Illawarra Credit Union

About Bare Essentials Home Loan

Key Features

• Generally speaking, offset accounts is more common with variable rate home loans than fixed loan options.
• While it does not have the convenient that comes with an offset account, but $Bare Essentials Home Loan comes with a redraw facility. A redraw facility works similar to an offset account. If you put the same amount into home loan as extra repayments, your interest bill will reduce by the same amount, but still have access those extra funds if you need them later.

Interest only loans have traditionally been tailored to investors so they can reduce their mortgage repayments and maximise their tax benefits and overall return on investment (ROI). However, getting home loan with interest only (IO) has its place and some lenders are willing to consider your application if you can provide valid reasons.

LVR is an acronym for Loan-To-Value Ratio. The LVR is the amount you are borrowing against the property value being used as security, represented as a percentage.

Unlike in the US, there are no lenders in Australia that offer 20 or 30 year fixed rates for standard residential home loans. Illawarra Credit Union Bare Essentials Home Loan offers fixed loan terms between 1 - 3 years.

Fees & Costs

• Illawarra Credit Union charge a discharge fee of $350, which covers the cost for removing the mortgage that has been registered on the title of your property.
• Illawarra Credit Union may also charge you a fixed-rate break cost if you refinance out of Bare Essentials Home Loan or sell your house before the fixed term ends. It can cost thousands of dollars, and the advantages of breaking the fixed loan won't always outweigh the disadvantages.
• Selling the property or refinance during the fixed rate term can trigger hefty fees for breaking a fixed rate contract, and fixed rate loans tend to have restrictions on making extra repayments. Before you lock your rate in, you need to be sure that a fixed rate home loan is suitable for your situation.
• There is upfront costs of $1290 to apply for Bare Essentials Home Loan, with no ongoing account keeping fees.

Borrowing Limits

• Illawarra Credit Union Bare Essentials Home Loan does not offer tier pricing for lower LVR. With Bare Essentials Home Loan, you can borrow upto $95% LVR.

Eligibility

• Interest only repayment option is not available with Illawarra Credit Union Bare Essentials Home Loan for buying next home.
• Interest only repayment option is not available with Illawarra Credit Union Bare Essentials Home Loan for refinance.