not the banks
from over 35 different lenders, to find
the loan with the right fit for you.
you informed every step of the way
Fit Loans exists to provide a fresh, honest and customer focused approach to lending.
About Us
Fit Loans was created to help borrowers find a suitable loan product and structure that fits their borrowing and financial needs. We pride ourselves on our high quality of client care and keeping you informed every step of the way.
With the market flooded with a variety of loan options, Fit Loans is here to take out the confusion and stress associated with finding a suitable loan for you.
We are dedicated to assisting you to find the loan that fits your needs. Whether you are ready to buy your first home, refinance an existing loan, looking for an investment property or simply wanting to learn more about reducing your debt, Fit Loans is here to help.
Variable, fixed, interest only, LVR, LMI…. we cut through the jargon and explain things in an easy to understand manner. We weigh up all your options and take you through our recommendations step by step.
We don’t play favourites with lenders – we find the most suitable fit for you. Fit Loans advice is free of charge.
It only takes a minute to complete our enquiry form and from there, a Fit Loans consultant will be in contact within 24 hours to provide assistance and answer any queries you may have.
All information will be kept strictly confidential and secure.
Frank Zinghini
Managing Director
Fit Loans was created to help borrowers find a suitable loan product and structure that fits their borrowing and financial needs. We pride ourselves on our high quality of client care and keeping you informed every step of the way.
With the market flooded with a variety of loan options, Fit Loans is here to take out the confusion and stress associated with finding a suitable loan for you.
We are dedicated to assisting you to find the loan that fits your needs. Whether you are ready to buy your first home, refinance an existing loan, looking for an investment property or simply wanting to learn more about reducing your debt, Fit Loans is here to help.
Variable, fixed, interest only, LVR, LMI…. we cut through the jargon and explain things in an easy to understand manner. We weigh up all your options and take you through our recommendations step by step.
We don’t play favourites with lenders – we find the most suitable fit for you. Fit Loans advice is free of charge.
It only takes a minute to complete our enquiry form and from there, a Fit Loans consultant will be in contact within 24 hours to provide assistance and answer any queries you may have.
All information will be kept strictly confidential and secure.
Frank Zinghini
Managing Director
Our Services
Home loans
Refinancing
Business lending
Investment loans
Construction loans
Commercial loans
Motor vehicle finance
Asset finance
Debt consolidation
Self managed super funds
Why Choose Us?
Whether you are a first home buyer or a seasoned investor, Fit Loans will find the right loan to fit your needs. We will provide you with quality customer service that you will value for the life of your loan.
- We have access to over 35 different lenders
- Our services are provided free of charge
- We work for you, not the lender
- We will be easy to do business with
- We will always get back to you promptly
- You will be kept informed every step of the way
- We will go the extra mile, every time
- We will listen to what you want
- We will provide a loan solution that fits your needs
- Our team is qualified and fully compliant
Education Centre
Fit Loans believe that you can never learn too much. That is why we have set up an education centre providing informative articles and check lists that can be read online or downloaded for later viewing.
Contact Us
The last 4-6 weeks have been a flurry of discussions around interest rates rising, election and housing market speculation. All we can say is, be careful who you listen to and don’t get caught up in the media scaremongering. Please contact us If you haven't received our latest email regarding rising interest rates and property prices.![]()
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For those with a larger mortgage, we recommend planning for future rate rises NOW so it can be managed later on. Read our suggestions on How to Plan for Interest Rate Hikes.![]()
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For those wise enough to have fixed their loans last year or earlier, we also recommend starting to plan for the repayment shock you will experience when you come off your fixed loan.![]()
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Let’s look at what is happening with fixed interest rate loans.![]()
With the prospect of continuing rate rises, many clients are turning to us wanting to know if NOW is the right time to fix their home loan or investment property rate.![]()
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Traditionally the fixed interest rate market sits at about 15% of all home loans. However, for nearly half of home loans settled mid last year, according to the ABS the number of fixed interest rate loans peaked in July 2021 at 46%. So, if you didn’t fix last year, unfortunately you have missed the boat on low fixed interest rates.![]()
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However, variable rates are now typically lower than fixed rates. Remember, we have direct access to dozens of lenders who still have competitive and very low variable rates. So, don’t be shy in asking us what we could achieve for you.![]()
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In commentary last month from Tim lawless, Core Logic’s research director, he said the central bank was not yet worried about the ability of most mortgage holders to absorb the repayment pain and cited “with the median household well ahead on their mortgage repayments, the risk of falling behind is reduced.”![]()
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That’s fine to say for the next few increases, however we are all very aware that we have been sitting in a low interest rate Disneyland for over a decade and the joy ride was always going to come to an end. Historically interest rates have sat comfortably in the 5-7% range and our crystal ball has not yet cleared on how high rates may rise in the next few years.![]()
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So buckle up guys, we’re in for a roller coaster ride.![]()
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Let’s finish with this thought…![]()
There are always opportunities in times of change – we just have to act on them…![]()
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We should continue to be wary of treating the Australian property market as if it is just one single market where all areas/suburbs perform the same. It is not!![]()
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The Australian housing market has over 15,0004 individual suburbs, each having its unique market and own set of individual dynamics.![]()
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Whether interest rates go up, down or sideways, there will always be suburbs where prices are also going up, down or sideways independent of what is happening with interest rates. There are many elements contributing to why property prices move in any direction.![]()
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What is important is not so much where interest rates are heading, but what is going on in the suburbs where we own property or plan to invest, and how we can ensure those individual suburb trends work in our favour rather than against us.![]()
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Let’s chat soon.![]()
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With your best interest always in mind…![]()
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Frank Zinghini
yourfinancenews.com.au
If you have read our article on rising interest rates then you would already know that the national median home loan is just under $600k. With a 2% interest rate rise on a mortgage of that size you wi...
If you have been a home owner or property investor in only the past 11 years, you are about to experience a new journey of property ownership. Our longer term mortgage holders are well aware of the interest rate roller coaster we are about to ride. However, for many of our clients, this month is possibly the first interest rate rise they have ever experienced. ![]()
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The last time the cash rate (and in alignment, interest rates) increased was in November 2010. That’s over a decade ago! ![]()
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Most property owners will not see this as good news because of their increased mortgage repayments. However, the upside of rising interest rates indicates our economy is performing well, and the use of monetary policy will ensure this growth is sustainable.![]()
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The reality is we are still living in a dream interest rate environment and have been for a very long time. Ask your parents what interest rate they were paying in the late 1980s when they purchased their first home. You may be stunned to hear it was as high as 17%!![]()
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Rates were always going to go up – it was just a matter of time. And now it’s here. ![]()
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We have been receiving calls from worried clients about the recent cash rate rise this month, and consequently, the increases in interest rates and repayments on their property loans.![]()
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Firstly – what is the difference between the CASH rate and interest rate?![]()
To put it very simply, the cash rate is the market interest rate for overnight loans between financial institutions as determined by the Reserve Bank of Australia. It is generally referred to as the (near) risk free rate for financial institutions. ![]()
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However your loan interest rate is determined by your financial institution's cost of borrowing (including deposits and other sources) plus a margin for risk. Their cost of borrowing is influenced by the cash rate as they require a return over and above the risk-free rate. ![]()
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Therefore, when the risk-free rate changes, it is likely that the interest rate on your loans will also change. As a result, the cash rate and other interest rates have moved in broadly similar ways since at least the early 1990s.![]()
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What does an interest rate rise mean for you and your loan repayments?![]()
If your loan is fixed – nothing! Except that you need to start paying attention to where we expect interest rates to go and start planning for when your fixed interest period ends. It is extremely likely your repayments will increase when moving into a variable rate.![]()
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If you have a variable interest rate, then almost certainly your monthly repayments will increase as of this month.![]()
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Predictions about cash rates rises:![]()
There are many opinions about how fast and how high rates will increase. There is simply too much to take in. One thing that’s fairly likely is that rates will continue to rise this year, and no doubt into 2023 and potentially 2024.![]()
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As we do not have an interest rate crystal ball, we do need to advise that NOW is the time to prepare for those rises.![]()
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Start looking at how you can save your future monthly commitment now by cutting down on those unnecessary items as soon as you can.![]()
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The next few increases should be manageable for most, but not too far into the future you will need to make some serious decisions about your spending habits. Especially those with larger mortgages.![]()
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And you were thinking of fixing???![]()
Well for those who missed our months of warnings and encouragement to fix, you may have missed the boat.![]()
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Fixed interest rates have been creeping up over the last 6-9 months and those who were quick off the mark 12 months ago have locked in at 2% or under.![]()
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With most majors, fixed rates from 1 to 5 years are now approaching 4% to 5% depending upon the period.![]()
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With many variable rates still in the low 2% range, interest rates would need to increase by a reasonable margin before you would benefit from locking in your interest rate now.![]()
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Actions for you…![]()
Now more than ever you need to look at your spending habits and start tightening them – cut costs where you can.![]()
Plan for the inevitable rises ahead of time, perhaps even increase your mortgage repayments now and get ahead on your loan.![]()
Remember, when we arranged your finance, the lender already included in your serviceability at least a 2.5% rate increase (called your interest rate buffer).![]()
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Therefore, it is likely to assume that you can manage total increases of up to 2.5% or they would not have allowed you to borrow.![]()
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If you are concerned, then we encourage you to book a call with us to work on a plan together.![]()
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Stay focused, plan ahead and remember – we are always here to help.![]()
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With your best interest always in mind...![]()
Fit Loans
With the common goal for most Aussies to own their own home, home loan repayments in Australia are mostly designed to pay off both the principal and the interest (P&I loan). However, some lenders do allow homeowners the option of just paying the interest amount only.![]()
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When we talk about loans, there are two components we are required to repay:![]()
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* the principal (loan amount owing)![]()
* the interest (rate set by the lender charged on the principal amount)![]()
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As the term suggests, when you have an Interest Only (IO) loan, you only pay the interest amount on the loan during the interest only period. Your debt (loan) will not reduce during this time.![]()
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Also, when you have an IO loan, as you are not paying down any part of the principal, your repayments will be lower compared to a P&l loan.![]()
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The idea of paying interest only (and subsequently lower monthly repayments) sounds appealing. However, lenders who offer this facility typically do so on a short term basis (typically up to a maximum of the first five years) with the view that at the end of the term you will move to a principal and interest model for the balance of the loan period.![]()
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Why would you use an IO facility and NOT pay off your mortgage debt?![]()
Generally, if you’re a first home buyer or looking to refinance your existing home, you will need to demonstrate good reason for wishing to utilise an IO loan. These reasons generally centre around the need to provide some financial relief and can include:![]()
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Changes in circumstances – Paternity leave, loss of income or change in financial circumstances. When life happens sometimes you need financial relief. By converting your home loan to interest only for a period of time, you will have lower repayments to allow financial relief during unusual circumstances.![]()
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Debt repayment strategy – If you have a large amount of personal debt on very high interest rates, by switching your home loan to pay interest only, it will allow you additional cash to pay off other debt or save more for other items.![]()
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Planned future investment – If your home is going to become an investment property in the future, it may make sense to not pay down the principal. Instead you can put the principal repayments into an offset account to achieve the same outcome as a P&I loan, however, when you move out and become a landlord with tenants, the loan purpose and subsequent interest is considered as a 100% investment, and then becomes tax deductible. The principal in the offset account can be used as a deposit for your new home.![]()
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Investors love interest only loans mainly because they can claim tax deductibility on the interest.![]()
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Why do property investors typically utilise an IO loan?![]()
There are a few determining factors, however the main one is when you currently have an existing home loan.![]()
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As you are aware, the interest on your home loan is not tax deductible, while the interest on your investment property is.![]()
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So it typically makes sense to maximise your financial position by paying off your home loan before you pay off your investment loan.![]()
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If you have an IO loan on your investment property, the money that you would otherwise be paying towards the principal repayments can be utilised to pay down your home loan instead.![]()
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In this scenario, you would be retaining the balance on your investment loan (and deductible interest payments), allowing your home loan to reduce at a faster rate. ![]()
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Download our example to demonstrate how this strategy works financially.![]()
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Interest only must come to an end![]()
Generally, a lender will only allow an initial period of up to five years maximum as interest only. After this the loan will default to principal and interest. At this time, the repayments on the loan will be higher than they would have been if the loan was initially taken out with principal repayments. This is because principal repayments will be calculated over say the remaining 25 years versus the entire initial loan term of 30 years.![]()
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Interest rates![]()
Some lenders may also charge slightly higher interest rates on IO loans than P&I loans.![]()
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In general…![]()
If you are looking to buy your first home or refinance your existing home, you will need to demonstrate good reasons for wishing to utilise an IO loan. IO loans are more generally utilised by investors or under special circumstances for existing owner occupiers when they require some financial relief.![]()
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As with all strategies, there are pros and cons with each and these need to be weighed up against your personal financial objectives. ![]()
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Reduced borrowing power![]()
When assessing an IO loan, a lender will utilise the higher principal and interest repayments required to be made in the sixth year when calculating the amount to be borrowed. As these repayments are higher than those on a P&I loan, the increased servicing requirements mean that you will not be able to borrow the same amount if you were applying for a P&I loan.![]()
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If you are unsure how to start your property investment journey, book an appointment with us and together we will determine if you are ready and in a financial position to start investing in property.![]()
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After all…![]()
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Your Finance Matters
yourfinancenews.com.au
Do you have a home loan and looking to invest in property? Have you considered an Interest Only investment loan? You could then use the money that would otherwise be paying down the principal of the i...
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