Are you an accountant? You could save on your home loan costs.
Working as an accountant has many benefits, not the least of which are your great long-term career prospects and high earning potential. Lenders are aware of these features of the accounting profession and as a result, they’re often willing to offer home loans for accountants with unique benefits and features. From waived LMI costs to discounted interest rates, these loans can help borrowers enjoy sizeable savings.
How do home loans for accountants work?
Generally speaking, home loans for accountants work in much the same way as any other home loan. They are available for owner-occupiers, investors, refinancers and those looking to renovate their property.
However, home loans for accountants offer selected special discounts that you won’t find on a regular home loan. For example, while most loans will require you to take out lenders’ mortgage insurance (LMI) if you don’t have a 20% deposit, many home loans for accountants will allow you to borrow up to 90% LVR (loan-to-value ratio) or even more without requiring any LMI.
In addition, some home loans for accountants are offered with a discount on the standard variable interest rate, resulting in big savings in interest repayments.
Just how much can I save by not paying LMI?
Here are some figures to show you just how much you could save by taking out a home loan which waives LMI if you were a first home buyer:
|Deposit size||Property Value||LVR||LMI charged (excluding stamp duty)|
Source: Genworth LMI Premium Estimator
Annette Saves Thousands
Annette is a high-level business accountant who earns an annual salary of $170,000. She’s a member of CPA Australia and has so far been renting an apartment, but now she’s decided she wants to purchase a $1.5 million house in the suburbs. However, because she only has a deposit of $150,000 and will need to borrow 90% of the purchase price, her bank will require her to pay for LMI before they will approve a loan.
Frustrated by this extra expense, Annette does a little research and discovers a lender that offers loans with special benefits for accountants. Annette is thrilled to learn that she can borrow up to 95% of the property’s purchase price without having to pay LMI, while she can also take advantage of a 0.25% p.a. interest rate discount. The LMI saving alone would amount to approximately $33,480 according to the Genworth LMI Premium Estimator.
How to compare home loans for accountants
- Interest rates. The interest rate is the first feature you should look at for any loan, as it can greatly affect the amount you will have to pay back to your lender. Look for a competitive rate and decide whether you want a fixed or variable loan. Also look at the comparison rate to get an idea of the true cost of the loan once fees have been added into it.
- Fees. Make sure you’re aware of all the fees and charges that apply to your loan. Even the smallest of fees can quickly start to add up to a significant amount. Note down and compare upfront fees, ongoing fees and exit fees to get a good comparison between loans.
- Extra benefits. Compare the special features of home loans for accountants such as waived LMI and interest-rate discounts. How big is the discount available? How much of the property purchase price can you borrow without having to pay for LMI? Some lenders will allow you to borrow up to 90% without paying LMI, whereas others could allow up to 95%. Some lenders can even lend up to 100% if you’re an owner occupier of your home, although this might still come with LMI.
- Repayment options. Look for loans that offer flexible repayment schedules so you can repay your debt at a pace that suits your budget. You may also be able to benefit from a loan that allows you to make extra repayments and pay the loan out early without incurring a penalty. Note that fixed rate home loans generally won’t allow unlimited extra repayments, but could offer extra repayments up to a certain amount each year.
- Other features. Compare other flexible features that some lenders may offer, including redraw facilities, offset accounts, linked credit cards and more. The importance of each will depend on how you’ll use your home loan. Offset accounts are linked transaction accounts which you can deposit your salary and other income into. The amount in the offset account can reduce the interest charged on your home loan.
Pros and cons of home loans for accountants
- Discounted interest rates. Enjoy a discount on the standard variable rate of many home loans to let you save on interest charges.
- No LMI. Many lenders will allow you to borrow a higher LVR without having to fork out extra cash to cover the cost of LMI. This can be a substantial saving as explained in the table above.
- Other features. Many of these loans will offer a range of other flexible features, for example the ability to pay your loan off ahead of schedule, to make it easier to pay off your debt.
- Higher maximum LVRs. Some lenders will offer maximum LVRs of 100% for owner occupiers.
- Income and professional requirement. Many loans will require you to earn a certain minimum income in order to qualify, for example an annual salary of at least $150,000. Most lenders will also want to see specific industry qualifications and bodies.
Talk to a broker today and find a home loan tailored towards accountants
FAQs about home loans for accountants
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