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If you locked in a fixed-rate loan before interest rates began to rise, you may be worried about the upcoming increase in your mortgage when the term you locked in comes to an end. Here are a few tips on how you can avoid a budget shock when your mortgage reverts to a variable rate. When the interest rates first began to rise from their record-low rates, many homeowners rushed to lock in a fixed-term rate to secure a lower, stable rate. The Reserve Bank of Australia estimates that close to 1 in 4 mortgages were ‘fixed’ at the end of last year, which essentially means the rate was locked in for a period. Usually, banks will offer a fixed-rate period of 1, 2, 3 or 5 years. However, for homeowners who had locked in a fixed rate earlier, such as in 2020 or 2021 when rates were much lower, will likely feel the pinch a lot more when their fixed-term ends than those who opted for a fixed rate in 2022 or 2023. This is because the rates jumped up from around the 2 per cent mark to closer to the 6 per cent mark, and this could potentially add hundreds or thousands of dollars to their repayments in interest, depending on the size of the loan. It's difficult to know what the market is going to look like in the future when opting for a fixed-rate, which is usually done from the perspective of knowing exactly what your repayments will look like for a certain term. Unfortunately, all those fixed terms will eventually expire, and homeowners will return to a variable rate, usually paying more interest. Some may fix their loan again when it comes to this time, but it will likely be at a higher rate than the one they were offered in their previous fixed-mortgage term. If you’re finding yourself in this position, here are a few ways you can make the transition a smoother, and hopefully a less stressful experience. Build a buffer A good idea to test how you will be able to manage the higher repayments is to start putting a bit extra into savings between now and the end of your fixed rate mortgage term. A starting point for this could be to use a mortgage calculator to identify a ballpark of what your new repayments will be when the fixed term ends, and put the difference into a savings account. This will give you an idea of how the household budget will be affected, plus you may even benefit from extra interest in the savings account too. Some fixed-term loans also allow you to make extra repayments, which could help ease the burden when the mortgage increase occurs. At Horizon, we allow up to $30,000 in extra repayments each loan anniversary year, which helps reduce the term of the loan. Horizon also allows you to redraw on those funds free of charge if you require them. Adjust the budget If you work out the new higher repayment and it’s looking tight budget-wise, you may need to look at making some cutbacks. Firstly, look at scaling back discretionary spending where it’s feasible, such as limiting dining out or getting takeaway meals and subscriptions or entertainment activities that are not necessary. Reviewing your budget is always a good idea to ensure you are using or saving your money effectively for your household. Many online tools can help with budgeting and identifying leaks, such as MoneySmart’s budget tool.  Horizon Bank also has some budgeting tools and tips to help out.  Come up with a plan of action It’s important to have an action plan before the fixed-rate term ends so you’re prepared for the change in repayments. A good start is to discuss with your lender everything you need to know before the rate changes; for example what rate you will be offered if you were to fix the mortgage again, or what rate you will be offered if you were to stay on a variable once it reverts. Sometimes there’s a difference between what a new customer and an existing customer would be offered ratewise. If you’ve been with your bank for a while and have always made repayments on time, you may find your bank is willing to negotiate to keep your business. If you’ve paid off more than 30% of the value of your property, you may find you’re eligible for a rate discount. If you want to go into another fixed term loan, it’s also wise to think about that in advance so you can do the sums and get things started promptly.  However, if you decide that you want to refinance to another lender, don’t forget to weigh the costs against the savings. Some lenders will charge exit and application fees, so it’s worth doing your calculations to see if refinancing makes sense for you and your situation. Finally, if you’re having trouble paying your loan and this is causing you anxiety, you can always speak to your lender’s hardship team or a financial counsellor for free via the National Debt Helpline: 1800 007 007.   The end of a fixed-rate mortgage term can be a challenging transition, especially in an environment of rising interest rates. However, you can navigate this phase with minimal financial discomfort with careful planning and strategic decision-making. Building a financial buffer, adjusting your budget, and outlining a clear plan of action are all effective ways to prepare for the increase in repayments. Remember, open communication with your lender is key. Understand the new rate you'll be offered, negotiate if possible, and consider all your options, including another fixed term or refinancing, always weighing the costs against potential savings.   With the right approach and resources, you can manage this transition smoothly and maintain control over your financial future. For more information on home loans and navigating changes in mortgage rates, visit Horizon Bank 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.  

Struggling to qualify for a home loan on your own? There may be some other ways to secure your first home! Here are 5 popular strategies that may help you. Property prices are still high and rising in a lot of major cities, so the dream of owning a home can sometimes feel like it’s moving further out of reach for many Australians. However, for savvy buyers, there are still plenty of ways to get your foot in the door. Thinking outside the box… here are some ideas. 1. Buy with a friend or relative Consider buying with a loved one or friend. It’s simple, you can split the cost of the deposit and the loan, which make it easier for you to both qualify for the loan with your bank and meet the loan responsibilities. Before going ahead with this option, it might be worth getting professional advice. It’s best to do so, so that you have an exit plan and preparation for unexpected events such as job loss or getting sick. Check out Horizon’s range of Home Loans or reach out to a lender today to discuss this option more. 2. Get a guarantor loan A guarantor loan means the involvement of a third party – this is usually a parent, extended relative or friend. They put  their own assets against your loan as a guarantee. This will give your lender security in case, for some reason, the loan can’t be repaid. While guarantor loans are good to help those who don’t otherwise qualify for a loan, it comes with risks for the guarantor. If you’re unable to pay the loan back, the lender can ask the guarantor to pay the loan. If they can’t repay the loan, their assets can be repossessed. At Horizon Bank we have a Family Equity Loan, which allows family members to use the available equity in their home or investment property to provide additional security to help cover any borrowing shortfalls between the deposit and loan amount. Reach out to one of our lenders today to learn more, or enquire now online. 3. Consider rentvesting If you’re not able to buy your dream home because you can’t afford it, you could consider investing in a property to rent out at a smaller cost, therefore getting a smaller loan, and renting yourself somewhere else in your preferred area that suits your lifestyle choices. This gives you the opportunity to own a property. Often, owners will use the rental income they earn to pay off their loan, and sometimes even help cover their own rental costs, as well as helping with other property-related expenses. You may want to consult with an accountant to learn about any tax benefits (negative gearing). There is a risk of over-committing with this strategy. The costs may end up outweighing the income your property generates, so it’s very important that you do the math beforehand and work out your budget. You can use our budget calculator to assist in budgeting. If you’re thinking about buying an investment property, check out Horizon’s investment loans. 4. Look farther afield Regional areas are rapidly growing and can often offer similar lifestyle opportunities at a lower cost. Consider a change in scenery if moving is an option for you, and move somewhere where a property market hasn’t caught up to the likes of major cities yet. Regional home buying has been trickier for buyers in the past, with concerns of a move somewhere regional or to the country could hamper their links to city-based employers. This in a post COVID era is an issue that has evaporated, thanks to new technology and more flexible work opportunities. 5. Take advantage of incentive schemes There are a number of national, state and territory based incentive schemes to check out, depending on where you plan to buy and/or live, that can help you get started. These include: First Home Owner Grant – Eligible first-home buyers that are planning to live in their property can get a grant of between $10,000 and $30,000. This scheme is funded by states and territories. Help to Buy – This scheme is set to arrive later in 2024, and is when the federal government offers eligible buyers a contribution of up to 40% of a home’s cost, in exchange for a proportional equity. NOTE: This scheme will only be available to a limited number of prospective homeowners. First Home Super Saver Scheme – This program allows savers to build up their deposit within super while benefiting from tax concessions. Up to $50,000 can be saved up in the borrower’s super account and they can withdraw it once they are ready to apply for their loan. Other state and territory based schemes – Different jurisdictions have slightly different approaches in helping first-time buyers, so it’s worth checking your state and territory websites to see what they can offer.   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.

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.

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. 

Buying an investment property can be an overwhelming process, especially if it is your first time researching property investment. That’s why we have put together the top 5 things you should consider when making this purchase for your future. Clarify your goals and do your research Smart property investment starts with asking yourself, why am I investing in the first place? Will buying an investment property affect my lifestyle and current circumstances? You’ll need to decide whether you’re buying to make an income now, or as a longer-term investment. Researching different property types and suburb profiles will help you clarify what you’re after. When you have found a property you're interested in you can then research the property’s potential for capital growth, rental income and ongoing costs. Choosing a property type Apartments, units, townhouses and smaller homes are attractive options for investing in property. If you’re keen to renovate, find a property that could use a little TLC to increase its value over time. Properties that have a wide appeal and many features will make it more attractive to potential buyers. For example, a property near shops, transport and with a garage and second bathroom will appeal to families, retires, couples and single professionals. Where to buy? Buying in a familiar area you have grown up in or lived in for a while will take you less time to research. Speak to local real estate agents for their take on the area and check recent sale prices to give you an idea of what you can expect to pay for local properties. New suburbs and estates are growth areas where there is potential for capital gains and higher rental yield, that is properties with higher rent compared to the property value. Find out about the vacancy rates in the neighbourhood. A high vacancy rate may indicate a problem with the area which could be anything from crime to inadequate infrastructure and public transport. Buying property in an area with high vacancy rates could make it harder to rent the property out, or sell it in the future. Look at the local government website to find out about proposed changes in the suburb that may affect future property prices. Things like new developments or zoning changes can affect the future value of a property. Consider the costs Aside from the purchase of the property, there are initial and ongoing costs that first time property investors need to be aware of. We’ve broken them down for you here. Initial Loan deposit Loan Establishment Fees – these may or may not be applicable to your investment loan. Mortgage Insurance – only payable if your deposit is less than the amount required by your financial institution. Utility Connections Stamp Duty - Stamp duty costs will differ from state to state and will depend on the purchase price of the property. Use our stamp duty calculator to estimate stamp duty costs. Legal Costs – transfer of ownership of the property title will require a solicitor or conveyancer.                 Ongoing cost of investing in property Insurance (Building & Landlord) - Building and landlord insurance will not only protect you from unforeseen building damage, but also common tenant problems i.e. damage or the tenant refusing to pay rent. Check tenant damage is included in your cover. Yearly Mortgage Fees – these may or may not be applicable to your investment loan. Land Rates                                 Body Corporate Fees – may be applicable if you have bought a townhouse, villa or unit. Mortgage Repayments – if rental income doesn’t cover all of your repayments, you’ll need to budget to cover the shortfall. Utilities - You can opt to pay only the connection services. Discuss the best option with your property manager. Property Management – property management fees can vary, they generally charge a letting fee and a management fee based on a percentage of the gross weekly rental. This is usually between 5 – 12 percent. Repairs - As the landlord, maintenance is your responsibility. Some repairs are tax deductible so it’s a good idea to keep all receipts and invoices. When is it the right time to buy an investment property? The best way to invest in real estate is to find the right time for you. This will depend on your affordability and borrowing power. If you have extra savings, have found a property at a reasonable price and mortgage rates are low, it could be an opportune time to buy an investment property. Having equity in your home will also appear favourable to a lender as you have reduced the amount of debt owing. Speaking to a financial planner and accountant to assess your situation is a good place to start to help with decision making. Let our team at Horizon get you on the path to property investment success. Get in touch with us today and let us help you on your journey. 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.

An exciting journey  If you’re a first time home buyer, buying a home is likely to be the biggest single purchase you’ve ever made. It’s a big deal and can be stressful and overwhelming. Knowing what’s involved in the process, will make you feel confident as you move through the motions from inspecting properties to signing a contract and receiving the keys.   You’ve found the one, now what? When you’ve found a home for sale you’re ready to make an offer on, it's time to review the contract of sale. The person selling the property must have a contract of sale prepared and available for inspection for potential buyers. You’ll possibly find a few copies of these on the kitchen bench or other obvious places within the property. If none are readily available, ask the real estate agent for a copy. Once you obtain a copy, take it to your solicitor. They'll review it closely with you before signing to ensure it’s acceptable. Next we’ll talk about making an offer. Keep in mind that having pre-approval for a home loan is ideal before making offers, to ensure you know exactly how much you can afford to borrow. You'll be able to make a realistic offer on the property. Pre-approval also streamlines the process of finalising your finance before making an offer.  Making an offer Once your solicitor gives you the go ahead that everything in the contract looks OK, you’re now ready to put an offer in writing to the real estate agent or seller. An email to the real estate agent will usually suffice. Your offer should include how much you’re willing to pay and any conditions to the sale such as inclusions, repairs, deposit amount or timeframe for moving in. Ask your solicitor to help you prepare your written offer so you don’t miss any important details. Let the negotiations begin If your first offer is accepted straight away congratulations! However, the seller may also enter into negotiations with you over price. Keep in mind that the seller is also free to take written offers from other potential buyers and can even exchange contracts with them. Paying a small deposit as an expression of interest lets the seller and real estate agent know you’re serious. If your offer is not accepted and you’ve paid a holding deposit, this will be refunded.  Exchange and signing of contracts Once the sale price has been agreed, you’ll sign the contracts and your solicitor will facilitate the exchange. At this point you’ll need to pay the full deposit which is usually 5-10% of the purchase price. From the date the contract is exchanged, you become the owner of the property. Now is the time to consider getting it insured. Check out our information on home and contents insurance.  What you need to know about the cooling off period When you buy a residential property in NSW, you have five business days called the cooling-off period after you exchange contracts. During this period, you may get out of the contract and withdraw from the sale as long as you give written notice. The cooling-off period starts as soon as you exchange and ends at 5pm on the fifth business day after exchange. Keep in mind that if you do withdraw during the cooling off period, you’ll have to pay the seller 0.25% of the purchase price. These five days can be a good time to check the condition of the property and, if necessary, arrange pest and building inspections. *Take note: the cooling-off period does not apply if you buy a property at auction or exchange contracts on the same day as the auction after it is passed in. Settlement Settlement usually takes place about 6 weeks after contracts are exchanged (although a longer or shorter settlement period can be negotiated with the seller). This is when you pay the rest of the sale price and stamp duty using your home loan and become the legal owner of the property. Your solicitor and lender will work together to keep you informed about settlement and when you’ll need to start making loan repayments. It's a good idea to inspect the property one last time on the morning of settlement day, to ensure it is in the same condition as when contracts were exchanged. After settlement, you’ll receive the keys and you’ll be able to move in! Happy days! Get in touch with the friendly team at Horizon Bank to discuss your home buying 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. 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.