1300 706 540
Free Consultation
X

Category: Property Investment

Cross collateralisation explained – how it impacts your home and investment loan 

Posted on by Hunter Scribe

If you’ve got more than one property or are planning to invest in property, your lender might suggest something called cross-collateralisation. It’s a common lending strategy, but one that comes with risks you need to understand. 

Cross-collateralisation allows you to unlock equity in your existing properties without selling, but it also links your properties together in a way that can limit your flexibility. 

What is cross-collateralisation? 

Cross-collateralisation is when the same lender uses more than one property as security for a single loan, or for multiple loans that are linked across multiple properties. It means your lender can have a claim over several properties instead of just one. 

For example, say you purchased your first home with a home loan through a mortgage broker in Melbourne. Later, you decide to invest in a second investment property and secure an investment property loan. If your lender cross-collateralises these properties, they will register a mortgage over both your primary residence and your investment property to secure both the loan for your home and the loan for your investment property. You can actually borrow 100% plus costs this way with a single loan if you have the equity available! 

This also means you’re leveraging equity to grow your portfolio. But cross-collateralisation ties your properties together in a way that reduces your flexibility. 

Why cross-collateralisation can limit your flexibility 

One of the biggest drawbacks of cross-collateralisation is how it limits your ability to sell, refinance or restructure without involving all your properties and the bank’s assessment of the entire picture each time you make a decision. 

If you decide to sell one of the properties in your cross-collateralised portfolio, you can’t just sell it and pocket the proceeds. You’ll need to get the lender’s approval, which usually triggers revaluations of any remaining properties, and they might use the sale to reassess your loan terms. They might even keep some or all of the proceeds to reduce your overall loan balance. 

This kind of restriction can be frustrating for borrowers who want to: 

  •  Refinance one property for a better deal 
  • Sell a property to free up cash 
  • Renovate or improve one part of their portfolio 

Working with an experienced investment property loan broker can help you structure your loans in a way that supports flexibility and long-term growth. 

Pros and cons of cross-collateralisation 

Like any lending strategy, cross-collateralisation has its benefits and drawbacks. Here are some key points to consider: 

Pros

1. Helps unlock equity quickly

Using the equity in one property can make it easier to secure finance for another without needing a large cash deposit or multiple loan applications to achieve the same thing across two or more lenders. 

2. Creates simplicity

Some borrowers find it simpler to manage multiple loans under one lender, especially if they are new to property investment. 

3. May improve borrowing power

By securing your loan across multiple properties, lenders may be more willing to offer a higher loan amount than if each property were assessed individually and with different lending polices applied. 

Cons 

1. Less flexibility when exiting

As explained, selling, refinancing or restructuring one property becomes more complex when it’s tied to others. Lender approval is required, and you may not receive all the sale proceeds if they need you to reduce your remaining loan balances.  

2. Limited choice of lenders

If your properties are cross-collateralised, it can be difficult to switch just one loan to a different lender to get a more favourable interest rate or different terms. You might have to refinance all your loans simultaneously, which can be a complex and costly exercise.  

3. Increased exposure to risk

If the value of one of your properties decreases significantly, it can impact the equity available across all your properties. This could lead to a situation where you owe more than the combined value of your properties. 

What are the alternatives? 

The alternative to cross-collateralisation is keeping your loans and securities separate. This approach is sometimes called “standalone” or “non-cross-securitised” lending. 

With standalone lending: 

Each loan is secured by just one property usually up to 80% of its value but up to 95% in some circumstances 

  • You can refinance, sell or restructure without affecting other properties 
  • You keep more control over your portfolio 

A qualified mortgage broker can help you assess whether standalone or cross-collateralisation suits your strategy. It depends on your goals, equity, income and future plans. 

Speak to an experienced mortgage broker before you decide 

For some borrowers, cross-collateralisation can help unlock equity and support faster portfolio growth. But it’s not right for everyone and it’s something you should go into with your eyes open. 

Before you agree to link your loans or properties, speak to a home loan broker who understands how to structure lending for the long term. An expert mortgage broker in Melbourne who clients trust will help you weigh the pros and cons, assess your risk, and explore smarter ways to use your equity. 

Thinking about using cross-collateralisation to grow your property portfolio? Axton Finance can help. As a trusted mortgage broker in Melbourne, we’ll guide you through your options and make sure your loans are set up for long-term success. Call us on today 03 9939 7576, email [email protected] or click here to get in touch.   

What buyers need to know about Victoria’s housing shortage

Posted on by Hunter Scribe

Victoria’s housing market has been under intense pressure in recent years, with supply struggling to keep pace with demand. 

In 2023, the state government pledged to facilitate the building of 800,000 new homes by 2034, a target that requires at least 80,000 new homes to be completed each year.

However, the state fell short in 2024. Australian Bureau of Statistics (ABS) data shows only 60,220 dwellings were completed in 2024. While that’s an improvement on 2023’s 56,435, it’s still 20,000 homes short of the annual goal.

At the same time, Victoria’s population grew by more than 146,000 people in the 12 months to September 2024. This increase of 2.1% annually was the second-fastest growth rate in the country, according to the ABS. 

More people means more pressure on housing – making the supply gap even more urgent.

How the shortage happened

Several key factors explain this shortfall:

1. Labour and skills shortage

One of the biggest constraints is a chronic shortage of skilled tradespeople and construction workers. In October 2024, the Housing Industry Association (HIA) estimated the country would need an additional 83,000 tradies to reach national housing targets.

Both the HIA and Master Builders Association report losing residential construction workers to other sectors, particularly government infrastructure projects. Meanwhile, the pipeline of apprentices and skilled labour isn’t being replenished fast enough.

Without enough workers, construction slows, pushing back completion timelines and limiting the number of homes delivered to market.

2. Supply chain disruptions and rising costs

Global instability and supply chain challenges over recent years have increased the cost of building materials and delayed their delivery.  

According to Ray White, construction costs have started to moderate. In March 2025, Victoria was the only state to record a decline in construction costs, when prices dropped 1.9% annually. This marks a clear shift from the cycle’s peak in mid-2022, when prices were growing 25% or more annually. 

However, moderating costs don’t mean affordability has returned. New homes remain expensive to build – and to buy.

3. Tax and regulatory burdens

Victoria’s relatively high property taxes, including recent land tax hikes on investment properties, have discouraged investors, reducing their willingness to invest in new developments. 

Developers and industry groups have called for tax relief or reform, arguing that without it, many projects risk delay or cancellation.

4. Slowdown in project commencements

There’s now a widening gap between the number of dwellings approved and those actually under construction. As the graph below shows, ABS recorded 55,888 dwelling approvals in Victoria in 2024, but only 33,848 construction starts.

This gap may be due to financing difficulties, labour shortages, and cautious market sentiment amid affordability concerns – or all of the above. Whatever the cause, the result is a growing backlog of unmet housing demand.

What the shortage means for the property market

1. Continued upward pressure on prices

Despite a slowdown over the last few years, Melbourne’s property prices have turned around, increasing 1.2% since the beginning of the year, according to Cotality.

With housing supply already falling short, long-term demand is only expected to grow. Victoria’s population is projected to reach 10.3 million by 2051, according to the latest Victoria in Future projections. Annual growth is expected to average 9.7% by 2026 and 8% by 2036.

This sustained population growth, without a corresponding increase in housing, is likely to keep prices rising in the years ahead.

2. Rising rents and rental scarcity

Victoria’s rental market is tight, partly due to investors retreating amid tax hikes and in response to increased costs. 

The number of rental bonds lodged in Victoria dropped by more than 20,000 in 2024, according to PIPA, following the increased land tax bills. This has reduced the overall rental stock and increased pressure on tenants.

Melbourne’s rental vacancy rate dropped to 1.8% in April, according to SQM Research and has hovered below 2% since early 2022. Asking rents have risen accordingly – up 2.0% in the 12 months to June – as competition for limited rental properties remains fierce.

Government’s response

The Victorian government has taken steps to try and boost housing supply and ease affordability pressures. The 2025-26 state budget included several initiatives:

  • Extension of off-the-plan stamp duty concessions: Buyers of apartments, units and townhouses on strata titles will keep benefiting from reduced stamp duty on the land component until October 2026.
  • Investment in infrastructure and housing: The budget committed $24 million to develop up to 300,000 new homes near tram and train hubs, and $12 million for planning 13,200 new homes with backyards in Melbourne’s outer suburbs.

Despite these measures, experts said the budget does not do enough to support homebuyers. 

The HIA argued that more significant action, like planning reform that streamlines approvals, would do more to add to the state’s housing shortage.

Looking ahead

Victoria’s housing shortage is unlikely to ease without addressing the root causes: labour shortages, high construction costs, supply chain issues and taxation pressures.

That said, ongoing stamp duty concessions and targeted infrastructure investment may present new opportunities for buyers and investors – particularly in emerging development corridors.

With the state’s population set to continue growing, private investment will be crucial to easing the pressure on both the housing and rental markets.

For buyers and investors, working with an experienced mortgage broker can give you a strategic edge. A broker can help you find the right loan, maximise your borrowing power and navigate the finance process, so you can act with confidence in a competitive environment.

Thinking about buying your next home or investment property? Reach out to Axton Finance, a skilled mortgage broker in Melbourne, for expert advice and personalised loan options that put you ahead in Melbourne’s competitive market. Email us at [email protected] or click here to get in touch. 

Melbourne’s housing market is showing signs of growth

Posted on by Hunter Scribe

Melbourne’s housing market is gaining momentum in 2025, with outer suburbs leading the way in growth and demand.

The latest data from Cotality’s (formerly CoreLogic’s) May 2025 home value index shows the city’s market rose modestly between April and May – house prices were up 0.5%, while units grew 0.4%.

While not rapid growth, it’s a meaningful sign of recovery after a flat two-year stretch. So far this year, house prices have risen 1.4%, while units have grown 0.8%.

This steady uptick reflects improving buyer sentiment, helped by recent Reserve Bank of Australia (RBA) rate cuts and more accessible borrowing conditions. The median Melbourne house is now valued at $939,965, ranking fourth behind Sydney, Brisbane and Canberra. A median-priced unit costs $614,689, the third highest behind Sydney and Brisbane.

Despite this rebound, prices remain 4.2% below their March 2022 peak – offering potential value for buyers looking to enter or re-enter the market.

In regional Victoria, the picture is similar. House values grew 0.6% between April and May, while units rose 0.9%. Year-to-date, house prices are up 1.8% and units 0.7%.

Outer suburbs lead the way

The stronger performance of outer suburban areas is a key trend in this recovery. As the Cotality map below shows, 38.0% of suburbs located 20km or more from the city’s CBD recorded growth, with locations like Hume, Frankston and Casey emerging as standout performers. 

By comparison, only 4.0% of suburbs within 5km of the CBD saw a rise in dwelling values.

This shift reflects both current affordability and strong long-term growth potential, especially as infrastructure and planning changes reshape the city’s outer suburbs. Major infrastructure projects like the Suburban Rail Loop (SRL) are highlighting potential locations for growth. The SRL East will link Cheltenham, Clayton and Box Hill, making outer locations far more connected and desirable.

At the same time, the state government’s ‘Train and Tram Zone’ plans aim to unlock more than 300,000 new homes around centrally located zones by 2051. These ‘activity centres’ will streamline planning controls to enable higher-density housing close to train stations and tram corridors, particularly in high-growth outer areas. 

These policies are likely giving buyers greater confidence that today’s affordable suburb could be tomorrow’s hotspots.

Factors influencing Melbourne’s market

Several factors are contributing to Melbourne’s growth:

  1. Interest rates: The RBA’s rate cuts in February and May have made borrowing more accessible. And with the potential for more cuts later this year, buyer confidence is likely to keep building.
  2. Supply constraints: Despite consistently outperforming other states in building completions, Victoria’s housing supply lags behind demand, due largely to the state’s strong population growth. This imbalance between supply and demand is putting upward pressure on prices.
  3. Investor confidence: After a period where investors had lost confidence in Melbourne, that appears to have shifted. As the graph below shows, the number of new home loan commitments to investors in Victoria has risen steadily since June 2023, according to the Australian Bureau of Statistics.

Investor home loans were up 11.5% in the March 2025 quarter compared to the same time last year. In contrast, national investor numbers rose just 8.8% over the same period.

Post-election confidence, strong migration and the perception that Melbourne is undervalued are all contributing to the rebound. In fact, Australian Property Investor Magazine’s Q1 2025 sentiment report found that 19% of investors rated Victoria as offering the best prospects – second only to Queensland.

Looking ahead

Many analysts anticipate that Melbourne’s housing market will continue to experience steady growth. Projections for home values in 2025 range from 3-5% growth predicted by Domain to 2-6% increase expected by SQM Research. 

With immigration surging and infrastructure development adding positive sentiment, Melbourne’s long-term potential remains strong. Recent PropTrack analysis found that house prices in the city could climb 17% over the next five years, reaching a median value of $1.001 million by 2030. 

What does this mean for buyers?

Today’s market presents a potential window of opportunity. Prices are rising, but still below peak – giving buyers the chance to act before further gains.

Buyers looking to upgrade or invest can benefit from the improved borrowing conditions driven by both the recent and expected rate cuts, which reduce the cost of finance and increase borrowing capacity.

Additionally, for those willing to look beyond the inner city, the city’s outer suburbs could offer a strategic chance to build equity in a market set for steady growth over the coming years.

An experienced mortgage broker in Melbourne can help you find the right loan, maximise your borrowing capacity and simplify the process. If you’re an investor, a specialist investment property mortgage broker in Melbourne can provide valuable guidance tailored to your strategy.

Thinking about buying your next home or investment property? Reach out to Axton Finance, a skilled mortgage broker in Melbourne, for expert advice and personalised loan options that put you ahead in Melbourne’s competitive market. Email us at [email protected] or click here to get in touch. 

Victoria Property Investing: Affordable, Underrated and Still Full of Potential

Posted on by Clinton Waters

If you’ve been following the national property conversation lately, you’ll know Victoria has taken a few punches in the media. From new taxes to doubts around investment returns, some buyers are wondering whether it’s still a smart place to invest.

But when you strip away the headlines and look at the numbers, Victoria’s value proposition becomes clearer and in some cases, stronger than other states.

Land Tax: Not Always What It Seems

Let’s take land tax, one of the most debated issues for property investors in Victoria.

For example, on a land value of $1,000,000:

Victoria: land tax approx. $4,770 per annum

Queensland: land tax approx. $4,700 per annum

It’s the same, right?

But here’s the kicker – once the land value increases beyond here, Queensland’s land tax grows faster.

Let’s say the land value is $1.8 million:

Queensland: $17,700 per annum

Victoria: only $11,850 per annum

So while Queensland is often seen as the “investor-friendly” state, Victoria may actually be more cost-effective once you go over the $1M threshold and at a cheaper entry point also! Would you believe that Melbourne’s median dwelling value ($776k November 2024) is ranked sixth lowest among the eight capital cities in CoreLogic’s Home Value Index (HVI) report published November 2024.

How Other States Compare

NSW: Higher tax-free threshold ($1,075,000), but house prices are significantly higher, pushing you easily into higher brackets.

Tasmania: Flat 1.5% over $25,000 – resulting in ~$15,000 land tax each year on a $1.0m property!

WA & SA: Mid-range land tax, but with less capital growth opportunity given the strong bull run of the last few years.

NT: No land tax at all but limited investment-grade property and demand.

ACT: Land tax based comparable but based on a more complicated formula

What You Get for Your Money in Victoria

Melbourne and major regional Victorian cities offer more value per square metre than most other capital cities in Australia.

For example:

A $900k budget in Melbourne could buy a modest renovated home within 20-25kms of the CBD, in a well-established suburb with great amenity and infrastructure. In Sydney, that might only get you a pokey unit or if you are lucky a townhouse much further from the city.

Plus, Victoria offers:

  • World-class schools, universities and infrastructure
  • Rich cultural and lifestyle diversity
  • A long-term track record of capital growth

Source Corelogic https://www.corelogic.com.au

A Word on Sentiment

Yes, the mainstream media has been pretty harsh on Victoria in recent years. But sentiment is just that – sentiment.

Melbourne remains one of the world’s most liveable cities, with comparative affordability to the rest of the country, strong population inflows, and continues to see low rental vacancy rates and high competition for quality homes.

Victoria – Still the Place to Be

As the old number plates once said, “Victoria – The Place to Be.” Based on the number of interstate inquiries we have been fielding in recent months, we still believe this is the case.

So while taxes matter, when you run the numbers and compare them to other states, Victoria stacks up surprisingly well – especially for investors with landholdings close to or over $1M in other states.

Ready to Invest Smarter in Victoria?

At AXTON Finance, we help smart investors structure their investment property loans for long-term success. Our experienced team of eight licensed mortgage brokers have extensive experience in investment lending mortgage solutions – we’ve got your back.

Chat with us today obligation free on 03 9939 7576 or message us here.

The Rentvesting Revolution: Why You Should Consider It

Posted on by Nick

What is Rentvesting?

Rentvesting is an increasingly popular millennial property investment strategy that allows you to rent in your preferred location while purchasing an investment property in a more affordable area. This approach enables you to enjoy the lifestyle you desire without sacrificing the opportunity to enter the property market and start building wealth. Rentvesting also doesn’t need to be restricted to just your hometown—investment opportunities can be identified in affordable interstate markets and high-performing regional areas, allowing you to maximize capital growth potential across different locations.

Why is Rentvesting Gaining Popularity in Melbourne?

  • Melbourne’s expensive property prices make homeownership in prime locations increasingly difficult.
  • Rentvesting provides a pathway to property ownership without requiring a massive upfront investment for an owner-occupied home.
  • You can benefit from capital growth in high-performing suburbs while maintaining lifestyle flexibility.

Why You Should Consider Rentvesting Over Traditional Homeownership

Overcoming the Affordability Challenge

  • The median house price in Melbourne has surged over the past ten years and, despite stabilizing in the last 18 months (at the time of publishing), may accelerate again as interest rates decrease. This can make it challenging for first-time buyers to purchase in their ideal locations.
  • Rentvesting allows you to enter the property market sooner without overstretching your finances, giving you more control over your investment journey.

Enjoy Lifestyle Flexibility While Investing

  • If you prioritize experiences, travel, and vibrant city living, rentvesting allows you to continue enjoying these without being tied to an excessive mortgage in an expensive area.
  • You can live in desirable areas while securing an investment property elsewhere that fits within your financial strategy.

Build Long-Term Wealth Through Property

  • Instead of waiting years to save for a home in your dream location, as prices accelerate away from you, rentvesting enables you to start building equity sooner.
  • A well-located investment property generates rental income, capital growth, and potential tax benefits, all contributing to your financial security.

The Benefits of Rentvesting

  1. Enter the Market More Affordably
    • You can step into the property market with a smaller deposit and lower initial costs.
    • Buying in growth areas provides a stronger potential for long-term capital appreciation.
  2. Take Advantage of Tax Benefits
    • Claim deductions on mortgage interest, property management fees, and depreciation (seek taxation advice for details).
    • Reduce taxable income through negative gearing benefits (taxation advice required).
  3. Create Wealth Sooner
    • Rentvesting can help you build a diverse property portfolio over time.
    • Use rental income to help pay down the mortgage on your investment property.
  4. Enjoy Greater Flexibility
    • Continue renting in your preferred location without being locked into a large mortgage on your primary residence.
    • Adapt easily to career changes, travel, or lifestyle shifts without the burden of selling a home.

Rentvesting Strategies for Success

Choosing the Right Investment Property

  • Research high-growth suburbs in Melbourne with strong rental demand and capital appreciation potential.
  • Select properties with a steady rental yield to ensure a positive cash flow investment.

Balancing Your Lifestyle and Smart Investment Choices

  • Set clear financial goals to align rentvesting with long-term wealth creation.
  • Avoid overcommitting by ensuring mortgage repayments remain manageable—just because a lender says you can borrow a certain amount doesn’t mean it’s the right decision for you.

Securing the Right Outcome

Having the right experts in your corner is essential to turning your rentvesting plans into a reality. By working with experienced professionals, you can make informed decisions that maximise your financial success while minimising potential hurdles.

  • Mortgage Broker: An experienced mortgage broker in Melbourne or Sydney will help you navigate the best loan structures tailored to rentvesting. There are multiple pathways to securing a loan with a deposit that may be lower than you think. This can include industry-specific lending policies for doctors, lawyers, engineers, and essential workers, access to government incentives, hybrid lending products that boost your borrowing capacity, or lenders mortgage insurance (LMI) options that enhance your purchasing power. Speak to the experienced team at Axton Finance today to discover what your options are.
  • Buyer’s Advocate: Engaging a flat-fee buyer’s advocate can provide invaluable insights into identifying and securing high-quality investment opportunities. AXTON Finance now offers this as an optional in-house service to help you accelerate your investment plans and negotiate with a plan that helps you win.
  • Property Manager: A great property manager is crucial to ensuring your investment is well-maintained and your tenants are reliable. They handle the day-to-day responsibilities, including rent collection, maintenance coordination, and compliance with tenancy laws. A skilled property manager will also help you navigate the ever-evolving rental regulations, ensuring you avoid problematic tenants and maintain a stress-free investment.
  • Conveyancer or Solicitor: A legal expert will guide you through the contractual and settlement processes, ensuring a smooth and compliant transaction. Our preferred contacts can even help you review a shortlisted contract before you negotiate – as the saying goes – it’s not what’s in a contract – it’s what isn’t that matters!
  • Pre-Purchase Inspections: Conducting thorough building and pest inspections will help you avoid unexpected surprises, dodgy DIY repairs, and hidden issues that can help protect your investment.

How AXTON Finance Can Help

At AXTON Finance, we specialize in helping first-time investors navigate the rentvesting strategy with expert real-world mortgage advice. Our team ensures you secure the right loan structure and helps you build wealth through smart property investments.

Ready to start your rentvesting journey? Contact AXTON Finance today for an obligation-free discovery discussion on how we can help you achieve your property goals!

Can you borrow money for an investment property under a company name?

Posted on by Nick

At AXTON Finance, we are well-versed in the intricacies of property investment through a company structure. This investment approach, while potentially beneficial in terms of asset protection, tax management, and credit policy assessment, requires a thorough understanding of the specific lending criteria that apply to corporate entities. Our team, with its specialized knowledge and experience, is adept at facilitating these unique transactions, ensuring you secure approval with terms tailored to your investment goals.

Investors considering this route can access up to 95% financing for conventional investment properties or 80% for company low doc (reduced documentation) loans, with commercial properties evaluated individually but usually at slightly lower LVRs (loan to valuation ratios) again. Each lender has distinct policies and loan limits, making our expert guidance crucial.

Investing in property through a company structure presents unique challenges. Not all banks are equipped to handle loans under company names, due to specific processing requirements or policy gaps in their teams. These challenges may include restrictions on professional package discounts or the use of additional financial products like offset accounts and credit cards under a company name. Some lenders may even require all shareholders to guarantee the loan. This underscores the importance of selecting the right lender—one that combines competitive rates with the capability to manage corporate structures effectively. Our team at AXTON Finance is well-versed in these challenges and can guide you through the process.

For instance, if John and Jane Smith, directors of ABC Pty Ltd, decide to purchase an investment property, the setup would typically involve ABC Pty Ltd both as the borrower and property owner, with John and Jane as the guarantors.

Furthermore, companies acting as corporate trustees for trusts have specific borrowing capacities and structures, which our team can also manage by ensuring all legal documentation, like company constitutions and trust deeds, meet target lender requirements.

It’s important to understand that directors might still be liable if a company fails to meet its loan obligations. Banks often require personal guarantees from directors, especially if the company is a shell business or SPV (Special Purpose Vehicle) that does not earn significant income or has been set up solely for the purpose of purchasing the property. This underscores the importance of expert guidance when structuring company loans. At AXTON Finance, we can help you navigate these potential risks and responsibilities.

Any time that you may be considering a loan in a company name you must seek qualified accounting and legal advice to ensure the appropriateness of the proposed structure and that no unintended consequences occur.

At AXTON Finance, we pride ourselves on our expertise in setting up and managing home loans for companies, from simple setups with a couple of directors to more complex joint ventures utilising unit or discretionary trusts. Our extensive experience and deep understanding of lender criteria allow us to identify the best possible rates and terms for your situation.

To explore how we can assist you with your company property investment or to get a tailored assessment, contact us today. Our specialists are ready to provide you with the personalised advice and support you need to navigate this complex area efficiently.

Contact us today to discuss your scenario in detail, obligation-free.

Which Professionals Do You Need When Buying A Property?

Posted on by Luke Rowland

Purchasing a property is one of the biggest financial decisions you will ever make, and at AXTON Finance we know the importance of having the right professionals by your side when embarking on your property journey.

There are several experts involved in the property buying journey, and each plays a vital role in ensuring that you make informed decisions and get the best result. These professionals will also be key to ensuring you receive the correct advice in the future.

Here are some of the important professionals to engage when purchasing a property:

  1. Mortgage Broker: One of the first experts you should engage when purchasing a property is a mortgage broker. An experienced mortgage broker will help you secure the best possible mortgage by understanding your needs and unique situation to then compare various lenders and interest rates. They will also help you determine your borrowing capacity and assess your eligibility for government grants or incentives. By working with a mortgage broker, you can avoid costly mistakes, save a lot of time and money in the process. As one of Melbourne’s best mortgage brokers you will be hard-pressed to get a better professional in your corner. Book an obligation free chat with us today here or call on 1300 706 540.
  2. Solicitor/Conveyancer: A solicitor or conveyancer is another crucial professional you need to engage when purchasing a property. These experts help you navigate through the legalities of the property-buying process. They can help you understand the terms of the sale contract, identify any legal issues, and ensure that you have a clear title to the property. They can also advise you on stamp duty, taxes, and other settlement legal obligations.
  3. Buyers Advocate: Buyers advocates are professionals who work exclusively for the buyer NOT the vendor like real estate agents do. They help you find the right property based on your brief, negotiate the best price, and manage the entire property-buying process on your behalf. They have access to off-market properties, and they can help you avoid common property-buying mistakes. They can also provide you with independent advice on the property, its potential, and its value.
  4. Accountant: An accountant is another important professional to engage when purchasing a property. They can help you understand the financial implications of buying a property, such as the tax obligations, ownership options, negative gearing benefits, depreciation, and expenses. They can also help you set up a structure to minimize your tax liability and advise you on any tax benefits or incentives available to you.
  5. Financial Planner: A financial planner can help you assess the financial implications of buying a property on your overall financial plan. They can help you understand how property investment fits into your overall financial goals and advise you on the best ways to finance it. They can also help you structure your finances, assess your cash flow, assess the adequacy of your insurance protections and plan for your financial future.

So to help maximize the likelihood of a successful property transaction it is essential to surround yourself with the right professionals to guide you through your property-buying journey. Each of these professionals brings a unique set of skills and expertise to the table, and working together with you over time will not only ensure that you get the best result on the initial purchase but the best advice moving forward as you grow your wealth in the years to come.

Is Your Cheap Fixed Rate Mortgage Expiring?

Posted on by Clinton Waters

The pandemic saw a torrent of ultra-low fixed interest rates set up for Australian homeowners and investors alike. However, many of these fixed loans are set to expire, and borrowers will face a sharp increase in their interest rates, which has been dubbed somewhat ominously by the Australian media as the “mortgage cliff.”

The expiry of these fixed rates over the coming months and years could cause significant financial stress for borrowers who are unprepared for the sudden increase in their mortgage payments. In some cases, monthly mortgage payments could double, putting a significant strain on an already elevated household budget.

Thankfully, there are some sound options available for those with fixed rates to mitigate the impact of the so-called cliff!

  1. One of the most effective solutions is to pick up the phone and call your current lender to needle them to improve your rate. It is a well-known fact in the banking industry that it is cheaper to keep a current borrower than to seek out a new one so you might be surprised by what they may be able to offer you. Once you have done this you can compare the market yourself or use the services of a mortgage broker to assist you in comparing like-for-like options.
  2. Failing a decent response from your current bank or lender, you can seek to refinance your home loan. This is best done by a professional mortgage broker, who will be experienced in comparing like-for-like products, policies and structures. Since interest rates started to rise in 2022 lenders have slowly increased the assessment criteria that may result in you being unable to refinance your current loan based on the revised stress-tested rates even though you are making repayments at a higher rate today! Further compounding this complexity is the fact that borrowers with higher LVR’s (Loan to Valuation Ratios) may have experienced a reduction in the value of their property which can make refinancing uneconomical. An experienced broker will help you clearly navigate the benefits and costs early on before you commit to any decision.
  3. Switch your loan to interest only and/or extend the term. This really should be a last resort option because while your monthly repayments may drop considerably, the true long-term cost can add tens of thousands of dollars to the total cost over the life of your mortgage. Extreme caution needs to be applied when looking at this option and getting a professional broker in your corner to model out the effects is highly advisable.

By working with an experienced mortgage broker, like the team at AXTON Finance, we can help you understand the terms of your current loan, including any hidden fees or penalties that could impact the refinancing process.  Will will have a high degree of confidence that your decision will be an informed one that one helps you avoid any costly mistakes.

The mortgage cliff is a looming challenge for borrowers with expiring ultra-cheap fixed home and investment loans. However, there are some simple solutions available, such as refinancing, that can help mitigate the impact of rising interest rates.

Finance Tips For Aussie Expats

Posted on by Clinton Waters

So you are an Australian citizen or an Australian permanent resident (PR Visa holder) living and working overseas and looking at buying or refinancing a property back here in Australia?

We look after lots of time poor Aussies needing help with tailored expat and non resident lending needs from our panel of over 30 major banks and lenders.

The following key questions provides a high-level summary of the available policies generally applied by the major Australian banks and lenders who offer mortgages to Australian expats and non resident with permanent residency status.

What is the maximum LVR that an Australian Expat can get?

The Maximum loan to valuation (LVR) ratio is generally 70% or 80% of a property’s value (some lenders may allow higher up to 90 or even 95% but there are caveats to this which are usually higher rates and mortgage insurance being applied).

How much foreign income can I use?

Your overseas income is usually shaded by 20% for currency risk purposes before converting to Australian dollars ($AUD). The resultant figure is then hypothetically ‘taxed’ at Australian tax rates to determine what net income (after tax income is available to support your loan). This is applied because Australian lenders are generally not resourced to deal with understanding every countries different tax systems.

What if I earn tax-free income in the UAE? 

If you earn tax-free income in the United Arab Emirates (UAE) or similar tax jurisdictions – you may be in luck then. In many circumstances, we have a handful of lenders who will not apply hypothetical Australian tax rates to your expat tax free income in places like Dubai and Abu Dhabi. This will usually result in you being able to secure a larger loan size than what most Australian banks would otherwise approve.

Can I use bonus income as an expat? 

This depends heavily on which lender is being proposed and how often the bonus income is paid. It can be difficult to use for servicing purposes when it comes to expat and non-resident lending.

How much income do I need to secure an expat loan approval? 

Because of the rules above that most lenders apply, your taxable income generally needs to exceed $250,000 AUD PA equivalent. Shading due to currency risk and different tax assessment rules can significantly reduce your borrowing capacity as an expat.  If your income is less than this it is often very difficult for us to meet current expat lending rules even for modest loan sizes.

What currency do I need to earn to be eligible for an Australian expat home loan?

Most lenders require that your income is earned in primary currencies like;

  • United States Dollars (USD)
  • Pound Sterling (GBP)
  • European Euros (EURO)
  • Singapore Dollars (SGD)
  • Hong Kong Dollars (HKD)
  • Japanese Yen (JPY)

A smaller list of lenders still accepts other countries depending on individual lender policies and includes but are not limited to;

  • Indian Rupee (INR)
  • Indonesian Rupiah (IDR)
  • Vietnamese Dong (VND)
  • Chinese Yuan (CNY) / Renminbi (RMB)
  • Emirati Dirhams (AED)

What if my payslips and other supporting information are in a foreign language?

If your support documents are not in English they must be translated into by an accredited translator (most Australian lenders accept NAATI as a standard translation service).

What if I don’t have Australian Citizenship or PR Visa status – can you help me?

Unfortunately if you do not hold Australian citizenship, PR residency or New Zealand citizenship we are currently unable to assist you based on our available lending policies.

I am a self-employed expat – can I secure loan approval? 

Being self-employed has many benefits but borrowing money as a self-employed expat can greatly reduce the number of lenders who may be able to support your plans. While not impossible we may be able to assist you especially if your tax returns are up to date and are published in English.

I want to know more about expat mortgages – how do we meet?

Want to get some tailored mortgage advice from someone who knows what they are talking about then feel free to book a time here for a quick 15 minute chat or jump onto the chat box on our website now (it will confirm if one of our brokers are online for a chat).

Book your 15 minute online chat here!

Of course, you can also call us in the office on 1300 706 540 for a chat during normal business hours. If we miss your call leave a message and one of our team will usually get back to you within one or two business hours.

10 tips that can help your mortgage application

Posted on by Clinton Waters

As you have probably heard in the media the nations lenders have clamped down on their lending criteria as a result of pressure from various government agencies like APRA and ASIC and from recommendations made during the Banking Royal Commission into banking misconduct.

It would be fair to say that many lenders have perhaps taken this a little too far which has resulted in a market place full of inconsistent applications of an incomprehensible set of rules for borrowers to deal with.

As a result of this we felt that the following information can be used as bit of a guide to help maximise your chances of securing finance approval by implementing any number of the following tips.

1. Fill out your application form in full

Lenders will often apply a score to your loan application based on the information you supply and if you skip on optional questions this can be detrimental to the strength of your application if things a little tight. For example even if you have a savings account with another bank with a small amount in – tell your proposed lender. If you have a middle name don’t forget to include it – it matters. If you have moved a couple of times try and be accurate with your living history as lenders often marry up data they can see on your credit file with the information supplied in your application.

If you are looking to refinance or buy your next property check out client fact find here – this is a fantastic form which is responsive to asking you the questions we know a lender will want to know – nothing more and nothing less! We can contact you after you have completed to run some tailored options past you.

2. Don’t submit your application to too many lenders or brokers

Lenders get very concerned when they see on your credit file that you have applied to a number of credit providers within a short period of time for about the same amount of money. The lender in question will often take the pessimistic view and think that there is something wrong with your application and has been declined by other lenders prior to it so will pick over your file with more detail trying to find out why you would apply so many times.

3. Do you have credit defaults?

This might sound scary and a reason for a lender to decline a loan but many lenders have different policies that may consider your scenario depending on the circumstances and what you have done to remedy the situation. As a general rule of thumb defaults from utility providers like power and telecommunication companies have less impact on your scenario than do defaults on financial service providers like personal loans, credit cards and home loans.

It is important to realise that with the evolution of the positive credit reporting regime lenders can now increasingly see the conduct of other institutions credit facilities. So if you are late on your credit card payment with the CBA and your home loan application is with Macquarie Bank, then there is a good chance that they can see this on your credit file down to which months you were on time and those that were not!

Treat your repayment history with a healthy level of respect and you will find your application will run pretty smoothly. A good mortgage broker or banker will be able to work with you prior to submission to identify any sort of severity and work out the best course of action and the lenders most suited the scenario you have presented.

If in doubt you can get a free copy of your credit file from mycreditfile.com.au (a service from Equifax Pty Ltd). We can take a look at it for you free of charge and provide you with some insight – feel free to contact us here.

4. To Afterpay or not…

The advent of the ‘buy now and pay later with no interest’ companies like Afterpay and Zip Pay creates an interesting situation for lenders. In simple terms these are not seen as a great look on your bank statements because the lender makes the assumption that these often relatively low cost purchases were made because you did not have the money in the first place and with retailers quick to jump on the band wagon with this offering its even available on products and services that may be considered essential. Our recommendation is generally not to have these buy now pay later arrangements if you are seeking to make a mortgage or finance application.

5. Support Docs

You will of course have to supply items like payslips, ID, mortgage statements and tax returns etc depending on your situation. This often slows down the process when the information requested is not provided in a timely manner. Many lenders simply get to your file and if information is missing they request whats needed and place your file at the back of the queue again. Sometimes information supplied can result in additional questions being asked so be prepared for this to happen and its nothing unusual albeit it can be frustrating.

6. How much do you spend?

OK I get it that a budget is boring but again an increased focus is being made on just how much borrowers are spending on living expense and there is a general reduction on the reliance of HEM (Household Expenditure Measures) standards and a more tailored approach. Having a summary ready before your finance meeting will help you have a more productive and realistic expectation of your borrowing capacity for any sort of approval. There are often many ways that you can reduce and improve your living expense without making drastic changes in the months lading up to when you are looking at securing a mortgage. Go through your statements and look at where you may save money via;

  • Reducing utility bills by shopping around suppliers
  • Reducing or eliminating credit card debt
  • Do your food shopping with a list and don’t buy by impulse
  • Take a packed lunch (this $10 per day can save you $216 per month in after tax dollars!)
  • Love coffee (so do we) but consider a pod machine or something similar over the 4.90 large flat white with almond milk once or twice a day
  • Pay yourself first (savings) – putting money away first before you pay for everything else is a simple yet powerful process to help you get ahead. Think of every time you get a pay rise how easy it is spend that new amount of hard earned cash! There are some great online tools that can help with this. One that we love is Raize.com.au and ING Bank – these two companies have variations of a system that automatically squirrels away savings by rounding up your purchases to the nearest dollar and allows a regular savings plan. Simple, effective and above all – happens without effort. (note if you click the link above to Raize you receive a $5 credit to your new account as do AXTON Finance)

7. What happens if you are having or planning for a child

Lenders are now required to ask about any expected changes to your future income that may affect your ability to meet repayments. This of course is a requirement to be answered truthfully and is strengthened by your ability to provide other information about how you may deal with such a situation. For example if you are about to go on maternity or paternity leave you could state that you have a certain amount of funds available for the estimated period of you being on reduced income to meet the commitments of your loan. A return to work letter and using a lender with a strong appetite for this sort of scenario will also help you a lot.

8. How good is your mortgage broker or banker?

Of course we may be a little biased here but having an experience broker working with you will help explain things in plain English for you and be across the lending policies of dozens of lenders and not just one (like you would get directly at a bank).

The quality of your application submission that is made by your broker or banker can really dictate how smoothly your application goes. Do some simple research like looking up your preferred broker or banker online through Google, LinkedIn and the other usual social media links. Usually you will get a pretty quick impression as to how experienced and professional they are. If in doubt trust your instincts!

9. Consider the wider market

It is often that the more competitive products and policies lie outside the big four banks. Well over 50% of all mortgage lending goes to just four of the major banks. At AXTON finance, only 20% of our lending in the last six months has gone to a majors! There are better deals to be had if you are willing to look outside of the square it can save you tens of thousands over the life of your loan.

10. Is the cheapest rate the best?

A business mentor once told me of the following three things;

Good, fast and cheap…. pick two. It is impossible to have all three. 

Wise words to live by indeed.

A quick search of the internet may list some amazing rates that look too good to be true and while it is still may be worthwhile considering you should also think about;

  • How volatile is that rate online? Sometimes a great rate may be unsustainable for a lender to offer for a long term and you end up getting rate creep with increases outside of RBA changes. While you will be rather annoyed if this happens it would be good to understand what sort of history has been evident with the lender in question?
  • Does the lender’s computer say NO?.  In many instances lenders try and shoe horn customers into rigid processes with offshore credit decisioning driven by computer systems. If you fall outside of this sort of lenders policy due to any complexity then you want a human with experience going into bat for you. Paying an extra 0.1% or 0.2%pa in rate can often mean the difference between submitting to a lender who may view your application as being poor versus another one that is fine with your set of circumstances. Use a quality mortgage broker who understands the rules to maximise your outcomes and reduce your stress.
  • Does the lender have a good application and onboarding process or is it a process with baked in systems that worked in 1991 when fax machines were cool? This can have a significant impact on turn around times – a good broker will have excellent experience of this fist hand and can guide you.
  • Cheap online specials often blow out credit application queues resulting in turn around times that can take weeks (even months). Currently there is one lender that is out to almost 20 business days to pick up a file – do you have that sort of time to wait?
  • Enquire about what sort of service the lender has with clients. A quick look up of reviews online can give you a feel about one lender over another. However read with caution as people often use the internet to complain and rarely to praise.
  • Ensure that you understand the product that you are seeking really does have the features you need. There is no point paying for stuff you are unlikely going to benifit from if there is a cheaper and/or simpler product available that does what you need it to?

So there you have it – ten tips on helping get your mortgage application approved!

Please feel free to contact us on 1300 706 540 and ask for Clint or one of the team to help you out. We a sure you will love speaking to an experienced person and not a call centre!

Best regards,

Clint Waters
0422 464 353
AXTON Finance

×
×

Get in touch with the expert brokers at AXTON

We will contact you within 10 minutes or sooner during business hours for a quick high level discussion.

"*" indicates required fields

This field is hidden when viewing the form
This field is hidden when viewing the form
DD slash MM slash YYYY
This field is for validation purposes and should be left unchanged.

"*" indicates required fields

This field is hidden when viewing the form
This field is hidden when viewing the form
DD slash MM slash YYYY
This field is for validation purposes and should be left unchanged.