Hi Richard,

Congrats on the pay rise! What a great way to start the new financial year.

If you’re a homeowner, it’s likely your higher income will help with you look even more attractive to your lender. This means, you might be able to negotiate a better rate or potentially refinance your home loan and get a better deal (and a cashback too). Best bet is to review your options with a broker. 

If you’re looking to buy, a higher income could give your borrowing power a nice little boost and improve the rate you’re offered! Make sure you highlight this with your broker, so it’s reflected in your home loan application.

Love the forward-thinking Nicole!

If you’re in the market to purchase a property, the extra cash could help you top up your deposit and increase your borrowing potential (maybe that dream home is in your price range now).

A bigger deposit usually means the amount you need to borrow is less and, in turn, your repayments will be lower. A bit of extra cash may also reduce your loan to value ratio (LVR), which means you can score a better rate.  

Or, if you don’t quite have a 20% deposit yet, it could be the cash you need to help you avoid (or reduce) paying lenders mortgage insurance (LMI). So many benefits!

If you already have a home, moving these extra funds directly into your home loan would also reduce your loan size and LVR. Again, this often means you can go back to your lender and secure a lower rate and reduce your repayments (your broker can help with this). But, in most cases, the funds will be locked away.

Alternatively, you could park the funds in your offset account (if you have one) and reduce the interest payable on your home loan. This way, you’ll still have access to the cash if you need it and you’ll be paying off your home loan faster.

Win-win!