FAQs

Welcome to our Home Loans FAQs. We can answer your questions on...

• How do I find a suitable property to purchase?
• How much can I afford to borrow?
• How much deposit do I need?
• What will my repayments be?
• What options are available in terms of repayment frequency?
• What is the difference between a fixed rate loan and a variable rate loan?
• What features are available with home loans?
• What is a Comparison Rate?
• What is Lenders Mortgage insurance (LMI)?
• In addition to a deposit, what other costs are involved in buying a home and obtaining a home loan?
• What is Stamp Duty?
• What is Conveyancing?
• What is the First Home Owners Grant (FHOG) and am I eligible for it?
• What is a property valuation?

 

How do I find a suitable property to purchase?

Finding the property that’s right for you can be a daunting task. There are many different factors to consider and investigate. The size of the property, the type of home you’re looking for, the location and the price range are all important parts of your decision. Start your search reading newspaper classifieds and reviewing real estate sites such as realestate.com.au

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How much can I afford to borrow?

Find out what your borrowing capacity is with HSBC’s How Much Can I Borrow Calculator.

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How much deposit do I need?

If you’re purchasing a property to live in, HSBC will lend up to 90% of the value of the property. You can get started with a deposit of as little as 10% of the purchase price, plus your loan set up costs. If you want to borrow more than 80% of the value of the property, you will need to take out Lenders Mortgage Insurance.

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What will my repayments be?

Get an estimate of what your repayments will be with HSBC’s Home Loan Repayments Calculator.

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What options are available in terms of repayment frequency?

Most of HSBC’s Home Loans have flexible repayment options. You can schedule your repayments to be monthly, fortnightly or weekly.

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What is the difference between a fixed rate loan and a variable rate loan?

Choosing between a variable rate loan and a fixed rate loan will depend on your personal finances. Both loans involve assessing whether interest rates are going to fall or rise in the short to medium term and the level of interest-rate change you are most comfortable with.

• A fixed rate loan is where the interest rate is fixed for a period of time that is between one and five years. At the end of the fixed term, the loan reverts to a variable rate.
• A variable rate loan is where the interest rate varies depending on market conditions.

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What features are available with home loans?

• Redraw
  A redrawing feature allows you to access any additional funds you have paid into your home loan that are above the contractual minimum amount.

• Transactional Access
  Some loans allow access to funds through ATM, Eftpos, Bpay, Cheque, giroPOST, and third part direct debits.

• Additional Repayments
  Most loans are flexible and allow you to make additional repayments above the contractual minimum amount. In some cases there may be a fee associated with paying off more than your contractual repayments.

• Portability
  Move your loan as you move house.

• Split
  Structure your credit and take advantage of features offered by different loans. You can mix and match the features you need to tailor a loan specific to your needs.

• Interest Only Payments
  Most loans will allow you the choice of making interest only payments for a limited period of time.

• All in One
  An all in one account is a mortgage account which allows you to make you’re savings work for you. By offsetting the savings balance on a daily basis against the balance of your loan, you can effectively reduce the amount of interest you’re charged.

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What is a Comparison Rate?

A comparison rate is a method of standardizing the true cost on a loan. This enables you to compare credit providers on an even playing field. A comparison rate takes into account the annual percentage rate applied to your loan as well as the fees and charges that accompany it.

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What is Lenders Mortgage insurance (LMI)?

Lenders Mortgage Insurance (LMI) insures the lender in case you default on the loan and the lender is unable to recover its costs after foreclosing the loan and selling the mortgaged property. The insurance is usually only charged if the amount of being borrowed is more than 80% of the value of the property. When the equity of the property reaches 80% LMI may be discontinued.^*

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In addition to a deposit, what other costs are involved in buying a home and obtaining a home loan?

There are many costs associated with buying a home including stamp duty, conveyancing, title search, mortgage insurance, building insurance, goods and services tax, valuation fees, and strata levies. These costs usually compromise an additional 5%-7% of the properties purchase price.^{^*}

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What is Stamp Duty?

Stamp Duty is a state government impost on both the mortgage documents and the property price. These duties are usually the largest add-on expense in a home loan transaction and will vary state to state. If you’re a first time home buyer, you may be exempt from stamp duty or entitled to a rebate or concession such as the First Home Owner Grant Scheme.^{^}

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What is Conveyancing?

Conveyancing is the legal transfer of property title from one person to another. After stamp duty it is the largest fee you will be required to pay on your property.^{^}

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What is the First Home Owners Grant (FHOG) and am I eligible for it?

The First Home Owner Grant Scheme entitles first home buyers to receive a lump sum payment of $7,000 on contracts for the purchase of a home. If you are eligible, HSBC can make it easy for you to apply by supplying and lodging your application.

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What is a property valuation?

Property valuation is the process of establishing a momentary value for a piece of real estate. It’s used in the credit decision process because the purchased property is often used as security by the lender should the need arise to sell the property to regain the money lent.

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If you have questions about / need to make changes to your current HSBC Home Loan

Call 1300 308 008

If you are applying for a home loan or considering re-financing a current loan call 1300 308 008 or contact your Personal Banking Manager.

Home Loan Selector Tool

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