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What is an offset account? A home loan is a major financial commitment. This is why it’s a good idea to use products that will help you manage this commitment. Put simply, an offset account is a savings account that ‘offsets’ your loan balance and can help you pay it down quicker. Here's an example: Sarah and Tom have a $400,000 Home Sweet Home loan. They also have $40,000 in a Home Sweet Home 100% offset account linked to their home loan. Instead of paying interest on the full $400,000, their offset account balance means they only pay interest on $360,000 ($400,000 – $40,000). If their home loan interest rate is 6.00%p.a Claire and Sam would pay $2,158 interest in a month instead of $2,398 – saving them $240 just because they have an offset account. A bonus feature is that they can access their money at any time if needed. It is important to note that an offset account, while it is a savings account, does not attract any interest. Why get an offset account? A mortgage offset account with a substantial balance will reduce the amount of interest you pay on your home loan, which will reduce the amount you pay over the life of the loan. An offset account can be used just like a savings account where you can make regular deposits. The bigger the balance, the more it’s helping you to pay down your home loan. If you come into an inheritance, earn winnings or some other form of income, holding it in your offset account will ensure you’re maximizing its effectiveness in regards to your payments. You’ll be able to manage your offset account from within Online Banking and our mobile banking app. When you log in, you’ll be able to see the balance and make deposits, transfers and withdrawals. There are no withdrawal limits from an offset account and transfers are instant. What should you look for in a mortgage offset account? Not all offset accounts are the same. Some offset 100% of your loan, while some offset a smaller percentage so make sure you check the details of the account. Be on the lookout for: A 100 percent (full) offset account, rather than a partial offset Easy access to your offset funds No balance limit or penalties for withdrawal Any monthly or annual fees for having an offset account Some financial institutions may offer multiple offset accounts linked to one loan, which can help if you're saving for a few big-ticket items like another property, a holiday, a wedding or a new car. Look out for any fees associated with multiple offset accounts. How much money do you need in an offset account to make it pay? Having a substantial balance in your offset is going to maximise its effectiveness in reducing your interest costs. While you can use it as a savings account and withdraw money from it, any money regularly withdrawn from the account may not be beneficial. If the money is leaving the account as quickly as it goes in, the benefit is going to be minimal. Unless you have money sitting in this account long-term, you may only see little or no benefit. You may also want to consider the interest you would earn in a regular savings account that has an attractive interest rate. If using an offset account, will the reduced interest on your home loan be greater than the interest you would earn, if your savings in the offset account were in a savings account? Is it better to have money in offset or redraw? Offset and redraw facilities offer the same savings concept but are different in how they work. They both can help you pay off your loan earlier by reducing the amount of interest you pay on your home loan. Both are generally available on most standard variable rate loans. An offset account works like a savings account. You can have your pay deposited there, link a debit card to it, and make regular deposits and withdrawals. Alternatively, a redraw is a loan feature. You can only use your redraw if you have made additional repayments to draw from. Making extra repayments into your loan can increase the equity in your home, reduce your loan repayments and will help keep extra savings out of sight, out of mind. Many loans now have a redraw feature that allows you to make additional repayments to your loan. Some lenders may have a redraw minimum or a fee for using the redraw feature. You may be able to use an offset account and the redraw feature on your loan, it doesn’t have to be one or the other. Ultimately, which one you prefer to use comes down to how you manage money. If you need discipline and don’t want to access the funds as you would from any other account, a loan redraw facility may be the best option.   At Horizon Bank, we’re here to help you with your personal banking needs. Get in touch with our friendly team today and let’s chat about your home loan and investment loan options. Speak to a real local person with branches conveniently located in Albion Park, Bega, Berry, Bermagui, Thirroul, Wollongong, Ulladulla, Moruya, Merimbula and Nowra.      The content in this article has been prepared by Horizon Bank for general information only and it is not intended to be professional advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice where appropriate, and consider the relevant General Terms and Conditions before deciding whether to acquire any products or services offered by Horizon Bank and/or its affiliated partners. We do not recommend any third party products or services referred to in this article unless otherwise stated and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. Horizon Credit Union Ltd ABN 66 087 650 173 AFSL and Australian Credit Licence Number 240573 trading as Horizon Bank.

The process of buying a home can be stressful, and an auction process can seem quite daunting… but it doesn’t have to be! Auctions are often a common rite of passage to owning your first home, going into it prepared with forethought and strategy can help maximise your chances of success (without having to pay too much). If this is your first home buying experience, we’ve got 10 tips for you to help you on your journey to acing your first auction, not missing out or paying too much and getting that dream home! 1. Do your homework. When preparing for a real estate auction, research is key! Here are a few things you can do: Take a look online at recently sold listings in the area so you can better understand the prices at which similar properties have sold for.  Walk around the neighbourhood and if you have the opportunity, speak to some of the neighbours about the area.  Attend other open homes for nearby properties. These sorts of activities can help you better understand the home's location and market value and assist in deciding a suitable bidding range for the auction.  2. Obtain a professional building report.  It's important to fully understand the condition of the property and what you’re bidding on, so getting a thorough onsite inspection of the property as well as obtaining a professional building report is a must. If the building report doesn’t come back as favourable, you’ll be able to walk away before the bidding begins. Alternatively, you could use this information to set a lower bidding limit. 3. Set a budget. Establish a clear budget before stepping into the auction. Remember, you need to consider more than just the bidding price. There are additional expenses such as stamp duty, conveyancing costs, furnishings and any renovations that need to be taken into account. It’s very easy to get over-excited at an auction, so it’s key that you set a maximum bid amount that aligns with your financial capabilities … and stick to it. 4. Apply for financing pre-approval and pull your deposit together. Pre-approval for a home loan is a type of preliminary approval from a lender. Before you start bidding at an auction, you need to approach your lender to get pre-approved for a loan so that you can be confident in knowing you have finance to pay for your new home should you become the successful bidder. This will show you how much you can comfortably afford based on your income and expenditure.  You will also need to ensure you have your deposit saved and ready to transfer if you are the winning bidder at the auction. Get fast pre-approval with Horizon’s quick loan application turnarounds! Enquire with your local lender now. 5. Understand the auction process. Auctions are typically carried out by a real-estate agent, who will act as the auctioneer, and are subject to strict rules. Before an auction, the seller of the property will nominate a reserve price, this is not usually made public. During the auction the hopeful buyers will compete to put in the highest bid for the property. Auctions are fast paced so it’s important to make sure you’re keeping track of the competing bids being placed and stick to your budget. If the reserve price is met and bidding continues, the home will be sold at the end of the auction however, if the bidders don’t reach the reserve price the auctioneer might ‘pass in’ the property, which means it is not sold. Another important piece of information you need to consider before diving into an auction is that if you are the successful bidder, there is no cooling off period or time to change your mind about the sale. 6. Familiarise yourself with the auction rules. As mentioned above, some auctions will have specific rules or procedures. Things such as requirements for registration, bidding increments and payment methods. Make sure you get a copy of the auctions terms & conditions to review, that way you can be prepared to follow the rules. 7. Thoroughly examine the sale contract. In order to protect yourself against any potential risks that come with buying the property, obtain a copy of the sale contract and show it to your solicitor or conveyancer for review prior to the auction. They can review the contract and explain any risks that may come with purchasing the property. 8. Attend other auctions as an observer. If you want to try to understand the dynamics and pace of an auction process, it’s a good idea to attend some auctions just to observe. This will help you get a feel for the auction process before you go in as a bidder. 9. Bid strategically. There are a few tailored bidding tactics that you can use to maximise your chances of success at an auction, such as establishing dominance by bidding early, bidding incrementally so you can scope out the competition or waiting until the last minute to jump in with a decisive bid. You may need to adapt your strategy based on the behaviour of the other bidders or the dynamics of an auction on the day. 10. Enjoy the experience. Although it’s important to be prepared, strategic and level-headed at an auction, you should also try to enjoy the experience! Auctions are exhilarating and whether you win or lose, each time you participate in an auction you will gain valuable insights and lessons for the next time. Every bid you make brings you closer to owning your own home or investment property! Celebrate your successes and learn from your mistakes. We know you’ll get there!   Although it can seem daunting participating in your first auction, it can also be an exhilarating and rewarding experience as long as you go in with the right mindset and preparation. It’s important to remember that success at an auction isn’t just about winning, it’s about securing the right home at the right price and time for you. By following the tips above and doing all the right preparation, setting your budget, staying calm under pressure, and observing auction protocol, you’ll be on the path to acing your first auction! These strategies will enhance your chances of success. As you step into the world of auctions, remember that financial readiness is critical. Horizon Bank ensures you have all the financial support and advice you need to make confident bids. Whether you're looking into securing a loan for that must-have item or seeking advice on managing your finances post-auction, our team at Horizon Bank is ready to assist you. Don't let financial uncertainties hold you back from acing your first auction. Visit us online or drop by your nearest branch to discover how we can help you make your auction experience seamless and financially sound. Let Horizon Bank be your partner in navigating the exciting world of auctions. Start your journey with us today! Horizon Bank has a branch network spanning the NSW South Coast and Illawarra. Horizon Bank branch locations: Albion Park, Bega, Bermagui, Berry, Merimbula, Moruya, Nowra, Thirroul, Ulladulla & Wollongong.

Fixed vs Variable: Pros and cons of fixing your interest rate Are you in the market for a loan but aren’t sure whether to take out a fixed of variable rate? Choosing between fixed and variable interest rates can be complex, especially for first-time borrowers. This blog aims to simplify this decision-making process by providing in-depth insights into both options, which will help you understand how these interest rates work and which best fits your financial situation. Understanding Interest Rates Interest rates play a crucial role in determining the overall cost of your loan. Banks will normally offer a fixed rate of a period of 1, 2 , 3 or 5 years. So the interest rate remains unchanged throughout whichever period you choose. This offers you stability and predictability in your repayments. Your repayment stays the same regardless of market changes. At the end of the fixed period, the rate normally reverts to a variable rate or you can choose to re-fix.Conversely, variable interest rates can fluctuate in response to market conditions. This could mean that your repayments decrease when market rates fall, but they also could increase if market rates rise. The Pros and Cons of Fixed Interest Rates Choosing a fixed-interest rate loan means that you’ll know exactly what your repayments will be for the fixed period you choose; this is normally less than or equal to 5 years. This can make it easier for you to budget and plan for your future. However, a major drawback of a fixed rate is their lack of flexibility. This means if the market rates fall, you will still be required to pay the higher rate. Additionally, fixed-interest rate loans may have restrictions on whether you are able to make extra repayments or pay off the loan early. It is likely to have a fee to break the fixed rate contract. The Pros and Cons of Variable Interest Rates A variable interest rate offers more flexibility than their fixed counterparts. If market rates decrease, so will your repayments, potentially saving you money. Many variable-rate loans will also allow extra repayments, allowing you to pay off your loan faster. On the downside, variable-rate loans are unpredictable. If the market rates rise, so will your repayments, potentially stretching your budget. Fixed Interest Rates with Horizon Bank At Horizon Bank, we offer competitive fixed-rate loans. By choosing a fixed-rate loan with us, you can effectively manage your finances by knowing exactly what your weekly, fortnightly or monthly repayments will be. Our team of experts are always available to guide you through the process and present the loan options that best suits your needs. Horizon allows up to $30,000 in extra repayments each loan anniversary year, which helps reduce the term of the loan. For extra repayments made on a fixed-interest rate loan, Horizon allows you to redraw on those funds if you require to do so down the track free of charge. Variable Interest Rates with Horizon Bank At Horizon Bank, our variable-rate loans are designed to provide you with flexibility and potential savings, which is ideal for both experienced buyers and first-home buyers. Benefit from a variable interest rate and take advantage of flexible weekly, fortnightly or monthly repayment options – whichever suits you best – as well as the allowance of extra repayments without penalty. Making Your Decision The choice between fixed and variable rates depends heavily on the current Australian economic climate. For example, a variable rate might save you money in a falling market, but in a rising market a fixed rate could offer you more stability. Your personal finance goals should be the primary driver behind your decision of whether you value stability or flexibility. We understand that choosing between a fixed and variable interest rate is a significant decision that can greatly impact your financial future. By considering the pros and cons of each option you can make an informed decision that aligns with your financial goals and circumstances. Contact us to explore your loan options, you can have a chat with one of our experts today. We’ve got the Illawarra and South Coast covered with branches located in Thirroul, Wollongong, Albion Park, Berry, Nowra, Ulladulla, Moruya, Bega, Bermagui and Merimbula. Regardless of where you live, reach out to us by filling in an online loan enquiry form and we’ll assist you over the phone and email.

Benefits of Loan Pre-Approval   Making big purchases, like a new car or home is exciting! It also requires thinking about your situation and choices carefully. You may also need to act quickly when necessary, which can be tricky. A fast loan pre-approval is a helpful tool that can make this process easier. It increases your chances of buying what you want before someone else does and takes some of the stress out of these monumental decisions!   What's Conditional Pre-Approval? Conditional pre-approval is like a signal from a lender. It tells you that you can ask for a loan up to a certain amount. But you don't have to take the loan, and the lender doesn't have to give you that much money. However, it tells a seller that you're serious about buying and that you're sure you can pay for what you want. To figure out how much you can borrow, the lender looks at your financial situation and the price range of whatever it is you want to buy.   Why Consider Pre-Approved Loans? Conditional pre-approval not only shows sellers that you're serious about buying, but it also helps you with your finances and budgeting once you find what you want. If you're just starting to think about buying a home for example, getting a swift pre-approval helps you look for homes that you can more likely afford. It gives you an idea of how much money the lender might lend you. If something changes while you're looking – like your money situation – you can update your pre-approval.   How to access Fast Loan Pre-Approval from Horizon Bank? You can apply for a loan online, pop into your local Horizon branch, or give us a call and talk to a lender. Here's what you should know: The price range of what you want to buy If you've saved money for part of the purchase How much you earn How much you spend on living expenses   How Long Does Loan Pre-Approval Last? When pre-approved for a loan, the pre-approval generally will last for two months. Need longer? No stress! We just need to revisit your documents to give you more time. Speak to your lender to learn more about the duration of your individual pre-approval.   Time to Buy, What Happens Next? Once you find what you want to buy you just provide the details to the lender and seek formal approval. This significantly reduces turnaround time in order for you to make your purchase quickly.   With 10 branches located in Thirroul, Wollongong, Albion Park, Berry, Nowra, Ulladulla, Moruya, Bega, Bermagui and Merimbula, we have got the NSW South Coast covered. Not a local? Not a worry! Reach out to us by filling in an online application form and we’ll assist you over the phone and email.

What is home equity? Home equity is the portion of your home's value that you own outright, free and clear of any loans. It grows as you pay off your home loan and home values appreciate. So, if you have been in your home a few years, chances are good that the home equity has grown too. That growth could mean an opportunity to refinance your loan. Let’s explore this further. Loan refinancing Loan refinancing typically involves taking out a new loan with better terms than your existing loan and using it to pay off the balance of the old loan. The new loan may have a lower interest rate, which could save you money every month on your mortgage payment. Or, it may have a shorter term, which could save you money over the life of the loan by pay it off more quickly. How to calculate equity When it comes to personal finance, one of the most important concepts to understand is equity. Equity is the portion of a property's value that is owned by the homeowner, and it can have a significant impact on a family's financial stability. Calculating equity is relatively simple: it is simply the difference between the property's current market value and the outstanding balance on the mortgage. For example, if a home is worth $200,000 and the mortgage balance is $150,000, the equity would be $50,000. Families with high levels of equity are typically better positioned to weather financial challenges, such as job loss or medical bills. Furthermore, equity can be used as collateral for loans, making it an important asset for many homeowners. What is LVR? Loan to Value Ratio (LVR) is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased. The asset is usually a property, and the loan is usually a mortgage. Lenders use LVR to assess the risk involved in lending money, as it represents the amount of equity that the borrower has in the property. A high LVR means that the borrower has less equity and therefore more risk, while a low LVR indicates that the borrower has more equity and less risk. In order to calculate Loan to Value Ratio, simply divide the loan amount by the value of the property. For example, if you are looking at purchasing a property worth $500,000 and you have a deposit of $100,000, your Loan to Value Ratio would be 80%. This means that you would have 20% equity in the property. Factors that influence equity There are a number of factors that can influence the equity in your home. The most important factor is the value of your property. If your home is worth more than you owe on it, then you have equity. However, if you owe more than your home is worth, then you have negative equity. Another important factor is the amount of money you have paid into your mortgage. The more money you have paid, the more equity you will have. Additionally, the length of time you have been paying into your mortgage can also influence equity. If you have only been making payments for a short period of time, then you will have less equity than someone who has been making payments for a longer period of time. Finally, the interest rate on your mortgage will also impact equity. A higher interest rate will mean that more of your payments will go towards interest, rather than principal, and as a result, you will build equity more slowly. Ways to increase equity in your home If you're looking to increase the equity in your home, there are a few things you can do. One is to make sure that your home is well-maintained and updated. This means keeping up with necessary repairs, painting the interior and exterior of your home on a regular basis, and making any other cosmetic upgrades that may be needed. Another way to increase equity is to pay down your mortgage as much as possible. This will reduce the amount of interest you're paying and increase the portion of your home that you own outright. Finally, you can try to increase the market value of your home by making strategic improvements that will appeal to buyers. These could include adding another bedroom or bathroom, or updating the kitchen or flooring. By taking these steps, you can help to increase the equity in your home. If you are thinking about refinancing your home loan, be sure to consider the costs of refinancing, such as application fees and closing costs, before making a decision. Horizon Bank is here to help you with your banking needs. Visit us at a local branch or online to learn more about our refinancing options. Horizon Bank has a branch network spanning the NSW South Coast and Illawarra. Horizon Bank branch locations: Albion Park, Bega, Bermagui, Berry, Merimbula, Moruya, Nowra, Thirroul, Ulladulla & Wollongong.

Did you know that electric and hybrid cars produce significantly fewer emissions than traditional petrol or diesel vehicles? If you're looking to reduce your carbon footprint, switching to an electric or hybrid car is a great way to do it. In this blog post, we'll take a look at the benefits of electric and hybrid cars. What is a carbon footprint and how can electric and hybrid cars help reduce it?The carbon footprint is the total amount of carbon dioxide and other greenhouse gases that are emitted by an individual, organisation, event, or product. Greenhouse gases are released when fossil fuels such as coal and oil are burned. They contribute to the Earth's greenhouse effect, trapping heat in the atmosphere and causing the Earth's temperature to rise. Electric and hybrid cars can help to reduce an individual's carbon footprint because they produce zero emissions. In addition, electric and hybrid cars are often more fuel-efficient than traditional fuel-powered cars, meaning that they require less fuel to travel the same distance. As a result, electric and hybrid cars offer a cleaner and more efficient way to travel, helping to reduce our impact on the environment. How do electric and hybrid cars work?Electric cars are powered by batteries that store electricity, which is then used to run the car's motors whereas hybrid cars have both an electric motor and a fuel engine. The electric motor is used for low-speed driving, while the fuel engine is used for higher speeds. Both hybrid and electric cars use regenerative braking to help charge the batteries. When the brakes are applied, the car's kinetic energy is converted into electrical energy, which is then stored in the batteries. What are the benefits of owning an electric or hybrid car?Hybrid cars and electric cars are becoming increasingly popular as people look for more efficient and environmentally friendly ways to travel. There are a number of benefits to owning an electric or hybrid car! They produce no emissions They’re more fuel-efficient than traditional petrol or diesel cars They’re often cheaper to maintain Electric cars also have the potential to save you money on fuel costs, as you’ll only need to charge your battery rather than buying/refilling petrol or diesel. Hybrid cars offer a compromise between electric and traditional petrol or diesel cars, as they still run on petrol or diesel but also have an electric battery that helps to power the car and reduce emissions. Ultimately, the decision of whether to buy an electric or hybrid car depends on your personal circumstances and preferences, but there’s no doubt that they offer a number of benefits over traditional petrol or diesel cars. Consider your daily driving habitsIf you have a long commute or frequently drive on the highway, a hybrid car may be a better option since it can run on petrol if needed. Electric cars are best suited for metropolitan driving, where there are plenty of charging stations available. Think about your budgetHybrid and electric cars tend to be more expensive than traditional petrol or diesel-powered vehicles, but with fuel prices fluctuating rapidly they may save you money in the long run. Do your researchTest drive a few different models before making your final decision. Reach out to experts, friends, family or peers who have experience with electric and hybrid vehicles. With so many options available, it's important to find the right car for you. Horizon Bank has a Green Car Loan that offers competitive rates and terms to help you finance the purchase of a new or used hybrid or electric vehicle. The Green Car Loan from Horizon Bank is a great option for those who are looking to finance a green car. The loan offers competitive rates and terms, making it easy to get a car loan for a new or used hybrid or electric vehicle. Get in touch with your local branch today and let us help you get behind the wheel of your new car! Horizon Bank has a branch network spanning the NSW South Coast and Illawarra. Horizon Bank branch locations: Albion Park, Bega, Bermagui, Berry, Merimbula, Moruya, Nowra, Thirroul, Ulladulla & Wollongong.

Tips for preparing for a change in interest rates Why do interest rates change? To understand why interest rates change, we'll first talk about the cash rate. The cash rate is a rate set by the Reserve Bank of Australia (RBA) representing the interest that banks and lenders have to pay on the money that they borrow. This rate will rise to try and slow the economy down, or fall to promote economic growth. The RBA's objective is to promote a stable currency, full employment and economic prosperity, ensuring that price growth, or inflation, remains relatively low and stable. Interest rates on the other hand, are what determines the cost of borrowing or lending money. If the RBA raises the cash rate, then it will cost more for banks to conduct business between themselves. Banks and lenders may pass these costs on to consumers in the form of rate rises, meaning anyone who has borrowed money from that institution will be charged more interest. What does an interest rate rise mean? The cash rate has a flow on effect to financial products with variable interest rates, such as savings accounts, variable rate mortgages and personal loans. Learn more about the different types of loans. It also impacts cost of funding for the banks. An interest rate rise means the cost of funding a loan has increased. This can lead to higher repayments, which can leave borrowers with less disposable income, meaning many people may need to look to make savings elsewhere. Interest rate rises can be tough for families and small businesses, as increased mortgage and debt repayments can make life more expensive. On the flip side, depositors enjoy an interest rate rise as they will see a greater return on their savings and term deposits. What is the impact of interest rates rise on mortgages? A rise in interest rates will see your minimum monthly repayment increase. If you’re not sure what this is, you can find out by checking the loan details in your online banking or by asking your lender. If you're on a standard variable rate loan, you'll probably see your rate go up in line with any interest rates rise. It is important to check your loan contract and any other relevant terms and conditions when you first receive your loan offer. Fixed-rate mortgage holders are likely to be affected when they reach the end of the current deal. A rise in interest rates could make a re-mortgage more expensive. It’s important to remember whilst a small rise may not affect your repayments too much, a few consecutive rises could have a significant impact on repayment costs. How do I prepare for an interest rate hike? It’s important to have a financial plan to deal with any potential changes in interest rates. If you’re following the market and have noticed interest rates rising, you can always speak to us about your home loan to see if making extra repayments or switching from variable to a fixed rate would be in your best interest. If you don’t have a home loan with us, get in touch to see if refinancing to Horizon makes good financial sense. Making a plan to cover the next three to six months is a good idea to make your money go even further. Setting a budget and reducing unnecessary spending is a great place to start. Putting extra money towards other debts like credit cards and personal loans will also put you ahead if interest rates rise. Tips for managing an interest rate rise on your mortgage Calculate the impact the interest rate rise will have on your mortgage. Use our loan repayment calculator to get an idea of how calculator to work out the impact. Calculate what you can afford If your mortgage repayments are likely to go up, work out if you're able to afford them. As discussed earlier, you may need to cut unnecessary spending to make up this extra cost. If you think increases are expected to happen in the future, then start saving up enough money now to cover your mortgage payments when they occur. Are you on the best deal? If you have a fixed rate home loan with us, we will be in touch before your fixed term ends to discuss your options. At this point you can lock in a new rate or switch to a competitive variable rate. It’s important to speak to your financial institution first to see if the savings are worth it before switching. Make more mortgage repayments if you can Taking advantage of the lower interest rate environment while you can and paying extra if possible will put you in a better position during a rate hike. It’s important you always check with your mortgage provider before you pay any extra repayments as fees may apply, especially on a fixed rate loan. What happens when interest rates fall? Low interest rate environments tend to benefit borrowers rather than savers. The goal is to stimulate economic growth by making it cheaper to borrow money for large purchases like property. People are willing to make larger purchases and will borrow more, which increases the demand for household goods. A low interest rate environment is great news for homeowners because it will reduce their monthly mortgage payment. This also sees potential homeowners be drawn into the market because of the cheaper costs. The flow on effect is that low interest rates mean more spending money in consumers' pockets. Lower interest rates gives borrowers a break in terms of lower debt repayments and it can also provide an opportunity to get ahead on your mortgage. Unfortunately, people with large deposits in the bank don’t see much of a return on their investment when interest rates fall. To view our current interest rates on our loans and savings products, visit our interest rate page. Horizon Bank is here to help you with your banking needs. If you have any questions or would like us to discuss your needs further please get in touch with our friendly local team today. Horizon Bank has a branch network spanning the NSW South Coast and Illawarra. Horizon Bank branch locations: Albion Park, Bega, Bermagui, Berry, Merimbula, Moruya, Nowra, Thirroul, Ulladulla & Wollongong. The content in this article has been prepared by Horizon Bank for general information only and it is not intended to be professional advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice where appropriate, and consider the relevant General Terms and Conditions before deciding whether to acquire any products or services offered by Horizon Bank and/or its affiliated partners. We do not recommend any third party products or services referred to in this article unless otherwise stated and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. Horizon Credit Union Ltd ABN 66 087 650 173 AFSL and Australian Credit Licence Number 240573 trading as Horizon Bank.

Over 50 & Buying Your First Home For many people, buying a home is a major financial commitment. Have you considered buying a house later in life?Are you looking for a way to get out of renting? Are you trying to get into the market before interest rates increase? Whatever your reason, a mortgage could give you the stability you are looking for and get out of the renting cycle. Speak to our friendly team at Horizon bank today. Buying a house at any stage of life is an exciting time. In this blog, we’ll look at the advantages and disadvantages of being a first-home buyer in your 50s, plus some other key tips for property buying in general. Advantages of buying a home in your 50s By this stage of life, you will hopefully have money saved up from years of employment. Savings are essential to put towards a deposit for a home loan and a stronger deposit could potentially enable a higher purchase, opening up your options on the property market. Years of experience will give you more confidence in price and contract negotiations, and a clearer view of the type of property you want. Knowing what you want will also help you plan for the future and give a better idea of future needs concerning mobility and accessibility. Not only will you have secured an asset that can grow in value over the longer term, but you will enjoy the emotional and physical security that comes with owning your own home, as the vulnerability of being a tenant is gone. Disadvantages of buying a home in your 50s If you're looking to buy your first property now, there are some disadvantages to consider before making a decision. This may include reviewing how you live your life and making significant changes that may require some time to get used to, but which could be beneficial for your future. This may leave you feeling out of your comfort zone, however, it is important to remember that everyone leads a different path, and purchasing property is a positive venture. There may be pressure to pay your home loan down quickly if your projected working years is less than the standard 25 or 30-year loan term. It is best to speak with a lender about your options in this regard. If your budget or savings don’t allow for you to purchase in the area you have become accustomed to living in, you may need to evaluate if buying property right now is the right move for you, or if you are better off waiting to purchase where you want to live. If you still have adult children living at home, or elderly parents you care for at home, you may need to work around their needs as well which can be another challenge. First Homeowner’s Over 50 – Essential information Consider how much you can afford The first step is to determine how much you can borrow. Using our borrowing power calculator is a great first step. You should only purchase a home if you can afford the repayments, legal fees, bank fees and any applicable government fees like stamp duty. If you can demonstrate a good savings history, this will help when applying for a home loan. If you’re currently renting, take a look at your budget and see if repayments will be more or less than the rent you currently pay. Consider whether you will be better off making repayments on a home loan and consider where you can redirect any savings. Check your credit score Before you apply for a mortgage, check your credit score. If you find that it needs work, take the necessary steps to improve it. Checking your credit history and credit scores can help you better understand your current credit position. Checking your credit reports regularly can help you become more aware of what lenders might see. Checking your credit report can also help you detect any inaccurate or missing information. Think about how much maintenance you can handle If you’ve been renting, you’ll know it is the landlord's responsibility to fix any maintenance issues around the home. You may have only been responsible for maintaining a yard or small garden. When looking to buy property, think about what type of maintenance you can handle yourself as these expenses become your responsibility as a homeowner. Buying with a family member Plan for different stages and financial challenges in life and consider affordable housing opportunities like buying with a family member. 3 It may suit you and your lifestyle to choose to buy with your children or other relatives in a dual occupancy arrangement. You should do your own research on the pros and cons of buying a property with a family member to understand your rights and obligations. Getting a home loan at any age is a big decision and shouldn’t be taken lightly. This is why there are many things to consider when choosing to buy your first home. At Horizon Bank, we are here to help you with your banking needs. If you have any questions or would like us to discuss your needs further please get in touch with our friendly local team today. Horizon Bank has a branch network spanning the NSW South Coast and Illawarra. Horizon Bank branch locations: Albion Park, Bega, Bermagui, Berry, Merimbula, Moruya, Nowra, Thirroul, Ulladulla & Wollongong. Frequently Asked Questions What are the benefits of buying property when you’re over 50? Buying a home could give you the stability you are looking for and provides an opportunity to get out of the renting cycle. You also are securing an asset that will increase in value. What can I use to prove affordability? This includes proof of savings or investments, as well as evidence that you have enough income and assets to sustain yourself during the life of your loan and into retirement. What are the key factors in getting a home loan? Demonstrate a good saving history such as a share investment portfolio or other investments. Show a sound borrowing history and demonstrate proof of income. A bigger deposit will open up your options for finance. Consider different markets for affordability and be sure the mortgage suits your situation.  The content in this article has been prepared by Horizon Bank for general information only and it is not intended to be professional advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice where appropriate, and consider the relevant General Terms and Conditions before deciding whether to acquire any products or services offered by Horizon Bank and/or its affiliated partners. We do not recommend any third party products or services referred to in this article unless otherwise stated and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. Horizon Credit Union Ltd ABN 66 087 650 173 AFSL and Australian Credit Licence Number 240573 trading as Horizon Bank.

At some point you’ll probably need a loan for something whether it be a holiday, car, credit card or home purchase. One of the ways a lender will assess your application is by looking at your credit history. This is why understanding what your credit report and credit score says about you is important. What is a credit score? Many people use the terms “credit score” and “credit report” interchangeably however they are two different things. Your credit report contains a summary of your financial history, while your credit score is included in the report and reflects how reputable your financial history is. Credit bureaus such as Equifax hold credit report information. A credit report is created when a bank or other credit provider submits a request for information. Why do I need a credit report? Having a credit report and score will assist you in applying for a loan or credit card as lenders can use this as one indicator of your ability to repay. Credit reports can also be used by landlords when deciding who to rent their property to, and by employers as part of their hiring process. How do I build a credit report? Credit reports can be created when you have a utility account in your name and the provider runs a credit check. These include phone, gas, electricity and internet accounts. These are considered credit accounts, so if you default on payments for these, it will be listed on your credit report. How do I access my credit report? Visit the ASIC money smart website for a list of sites where you can access your credit report once per year for free. Be wary of websites asking you to pay for your credit report as this could be a scam. Requesting your credit report more than once per year may attract a fee from credit reporting bureaus. What is included in your credit report? Personal information and contact details are included. How long you’ve been at your current and previous address is also on there. Other things that make up your credit report include: Type of credit provider. Different lenders have different levels of risk. For example a non-traditional lender such as store finance may have a different level of risk than a bank or credit union. Size of credit requested. Both the type and size of the loan or credit limit you’re requesting can affect your credit score. Mortgages have a different level of risk compared to credit cards. Number of credit enquiries. Every time you apply for credit, the credit provider obtains a copy of your credit file and the application is noted. The pattern of credit enquiries over time also affects the level of risk. This is considered a red flag for credit providers. Directorship information. If you’re a director or proprietor, it may impact your score. Check both the individual and commercial sections of your credit file to see what is noted. Age of credit file. Check the date your credit file was created. A new file may indicate a different level of risk compared to an older file. What stays on your credit report? Default information. Any personal or business credit such as overdue debts or serious credit infringements could negatively affect your score. Court writs. Default judgments or court writs may convey you as an increased risk and negatively impact your score. Bankruptcy: if you declare bankruptcy, this will stay on your report for 5 years starting from the day you declare bankruptcy or 2 years starting on the day you were no longer bankrupt. Debt agreement: Entering into a debt agreement is where you negotiate to pay a percentage of your combined debt that you can afford over a period of time. Payments are made to your debt agreement administrator. These agreements remain on your credit report for 5 years from when the agreement was made or 2 years from the day the agreement is completed or declared void. What is a good credit score Earlier on we mentioned credit bureaus hold your credit report information. They also determine your credit score differently. Generally, the higher your credit score, the better it is. Below is a breakdown of how Equifax evaluate your credit score as an example. Looking at the table, a score between 833 and 1200 gives an excellent score which means it is less likely that a negative event (related to repaying a debt) will be recorded on your file in the next 12 months. This means you are in the top 20% of the credit-active population and will appear as less of a risk to lenders. A below average (0-509) score means you’re in the bottom 20% of the credit-active population and are unlikely to be approved by reputable lenders. Source: Finder.com.au Improve your credit score Fixing issues on your credit report When you receive your credit report, you can contact the credit bureau you received it from if there is any incorrect information. Only incorrect information can be removed. If all of the information is correct but your credit score is still low, there are steps you can take to improve your score. How do I fix my credit score? Consolidate your debts into one easily managed personal loan if possible. Consider entering into a debt agreement to pay off multiple debts. You can read more about debt agreements on the Australian Financial Security Authority’s website. Lower the limit on credit cards if you are not reaching that limit with your spending. Avoid a default notice by making payments within 60 days of when they are due. Default notices of $150 or more remain on your credit report for 5 years. Limit the number of credit enquiries you make. Multiple enquiries for credit made within a short period are recorded on your credit report and are considered a red flag to lenders. Seek help from a financial counsellor to help you work out a plan for paying down your debts, through disciplined spending and saving. Use of financial counselling services is not recorded on your credit report. Thinking of applying for a loan or credit card, but want to know more about your credit report first? Get in touch with us today, we’re here to help. Horizon Bank has a branch network spanning the NSW South Coast and Illawarra. Horizon Bank branch locations: Albion Park, Bega, Bermagui, Berry, Merimbula, Moruya, Nowra, Thirroul, Ulladulla & Wollongong. The content in this article has been prepared by Horizon Bank for general information only and it is not intended to be professional advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice where appropriate, and consider the relevant General Terms and Conditions before deciding whether to acquire any products or services offered by Horizon Bank and/or its affiliated partners. We do not recommend any third party products or services referred to in this article unless otherwise stated and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. Horizon Credit Union Ltd ABN 66 087 650 173 AFSL and Australian Credit Licence Number 240573 trading as Horizon Bank.

What is a Loan? A loan is an agreement between two parties, where money is given in exchange for repayment of the loan principal amount plus interest. Loan terms are agreed to by each party before any money is advanced. A loan may be secured by collateral such as a mortgage or it may be unsecured such as a credit card or personal loan. There may be additional costs for taking out a loan including establishment fees, annual or monthly fees and solicitor or conveyancer fees if requires. A loan can be set at a fixed amount, or it could be available as an ongoing line of credit up to a maximum amount. There are various types of loans available including secured, unsecured and commercial a loans. Horizon Bank has been serving customers since 1964. You can learn more about our history on our website. Our goal is simple: To provide our members with the highest level of service while offering competitive loan rates and terms. We know the importance of accessing quality financial services. That's why Horizon Bank offers several ways to access money when you need it. Whether you're planning for an upcoming holiday, paying off debt, or buying a car, Horizon Bank has what you're looking for. At Horizon Bank, we offer a range of home loans, mortgages and home loan refinancing options at competitive rates. We can assist in helping you achieve your financial goals in a way that suits your needs. Compare our home loans Our experienced team of professionals will guide you every step of the way. We understand that life happens, and when it does, we'll also work to find solutions for unexpected situations such as changes to employment or family dynamics. Horizon Bank understands that sometimes things come up that require immediate attention. That's why we have 24 hour, 7 days a week online banking access. You can check balances, transfer funds, pay bills and manage your loan. If you prefer to speak to a real person, we've got friendly staff who are ready to handle your queries. Contact us today! Key Points: A loan is an agreement between two parties where one gives up something (the principal) in return for receiving something else (interest). Loans can be for a fixed amount or a continuing line of credit. A line of credit gives consumers access to cash at competitive rates without paying back the entire balance upfront. Why do you need to understand loans? Loans are a form of debt incurred by individuals or entities. A bank lends money (or credit) to use at their discretion. If you agree to these terms, you're agreeing to pay back the loan plus finance charges and interest. This is why it’s so important to understand loans. Let's take a look at how the loan process works. When one applies for a loan, a lender might ask borrowers questions including the purpose of the loan, whether they've had any previous loans, if there are any liens against them and what their existing expenses are. A lender may require collateral to secure a loan. Examples of collateral include savings, an existing mortgage or a motor vehicle. Before approving a loan application, an experienced lender will evaluate a borrower's credit history and income level. Depending on the applicant's creditworthiness, the bank either refuses or grants the loan request. When a bank denies the loan application, they will generally provide a reason. Once an application has been submitted for approval, both parties agree upon its terms. After receiving the funds from the bank, the borrower has to pay back the entire amount plus any additional fees and interest charged by the bank, in either weekly, fortnightly or monthly instalments. What types of loans does Horizon Bank offer? Loan Types Home Loan A home loan, also known as a mortgage is an amount of money borrowed from a lender (usually a financial institution) so that one may buy property, such as a house, apartment or townhouse. At Horizon Bank, a mortgage is usually for a fixed length of time (25–30 years). A minimum monthly repayment is calculated on the principle amount and the interest rate. A loan agreement between the lender (Horizon Bank) and borrower will specify when repayments must occur, which may be weekly, fortnightly or monthly. Find out how to choose a home loan Investment Loan An investment loan is simply another name for any type of loan used to fund the purchase of an investment property. Horizon Bank offers both principal and interest and interest only investment loan. With principal and interest Investment Loans your monthly payments go toward both your interest costs and your loan balance. You will, over time, pay off the debt. An interest-only loan, is a loan where you pay only the interest on the loan and not principal. This will mean lower monthly payments for a fixed period but you’re not paying down the debt. Eventually, you're required to pay off the full loan either as a lump sum or with higher monthly payments that include principal and interest. Five things to consider before purchasing an investment property Car Loan Horizon’s Car Loans are loans taken out so that people can buy cars, motorbikes, caravans & boats. Car loans allow you to borrow a specific sum of money to buy a new or used motor vehicle or other motorised recreation vehicles listed above. You repay the bank by paying back some of the principal amount plus interest. To repay the car loan, you must complete the repayments over the term of up to 5 years, agreeing to repay the loan usually in monthly payments. At Horizon, you can repay the loan earlier than the fixed period without penalty. You’ll pay back not just the principal but also any interest charges too. Our Car Loan Calculator works out roughly how much the repayments are over the term of the loan, but it’s ideal to have a chat with one of our professional lenders. Here’s how to apply for a car loan with us Personal Loan Personal loans are a way to borrow money for personal use. A personal loan gives you access to an immediate lump sum of cash when you need it most. Personal Loans are unsecured. That is, no collateral is required because loan amounts are generally relatively small (relative to a home loan for example).Personal loans are usually, but not limited to, used for consolidating debt, paying for a holiday, or buying whitegoods and furniture etc. Borrowers then repay their loans by paying off the principal balance plus any accrued interest at regular intervals throughout the life of the loan. There may be additional charges, such as an administrative charge, monthly fee or late payment penalties if you don't repay your loan by its due date. What you can buy with a personal loan Credit Facilities Visa Credit Card information A credit card is a way to borrow money or access ‘credit’ from a financial institution. The credit card has a set amount of funds called a 'limit’. This limit is set when you apply for a card. Credit cards are widely accepted and can be used to make purchases over the counter, online or over the phone. Like all debts, you need to repay the credit card. A Credit card has an interest rate, which apply to amounts that you haven’t paid back. There’s a minimum monthly repayment and cards may attract an annual fee. It’s important to consider whether you can afford the repayments on a credit card before you apply. Tips on applying for a credit card Line of Credit At Horizon Bank, our line of credit product is called a Budget Overdraft. This line of credit has a set limit, but is a continuing credit product, which means there is no set end date you need to repay it by. You only pay interest on what you use. For example, if your line of credit is set at $5,000, and you have only used $2,000 in the month, you will only pay interest on $2,000. Loan Calculators Loan Repayment Calculator  Personal Loan Calculator  Car Loan Calculator Borrowing Power Calculator Purpose Loan type Buying furniture Budget Personal Loan Going on holiday Line of Credit Upgrading your car New Car Loan Buying a home Home Sweet Home Loan Buying an investment property Value Plus Residential Investment Loan If you’re looking to purchase a home, investment property, car, motor bike, boat, caravan or any other item that requires a loan, contact us today! We offer quick answers on applications, competitive rates and flexible terms so you can make it happen as soon as possible. As a customer-owned local bank on the South Coast and Far South Coast, we work hard to earn your trust. That means we’ll always do everything to ensure you receive the best customer service possible. If you ever need someone to talk to about anything related to your account, please get in touch with our friendly and local based team. Horizon Bank has a branch network spanning the NSW South Coast and Illawarra. Horizon Bank branch locations: Albion Park, Bega, Bermagui, Berry, Merimbula, Moruya, Nowra, Thirroul, Ulladulla & Wollongong. The content in this article has been prepared by Horizon Bank for general information only and it is not intended to be professional advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice where appropriate, and consider the relevant General Terms and Conditions before deciding whether to acquire any products or services offered by Horizon Bank and/or its affiliated partners. We do not recommend any third party products or services referred to in this article unless otherwise stated and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. Horizon Credit Union Ltd ABN 66 087 650 173 AFSL and Australian Credit Licence Number 240573 trading as Horizon Bank.