Tuesday, July 25, 2017

Benefits of an offset account to save you money on your mortgage

I was speaking with a Doctor the other day that was struggling to make the decision on how to prioritise their finances. On one hand, they want to pay off their mortgage quicker, and on the other, they want to save money for holidays and retirement.

When you have a large loan like a mortgage, the main thing that people usually think about is how fast can it be paid off. Most of them go about speeding up their repayments, paying more than the minimum requirement, but there is another option. Using an offset account to reduce the time and money spent paying off the loan.

An offset account is a savings or transaction account that is linked to your home loan with the goal of saving you money on interest. It works by reducing your mortgage’s interest by the same amount of money that is saved in the account. For example, if you have a $350,000 home loan balance and you have $25,000 saved in your offset account, you only have to pay interest on $325,000 of that balance.

There are two types of accounts that are commonly used for mortgages, partial and 100%.

A 100% account is considered the most effective type as 100% of the balance in the account is applied to the loan, reducing the amount of interest you have to pay. Partial accounts are still useful but are less beneficial when paying off loans quickly, as only the interest earnt from the account goes towards reducing the amount of payable interest on the loan.

Using an offset account can help you save thousands of dollars over the life of your loan, but there are a few things that you can do to help you save more. Here are our top 4 ways to use your offset account to save money on your mortgage.

  1. Directly depositing into your offset account to build interest.

Your offset account has a higher interest rate than your regular savings account, this interest is usually compounded on a more regular basis than a normal savings account, and that interest is compounded daily, you can earn more.

Connecting your debit account to your offset account, effectively turning it into your daily transactional account, then having your salary deposited directly into it can help you earn more even if the balance fluctuates.

  1. Using your offset account to pay off credit cards

If you are dedicated to saving money and are focused on building the amount of money in your account, the less likely you are to spend that money. To help build your savings, you can strategically defer expenses daily expenses to a credit card which has a decent interest free repayment period on purchases. When you make your monthly mortgage, repayment, you fully pay off your credit debt at the same time. This gives you more time to build interest and clears your credit debt for the month.

  1. Make your savings work harder by putting them directly into your offset account

Most people have a separate savings account that they use to put money away for holidays, emergencies, etc., however, if you were using a high-interest savings account, the interest earned on that account would be automatically be classed as an earning and taxed. Offset accounts, however, aren’t subject to tax meaning that you could save more and pay less on your loan.

  1. As a safety buffer

If something bad happens that changes your income drastically such as sickness, injury, unemployment, etc., or you need to make a large one-off payment to cover an emergency, the money you have saved in your offset account can be used to cover it.  Using your account like a safety net is a good way to ensure that you are covered if something goes wrong and your situation changes, while still paying off your mortgage at the same time.

In March of 2017, Australian Prudential Regulation Authority (APRA), the governing body responsible for overseeing the finance industry, found that 37% of all loans had some form of offset account attached to them, a 2% rise from the year before.

The use of offset accounts is on the rise in Australia, if you would like to know more about them and how having one could help you pay off your mortgage, contact your local mortgage broker,

The post Benefits of an offset account to save you money on your mortgage appeared first on MediPro Capital Finance.

Tuesday, July 4, 2017

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Tuesday, April 11, 2017

What Are My Options As A Doctor For A Loan

What is a medico package? Wondering what your options are for home loans for doctors? If you are in the medical profession in Australia, options exist that could help you secure the loan you want for significantly less than you would pay otherwise. Whether you hope to buy your first home or refinance your existing home, it’s essential to know each one of your options.

Why do lenders want to lend to you?

As a medical professional, the typical mortgage for doctors will cost you less than the same loan would cost another person. The reason is quite simple. Your career is in demand. More so, those who work as medical professionals earn a substantial living. They tend to be very responsible borrowers and pay back debts on time. Low risk and high income leads to opportunities from bank lenders. All of these factors help to contribute to just how “safe” you are as a borrower. As a result, lenders are willing to offer low interest rates and easier terms to secure the loans you need.

This doesn’t just go for mortgages. Other than home loans, medical professionals may be able to obtain loans for vehicles, equipment for opening your practice, or even for that luxury boat you hope to purchase. It’s important to consider which loans are best for your unique situation.

What Type of Loans for Doctors Is Available to You?

Take a closer look at some of the types of loans available to doctors. Which one of these can open a new door for you and your life?

Capital Equipment Loans

Doctors can often secure financing for medical equipment. Since this is the largest type of non-property expense that most doctors face when setting up their practice, it may require a bit of financial help. There’s a strong belief that, when your practice can invest in high quality equipment, it’s likely to help support the success of your practice. With medical practice loans, you can:

  • Borrow 100 per cent of the cost to your practice
  • Borrow without the need for further financial security
  • Secure a low costing loan, generally with a low interest rate

This may include most types of equipment including diagnostics, medical monitoring devices, lab equipment, medical software, and office, surgery, or clinic fit-outs.

Home Loans

Mortgage for doctors are available in several forms. They differ from traditional home loans in several ways:

  • Generally, you can borrow more. The maximum amount you can borrow will be higher than what is offered to those not in the medical field. Some lenders offer as much as $4.5 million for properties (including first homes and investment properties).
  • Discounts, including lower interest rates, tend to be available. Discounts including an interest rate reduction, lenders mortgage insurance waiver, or others may be available to you, saving potentially thousands of dollars.

Most types of doctors are eligible for this type of loan or medico package discount. This may include interns, registrars, residents, and specialists as well. These discounts may not be available to medical research scientists, psychologists, or naturopaths due to limited income potential in these fields. Additionally, you must be a member of one of the many professional organizations recognized in the field.

Investment Loans

Doctors in Australia can obtain investment loans for a variety of needs. This includes both the investment in non-property as well as in real estate. As noted, home loans for doctors are very affordable. Construction loans for doctors are as well. Build your new practice building or space. Or, build a custom home for yourself. Like home loans, these come with a number of advantages for doctors including low rates, flexible terms, and outstanding access.

Residential property investment loans for doctors in Australia tend to offer key opportunities:

  • Secure the loan you need to build or buy faster than typical loans.
  • Obtain more financing than typical borrowers.
  • Construction loans, which are typically difficult for average buyers to obtain, are available to doctors with high incomes.

Car Loan

Like most other investment options, car loans are available to doctors as well. Buying a car privately is one of the best routes for most investors to take. However, other options exist. Low doc car loans are available for those that operate their own practice. You may also wish to enter into a lease agreement.

These bank loans for doctors offer lower interest rates and easy qualification terms. It’s important for you to work with a lender that understands your profession to ensure you can secure the amount of financing you need to by the vehicle you desire.

Other Asset Loans

Are you looking for a boat loan or bike loan? In nearly all cases, doctors can qualify for these types of investment purchases without complex paperwork or a long process. As a medical professional, you can expect these loans to offer key advantages, again, such as:

  • Easier income requirements for qualification (there’s less work to prove your income)
  • Higher borrowing limits. Purchase that yacht you desire.
  • Low interest rates and easy repayment terms.

No matter the investment you make in an asset-based loan like these, as a medical professional, you’ll save money with a specific loan meant for your individual needs.

Refinancing Current Loans

Doctors are a preferred profession, meaning that it’s possible to secure a new loan to replace nearly any type of existing loan. These refinanced loans are less expensive than what you may have paid previously.

Borrowers are able to select between waived lenders mortgage insurance and discounted interest rates for these new loans. The potential here is to save thousands of dollars over the lifetime of the loan. In some cases, doctors entered into traditional loans with builders and developers, which are considered high risk buyers. However, you can now refinance those high interest rate loans into much more affordable options.

Work closely with your lenders to determine the most affordable method to refinancing. You’ll want to carefully estimate the cost of refinancing your home and what you will save. Most doctors can secure low rate loans that make refinancing financially worthwhile.

Medico Packages Offer Key Benefits to Doctors

What can medico packages do for you? If you are a doctor (and meet the requirements of being one) you can work to improve your financial wellbeing with the right loans. Medico packages offer a number of benefits and allow borrowers to purchase what they need when they need it. As a high income earner, you may automatically qualify for these benefits. Use these loans to purchase a new home, vehicle, boat, or even the equipment to set up and establish your new practice.

When you choose these loans for doctors, you gain considerable opportunities not available through traditional loans. This includes:

  • Personal service available to you from a specialist lender. This ensures you are presented with every option available to you for borrowing to make purchases that fit your needs.
  • Convenience – you do not have to worry about negotiations or complex processes that take up too much of your time. The home loan for doctors process is streamlined and fast.
  • Secure maximum savings with you work with the right lenders.

For those considering the investment in a home or for their practice, medico packages are ideal. Talk to your lender today to learn more about how they can make building your practice and life far easier than you thought possible.

The post What Are My Options As A Doctor For A Loan appeared first on Medipro Capital.

Sunday, February 19, 2017

Comparison Rates

A comparison rate is a tool to help consumers identify the true cost of a loan. It factors in the interest rate, fees and charges and displays a percentage rate that can be used to compare various loans from different lenders.  From 1 July 2003, the Australian Government made it compulsory to display a comparison rate for any display of a credit rate – including home loans. It is seen less frequently now as there are a number of limitations in using this as a reference but it can be a good initial starting point.


The comparison rate is calculated based on the below following variables

  • $150,000 loan amount
  • 25 year term
  • principal and interest loan


Therefore no matter how large your home loan or investment loan is and most of them are larger than $150K, any fees associated with a larger loan which in reality would be less affected by fees compared to a smaller loan distorts the actual validity of a comparison rate. Conversely if you are looking at loaning only a small amount and there are lots of fees associated with that loan, the comparison rate would be more relevant taking into consideration those fees and the actual interest rate would not be as significant as an indicator as in the larger loan scenario.


So when looking at your next mortgage, car lease, business loan, home loan, please look at other factors such as the features a loan may have, is it better to have a variable rate or to have part or all of it fixed, does the loan have an offset account and is the loan small or large enough for fees to impact the interest rate. Keep in mind you may look at refinancing options within 3 to 4 years so very few loans would actually see out a 25 year loan term. Within the term of a loan also banks will change the standard variable rate they apply their discounted rates to so a comparison rate at the start of a loan could be much different as to what it might be into the duration of a loan or mortgage.


For more information on this please call one of the lending specialists at MediPro Capital on 1300 937 007 or visit our website at www.mediprocapital.com.au

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