Debt consolidation can make sense if the personal loan rate is significantly lower than your credit card rates (typically 20%+ p.a.) and you can commit to not reusing the credit cards after consolidation. A lower rate can save significant interest, and a single repayment is easier to manage. However, if consolidation extends your total repayment term significantly, the total interest paid may be higher even at a lower rate. A specialist finance broker can model the actual cost comparison for your specific debts.

Finance & Insurance Solutions for Families & Individuals

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Home & Contents Insurance

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