Home Loans

Better choice. Better solutions.

Better Choice Mortgage Services are a team of finance specialists who have been assisting West Australians for the past 25 years to identify the most suitable home loans for their situation.

All of our home loans offer a vast and differing range of features and benefits, some which may be more suitable to you than others.

Finance is what we are about & helping Aussies reach their home owning goals is what we do . Home loan finance can be quite daunting . You can either do all the legwork yourself , trying to work out whether the Lender you’re dealing with will approve your loan & if they do will they give you a real competitive interest rate & product …… or for no cost to you , you can enlist the services of a Better Choice home loan expert who has access to over 60 different lenders that will manage your home loan process from go to wo . We work for you and not the bank, and by getting to know your specific circumstances we’ll be able to match you to the most appropriate lender & the most appropriate home loan . With Mortgage Brokers having greater than 70% of home loan market share , we are a powerful force within the industry & able to negotiate for you from a position of real strength .

Our service to you doesn’t stop after your home loan goes through & you move into your home . We actively encourage you to contact us post settlement of your home loan for any type of product switches & especially to ensure that the interest rate you are paying is as competitive as it came be . We’ll ride with you & we’re in for the long-haul .

Better Choice Mortgage Services are a team of Home Loan experts who have been matching Aussies to the most appropriate home & investment property loan since 1999

Better Choice home loan experts take very seriously that fact that our clients have entrusted us to get them the most competitive home or investment loan possible. Unlike the banks , you are able to contact your Better Choice Mortgage Broker 7 days a week.

Since 1999 , Better Choice have been an award winning Broking House winning numerous state & national Mortgage Broking awards. These awards are a testament to Better Choice’s choice of lenders , expertise, professionalism , integrity and superior levels of service.

Download our useful Purchasing Property Checklist to help you with your Home Buying process.
If you would like to apply for a home loan today then click here!

Alternatively, we would love to speak to you!
Call us on 1300 805 221 or email bdm@betterchoice.net.au and let us help make your real estate dream a reality !

If you need more information on any home loan products, contact us today call 1300 805 221.

Types of loans

Professional Packages or Pro Pack loans offer the borrower benefits not only on their home loans & investment loans , but also on their day to day bank account/s, credit cards & other banking products.

As part of a package, the client sources all of their day to day banking needs from the lender that provides their home loan. Generally, the home loan interest rates are significantly discounted but yet still is the lenders’ fully optioned home loan.

In the main, the client’s bank account and credit cards are fee free and home loan applications fees are waived. The client generally pays an annual fee, but due to competition some lenders do not charge an annual fee, (this is by far the exception). The interest rate discount varies in line with the size of the loan and minimum lending of $250,000 is required to be part of the professional package.

With discounts to variable and fixed interest rates, pro packs invariably delivers the cheapest rate to the client.

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This feature is generally only available with Standard Variable Home Loans and Professional Pack Loans. It is normally not a feature associated with:

Basic Loans
Fixed Rate Loans

It is interesting to note that due to the competitive nature of the lending industry, certain lenders do offer the 100% offset feature with Basic loans and fixed rate loans.

With 100% offset loans, your loan is linked to a bank account you have with that same bank, (your 100% offset bank account).

In the main, the 100% offset bank account is your everyday transactional bank account. For every dollar you have in your 100% offset bank account, the bank does not charge interest on that dollar of your home loan.

If you have a loan with the 100% offset feature, all of your savings should be held within the 100% offset account. That is, consolidate all of your savings into the one account, the offset account.

Having all of your savings in a 100% offset bank account is more beneficial than having your savings in an interest bearing bank account .

The offset account will save you interest on your home loan, whilst an interest bearing account will earn you interest, thus raising tax implications.

Many Lenders offer the borrower more than 1 offset bank account per loan . 9 offset bank accounts linked to the one loan is not unheard of , even 99 !!

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The vast majority of variable rate loans have the redraw feature, few fixed rate loans have this feature (but some do).

Redraw allows you to redraw from your home loan repayments you have made over and above the minimum.

That is, you are able to draw back the advance payments you have made to your loan. You may use these funds for any worthwhile personal purposes, for example:

Home improvements
Updating the car
A holiday
Buying shares

Redraw allows you to accelerate the repayments on your home loan, with the comfort knowing that if something unexpected occurs you can withdraw your advance payments.

Accelerating your repayments will help you to pay your loan off quicker.

The vast majority of Lenders do not charge a redraw fee if the redraw is actioned through internet banking . Some Lenders have a minimum redraw policy .

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As the name implies, a basic loan is generally a lenders variable rate loan with fewer features and with minimal or no ongoing fees. Basic loans generally do not have the 100% offset feature which is a feature that all pro pack loans have .

What are the characteristics of a basic loan:

Redraw feature is available
Minimal or no ongoing fee’s
In some cases the 100% offset feature is available with no frills loans

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Fixed rate home loans are just that. That is, the interest rate will not rise or fall during the fixed rate term. You can fix the rate anywhere from 1 to 10 years. We strongly advise our clients to carefully consider the pros and cons of FRHL before they opt for this loan type. The penalties to exit a FRHL early can run into tens of thousands of dollars.

FRHL’s are less flexible that variable rate loans, i.e.

In the main, you are limited in how much you can make in extra repayments over & above the minimum repayment – this ranges from an additional extra repayment of $10 000 per annum to $30 000 over the fixed rate term. We do have one lender that will allow significant additional payments with no penalty.
Largely, they do not have a 100% offset feature, although one or two lenders do offer 100% offset on their fixed rate loans .
Generally , they do not have the redraw feature, again – a number of lenders do offer a limited version of redraw .
Remember the fixed rate you applied for may not be the fixed rate you get when the loan settles. To guarantee that you get the fixed rate you applied for you may wish to rate lock your loan . Rate lock fees apply & the rate is locked for up to 90 days before settlement.

To counteract the draw backs of FRHL’s, we suggest the borrower may wish to consider a combo loan- part fixed and part variable.

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Security and flexibility

Want the security of knowing that your interest rates will not increase for up to 10 years, but don’t want to sacrifice all the great flexibility of a variable loan?

Then we suggest you apply for a ‘Combo Loan’, i.e. fix the interest rate on part of your loan for up to 10 years, and leave the other portion of the loan on a variable interest rate.
We strongly advise our clients to carefully consider the pros and cons of fixing the rate on a portion of your home loan . The penalties to exit a Fixed Rate Home Loan early can run into tens of thousands of dollars.

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The Line of Credit (LOC) is the ‘King of Flexibility’. LOC’s are generally evergreen facilities, ie there is no term or end date to the loan. The borrower can use as much or as little of the LOC limit as they would like and only pay interest on what you actually use. Large lump sum repayments can be made at any time and then these funds can be redrawn for another personal purpose.

With internet, phone & ATM access to funds , LOC’s are the perfect loan product for:

Share and managed funds investors
Borrowers who wish to operate their own mortgage minimisation program. (see your financial advisor before embarking on a mortgage minimisation program)
Borrowers who do not require the total loan proceeds all at once and wish to progressively draw down the loan.

Unfortunately in recent years a number of Lenders have discontinued offering a LOC as part of their product suite . Lenders that continue to offer LOC’s have increased the rate on an LOC far in excess of the best rates offered . LOC’s are generally priced at the Lenders Standard Variable Rate .

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So you have found the home you want to buy, but you haven’t even placed your existing home on the market.
To top it off, the Real Estate Agent is saying, “Don’t bother putting an offer in subject to the sale of your existing house”. What can you do? Consider a home to home loan!!

If you have a sufficient amount of equity in your existing home the lender may fund the purchase of the new home, prior to you selling your existing home.

But hold onto your horses, this loan doesn’t possess magical properties, and there is no denying you would be carrying considerable amount of debt whilst you sell your existing property.

There are two ways the lender will assist you in making the repayments ie. the lender will allow the interest to accumulate to the bridging portion of the peak debt i.e. that amount that will be repaid from the sale of your existing home . Or the lender will advance you additional monies to help with the repayments during the bridging period .

The lender will allow you up to 12 months to sell your existing house. The bridging portion of your peak debt normally attracts a higher interest rate ( the Standard Variable Rate )

Please consult your Accountant and/or Financial Planner before applying for a home to home loan.

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As opposed to purchasing an established property many of our clients chose to purchase a block of land and build their dream home,.

This way, our clients get the exact home that they want.

Construction loans are more involved than loans to purchase established homes, but let Better Choice take the hassle out of it for you.

More often than not, you will initially have two loans, i.e. one loan for the land and one loan to construct the home.

You may chose to consolidate the 2 loans into one loan on the completion of the construction ( conditions apply ) . During the construction phase, the lender will control the release of funds to the builder. That is, at each stage of the 4 or 5 stages of construction , the builder will issue an invoice which will be sent to the Bank for payment. The bank will seek the borrowers authorisation before payment.

As the construction loan is drawn down in stages, you, the borrower only pay interest on what is outstanding on the loan at any point in time.

Generally construction loans are only available on a variable rate. Just remember the golden rule of construction finance , the borrowers total deposit must go into the build upfront before the Bank will draw any funds from the construction loan.

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These days few loans are written as Standard Variable Home Loans (SVHL). Most Lenders use the SVHL interest rate as an “ indicator “ rate from which they will discount as part of their Pro Packs . The bridging portion of a home to home loan is normally priced at the Lenders SVHL . Lenders that offer Lines of Credit normally price LOC’s at SVHL .

The SVHL certainly is fully featured, i.e. 100% offset and fee free redraw are features of SVHL.

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A significant casualty of the 2008 global financial crisis was the NDHL. Whilst NDHL no longer exsist in its purest form, e.g. $550,000 purchase, $550,000 loan, there are situations where certain borrowers will not have to put up a cash deposit.

Examples of these situations include:

Purchasers that pledge the equity within a property they already own, as security for the loan to purchase the new property
Purchasers that have family prepared to offer a security guarantee, i.e. a mortgage over their property for the borrower’s home loan.

Notwithstanding that a NDHL in its purest does not exist , we still have major Lenders lending to 97%/98% of owner occupier purchases & 97% of investment purchases ( mortgage insurance fees apply )

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Reverse Mortgages are best suited to borrowers who seek to convert the equity in their homes into cash. This style of loan allows the cash-poor, asset-rich to tap into the value of their property without having to sell it.

Reverse Mortgages are available to Borrowers of 65 years of age and above. As a rule of thumb, these Borrowers can borrow up to approx. 25% of the value of their principal place of residence. The reverse mortgage is payable when the house is sold or the last borrower moves into aged care.

It is a given that clients seek independent legal and financial advice prior to applying for a reverse mortgage. Better Choice also recommends that clients discuss a reverse mortgage with all family members prior to applying for a reverse mortgage. If the borrower is receiving a Government pension , they also need to consult Centrelink prior to entering into a Reverse Mortgage loan . Please look at the moneysmart calculators at ASIC calculators here.

With any loan there is of course interest to pay, however a reverse mortgage requires no monthly payments. Instead, the loan + the interest accumulated over the term of the loan is repaid when the house is sold. In other words, the interest is capitalised which means it’s added to the amount of the loan.

Very few Lenders offer reverse mortgages , consult your Better Choice Mortgage Broker.

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Are you self-employed and have difficulty in proving your income?
Is your credit history less than perfect?
Are you a PAYG wage earner with a less than clear credit history ?

If you answer “yes”, you may wish to consider a Alt Doc loan.

Alt Doc loans and Alt Doc lenders are also high profile casualties of the global financial crisis.

There still exists lenders that provide Alt Doc loans, but there are fewer players in this market segment than 15+ years ago.

Changes to Alt Doc loans since the global financial crisis:

Fewer products/providers in the market place
Pricing for risk, i.e. the more challenging the borrower, the higher the rate

A minimum 2 of 3 forms of income verification , i.e. 6 months business bank statements , or last 6 months BAS statements , or Accountant’s deceleration

Better Choice strongly recommends that borrowers seek independent legal and financial advice prior to taking out an Alt Doc Loan.

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At Better Choice Mortgage Services we understand that the burden of significant cash out lay once the vendor accepts your offer can be difficult or impractical. Your cash may be tied up in a term deposit which may prove costly to break or the majority of your cash may be tied up in real estate equity and accessing this equity may take longer than is practical. And if you are ‘buying off the plan’ your deposit may be ‘tied up’ for up to 5 years!

The solution to these conundrums may be a Deposit Bond (DB). A DB takes the place of the cash deposit required between the time the vendor accepts your offer and the day of settlement. At settlement you must pay the final purchase price of the property (including the amount of the DB). Your loan or cash equity takes the place of the DB.

DB’s are especially useful in purchasing apartments off the plan where the vendor requires a 10% deposit and the apartment may take up to 5 years to complete.

A DB is also useful in Australian states where a 10% deposit is the norm eg NSW.

If you, as the purchaser fail to settle on the property the vendor may then request that the DB issuer pay to the vendor the face value of the bond. The issuer of the DB will then pursue you for the face value of the bond.

Advantages of DB’s:

Cost effective: The once off premium is generally less than interest costs if you were to raise a loan for the deposit.
The application process for DB’s is very streamlined and a DB may be available within 5 days of application
Saves you having to break term deposits or access equity within existing properties
Especially useful when purchasing apartments off the plan, where your deposit may be tied up for up to 5 years.

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Other considerations

The lender will take 100% of a borrower’s base pay or income. As duty of care or compliance is playing a more important role, lenders are now starting to scale back as to what percentage they will utilise of the following forms of income

Overtime
Penalty rates
Site Allowances
Commission

If a borrower can demonstrate that they have been in receipt of these incomes for say two years, then the lender is more likely to take 100% of this income.

Lenders will accept 100% of the above forms of income for borrowers that are deemed to be employed within “ Essential Services “ , i.e. Police , Fire Brigade , Health , Education etc .
If not employed within essential services , most Lenders will “ shade “ the above incomes by 20% .

With self-employed applicants the lender will utilise the average of the last two years profit (but no more than a 20% increase over the previous year) and then add back expenses such as:

Depreciation
Interest
Directors Wages
Non recurring expenses

Certain Lenders will take a self employeds most recent tax return in isolation
With rental income, the lender will generally take approximately 80% of the rental income. By “ shading “ the rental by 20% the lender is accounting for management fees and vacancy.
Government income. Generally the lender will take 100% of Family Tax A&B for children up the age of approximately 11. Lenders are more resistant to take into account income such as new start allowance, carer’s pension and invalid pensions, but this does vary from lender to lender.

Generally a lender will take 50-100% of child support income as long as it has been assessed by the child support agency and the borrower has been in receipt of the income for at least 6 months.

Acceptance of overseas income varies from lender to lender & is usually shaded by 10% – 20% to allow for currency fluctuation .

This feature is generally only available with Standard Variable Home Loans and Professional Pack Loans. It is normally not a feature associated with:

Basic Loans
Fixed Rate Loans

It is interesting to note that due to the competitive nature of the lending industry, certain lenders do offer the 100% offset feature with Basic loans and fixed rate loans.

With 100% offset loans, your loan is linked to a bank account you have with that same bank, (your 100% offset bank account).

If you have a loan with the 100% offset feature, all of your savings should be held within the 100% offset account. That is, consolidate all of your savings into the one account, the offset account.

Having all of your savings in a 100% offset bank account is more beneficial than having your savings in an interest bearing bank account .

The offset account will save you interest on your home loan, whilst an interest bearing account will earn you interest, thus raising tax implications.

Many Lenders offer the borrower more than 1 offset bank account per loan . 9 offset bank accounts linked to the one loan is not unheard of, even 99 !!

The vast majority of variable rate loans have the redraw feature, few fixed rate loans have this feature (but some do).

Redraw allows you to redraw from your home loan repayments you have made over and above the minimum.

That is, you are able to draw back the advance payments you have made to your loan. You may use these funds for any worthwhile personal purposes, for example:

Home improvements
Updating the car
A holiday
Buying shares

Redraw allows you to accelerate the repayments on your home loan, with the comfort knowing that if something unexpected occurs you can withdraw your advance payments.

Accelerating your repayments will help you to pay your loan off quicker.

The vast majority of Lenders do not charge a redraw fee if the redraw is actioned through internet banking . Some Lenders have a minimum redraw policy.

What you need to know about Property Lending Ratios.
The loan amount as a percentage of the value of the property ( the Lender’s security ) is referred to as the Loan to Value Ratio or LVR . See the diagram below .

Generally Lenders will lend to 80% LVR of the purchase price or value of the property which invariably is one in the same thing .

Lenders will in fact lend more than 80% LVR of the purchase price or value, and in fact up to 97% LVR, but when lending above 80% LVR the lender will in the vast majority of cases insure ( mortgage insurance or LMI ) the loan against potential loss. You, the borrower will pay the insurance premium on behalf of the lender. This insurance premium can run into many thousands of dollars.

Instances where Lenders will not insure loans where their exposure is > 80% LVR include :

Medico loans .
First Home Guarantee ( FHBG ) loans .
Where the borrower provides the Lender an additional property as security for the loan & the Lender’s overall exposure is < 80% LVR .

The type & location of the Lenders security property has some bearing as to what maximum exposure the Lender will lend to. The lender may scale back the 80% LVR (no LMI) or the 97% LVR (LMI payable) on the following property types, i.e.

Dwellings less than 40m²
Rural or regional property
Vast acreage
Vacant land
Heritage listed properties

FAQs

All our Mortgage Brokers are registered credit representatives of Better Choice Mortgage Services. They are also all accredited with Mortgage & Finance Association of Australia (MFAA) and Australian Finance Group (AFG).

All BC’s Mortgage Brokers have to also undergo accreditation courses with each lender to familiarise themselves with the various loan products.

All of them also have either prior experience in the banking/finance industry or relevant tertiary qualifications.

You can be assured that our Mortgage Brokers know what they are talking about!

Better Choice Mortgage Services has been established since 2000, first located in Claremont and now in Balcatta.

Whilst Better Choice was established in 2000, our Directors have been in Finance for longer than this.

Vic Giannakis, a CPA qualified Accountant, started in the industry in 1994.

Sebastian Scurria entered the finance industry in 1992

For more information about the company, please click here.

Better Choice Mortgage Services has won the Australian Finance Group (AFG) W.A Champion Business Award 2008-2020. Better Choice has been an AFG W.A Champion Business Award finalist since 2020 . Not only are our Mortgage Brokers contactable 7 days a week , our Mortgage Brokers can also potentially offer you 1000’s of differing home loan options .

With access to over 40 different bank and non bank-lenders to give you the best possible finance outcome . With cutting edge industry IT , coupled together with our strategic contacts with Lender decision makers , Better Choice Mortgage Brokers are up to date with the myriad of lending products available & just as importantly the differing Lender policies . This ensures as much as we possibly can, that your finance application is lodged with the most appropriate Lender the 1st time , every time . Why try and do all this legwork yourself when our professional industry experts at Better Choice can do it for you & there is no cost to you ? Think about it , you approach a Lender directly , that Lender will only offer you a product from their suite of products . That Lender won’t advise you of what the Lender down the road is offering …. which may be superior . Find out what the Lending market is doing from 1 source , your Better Choice Mortgage Broker ; contact us for a full product suitability assessment today.

There are a myriad of associated cost in purchasing a home! Outlined below are some of the costs that a borrower may need to pay.

Stamp duty on the transfer of the title of the home or block of land into your name. In a number of Australian States, First Home Buyers and or/owner occupiers may get some stamp duty relief. For example, in West Australia, First home buyers may qualify for the following stamp duty relief, i.e.
- Established home up to $500,000 purchase price the purchaser pays $0 stamp duty . Between $500-$700,000 the 1st homebuyer will pay a discounted stamp duty
- Land up to $350,000 purchase price the 1st homebuyer pays $0 stamp duty. Between $350-$450,000 the 1st homebuyer will pay a discounted stamp duty . See First Home Owners Grant fact sheet here Visit Now
Settlement Agent Fees are another fee that the borrower will encounter. Settlement agents will manage the conveyancing of the property through to settlement. At one time there existed a standard schedule of fees depending on the price of the property, but no longer . The Settlement Agents industry is highly competitive so we strongly recommend you “ shop around “ for a few quotes on the fees to settle your property . Ask your Mortgage Broker for a Settlement Agent referral .
Transfer Registration Fees is a Government fee a borrower must pay to register the “Transfer of Land” ( to transfer the property into your name ) .
Water and Council rates are payable in advance and they generally come due July/August each year. Hence, you are paying rates for the forthcoming year. Depending upon what time of the year you buy will dictate how much you reimburse the seller of the property for the Rates already paid .
You should always leave a little aside for miscellaneous expenses such as insurance (home and contents), moving expenses (if required), structural & pest inspections plus any other little expenses that may pop up.
Lender Application Fee may be charged to you. If the lender of your choice does charge a fee it would cover such expenses as:
- Lender Establishment Fee
- Valuation Fees
- Documentation Preparation Fee

Due to the competitive nature of the industry, many lenders do not charge an application fee

Registration of mortgage fee so that the Lender may register their mortgage on the title to your property . Again , another Government fee .
Mortgage insurance is another fee that you may pay. Generally, insurance is required on your loan if the loan amount is greater than 80% of the purchase price or value. The insurance policy protects the Lender should the borrower default on the loan and the Lender cannot recoup enough from the sale to payout the loan. The insurer will payout the shortfall from the sale of the property to the lender and then attempt to recoup that shortfall from you the borrower. 1st homebuyers & certain non 1st homebuyers may avoid having to pay mortgage insurance if they qualify for the Home Guarantee Scheme ( HGS ) https://www.housingaustralia.gov.au/support-buy-home/first-home-guarantee

Before you start scouring the net for your dream home, Better Choice highly recommends that you approach your Broker and get a preapproval loan application underway.

A pre-approval application seeks an “approval in principle” from the Lender . That is, subject to you contracting on a property of similar value to what was specified in the preapproval application, the Lender will work towards upgrading the pre-approval to a formal approval in a far quicker fashion . When assessing a pre approval application , the only piece of information missing is the property as you haven’t found it yet . But the Lender can assess everything else about the application , e.g. your income , your term of employment , your borrowing capacity & credit worthiness . Once the Lender has covered off all of this information the Lender will issue a pre approval letter which is valid for 3 – 6 months .

Preapprovals are only available for residential property.

Generally pre-approvals , don’t cost you anything & they don’t obligate you to anything . If when the pre-approval expires , the Lender doesn’t charge you a fee ( conditions apply ) & the Mortgage Broker won’t charge you a fee ( conditions apply ) so it really is a case of “ why wouldn’t you get a pre approval ? “

If your pre-approval expires and you have decided not to purchase a property, neither Better Choice Mortgage Services nor the lender will charge you a fee.
Pre-approvals do not obligate you to purchase a property.
With pre-approved finance, once you find a property, the time frame in settling the property can be shortened considerably.
Having pre approved finance may enhance your bargaining position when negotiating on the purchase of a property. Especially, in the case where there are other purchasers who are also interested in the same property as yourself.
Vendors and Real Estate Agents love dealing with purchasers who have pre-approved finance
There is no cost to you! Neither the lender or Better Choice Mortgage Services charge a fee to arrange pre-approvals.
Pre-approvals last 3-6 months
Your financial situation is assessed and any issues that may arise are sorted out prior to you contracting to buy a property.

One of the major things that people forget to consider is Asset Protection.

Take a minute to imagine how your loved ones would cope if you were to pass away or have an unfortunate accident and not be able to work for an extended period of time!

How would they be able to make the repayments on the mortgage? How would you feel if they had to sell the house and rent? You can avoid these questions by covering your family with life and disability protection.

At Better Choice, we must ensure you are aware of the need to protect yourself and your family from possible financial hardship caused by events out of your control. As an additional service to you, we can offer a free consultation with a qualified Financial Planner who can discuss with you the best way to protect yourself and your family.

Please contact us for more information.

Other services you may require in the process of acquiring your property include:

Pest inspection

Building structural inspection

Settlement agents/Conveyancers

Depreciation Reports

Legal services

For more information about such associated services, please click here.

If you would like to pursue a career as a Better Choice Mortgage Broker, please send through a resume to bdm@betterchoice.net.au, indicating your interest.

Alternatively, you can also ring the office at (08) 92401 2001 ext 7715 to inquire for more information.

Better choice. Better solutions.

Better Choice Mortgage Services are a team of finance specialists who have been assisting West Australians for the past 25 years to identify the most suitable home loans for their situation.