Home loan FAQs

Offset accounts are an easy way to save some coin when repaying your mortgage.

An offset account is a transaction account linked to your home loan designed to lower the amount of interest charged on your loan.

The balance is 'offset' against what you owe on your home loan, meaning you're only charged interest on your home loan minus the total amount in your offset account.

Let’s say you have a mortgage of $200,000 and $20,000 in your linked offset account. That means you’ll only be charged interest on $180,000.

This simple set up can potentially save you hundreds or even thousands in interest repayments and help you repay your loan even quicker.

You can use the app to see which loan your offset account is linked to and make any subsequent transfers.

Open an Everyday Account online or via the app and link it with either our Premium Plus Package Variable Home Loan or Premium Variable Home Loan to receive 100% interest offset.

If you already have an Everyday Account and eligible home loan with us, you can link your account by giving us a call on 13 19 87 or visiting a branch.

You can set up your offset account when you take out a mortgage loan or later.

When you bank with us, you can have unlimited offset accounts on eligible home loans.

A redraw facility lets you access any additional repayments you've made towards your home loan on top of your minimum repayments for eligible home loans.

If you choose to pay more than your minimum repayments, the additional balance will appear in your home loan account that you can re-access if you need it.

There may be fees associated with a redraw and it could also affect the interest you pay on your home loan.

Set up an online redraw for your eligible home loan by completing a Redraw Authority Form. Once all parties have signed and you’re set up, you can manage account transfers into another Newcastle Permanent account using the app or internet banking. Transfers are free for Premium Plus Package and Fixed Rate home loans. You can get in touch by calling or visiting a branch to cancel your redraw at any time.

A redraw facility allows you to withdraw any excess repayments you’ve made to your loan. You can do this at any time. And it might come in handy when you have an emergency.

An offset account reduces the payable interest on your loan. This may help you save money during your loan term and help you repay your loan faster.

They both offer certain benefits, but an offset account can provide more flexibility.

The option you choose will depend on your financial circumstances.

Principal and Interest (P&I) repayments allow you to repay the loan down and eventually own your property. Your repayments are made up of the principal loan (the amount you borrowed) plus the interest charged on the loan balance. Each payment reduces the amount you owe and the interest charged, helping you pay the loan off over time.

Interest only (IO) repayments only cover the interest charged on the loan and not the principal amount borrowed. You might choose this option if you need to minimise your repayments in the short-term. When the interest only period ends you’ll still owe the total amount of your principal loan and your repayments may be higher.

Fixed interest rates lock in your repayments, and they won't change for the loan term. You can easily budget, because you'll know exactly what you'll pay each month.

Variable interest rates could vary from month to month based on the changes to the interest rates. If the rates rise, your repayments may rise. If the rates fall, your repayments may be less.

Interest calculations vary depending on the loan type. Download our Interest facts for loans PDF for more information.

There are several options for setting up your home loan repayments, depending on your financial goals and circumstances. You can also choose to repay your loan weekly, fortnightly or monthly to suit your budget.

• Automated repayments: You can easily set up automatic repayments for all principal & interest (P&I) loans via the app or internet banking. Any changes to your minimum repayment amount will automatically adjust and you can choose to add an additional amount to your repayment if you would like to pay more each month.
• Fixed or nominated amount: All other set transfer types will need to be manually updated or adjusted via the app, internet banking, by giving us a call or visiting a branch.

If you have transfers set up from another financial institution, you’ll need to contact them to update your payment or check your current transfer amount.

You can now set up repayments for eligible home loan types and we'll automatically adjust the minimum loan repayment amount for you if it changes.

App:

1. Log on to the app and the Pay button
2. Choose your account and home loan
3. Select the 'Automate repayments' button
4. Your monthly repayment amount will automatically populate
5. You can add an additional amount on top of this, otherwise select 'Next' and your payment is ready to go.

Internet banking:

1. Log on to internet banking and navigate to the Transfer screen
2. Select your account and loan from the drop down boxes
3. If your loan is eligible, you will see a check box for Automate loan repayment
4. Select the Automate loan repayment check box and follow the prompts.

You can view your current and next minimum repayment amount by selecting your loan account within the app and internet banking. Alternatively, you can give us a call on 13 19 87 or check your email/mail for an update on any changes to your loan account.

You can make additional repayments on most variable home loans at no extra cost. Paying an additional amount on top of your minimum repayments will put you in advance of your loan and can come in handy for emergencies or provide you with a financial buffer if you fall short or miss a payment for some reason. You can easily set this up via our app or internet banking.

For a fixed-rate home loan, you can repay up to $25,000 per calendar year during the fixed rate period without incurring a break cost. Check our Break Costs and Fixed Interest Guide for more information.

You can repay your loan early without an exit fee if you have a variable home loan with us, however some government fees may apply to discharge your loan. If you have a fixed rate home loan and want to pay it out early, break costs may apply.

We offer a Hardship program that may help customers that are experiencing financial difficulty. We will talk to you about your current circumstances to understand what type of assistance may be available.

We do not believe in a ‘one-size fits all’ approach. We aim to tailor an approach based on your individual circumstances and address every request in confidence.

Assistance that could be provided in appropriate circumstances includes (but not limited to):

• Pausing repayments
• Reducing repayments
• Capitalising any arrears e.g. putting arrears back into the balance of the loan
• Investigating if there are any other options that may assist our customers with their lending obligations
• Repayment Holiday e.g. If your loan is in advance, you may be able to use those advance repayments.

Lenders Mortgage Insurance (LMI) is a type of insurance that a lender takes out to protect itself against the risk of not recovering the outstanding loan balance. Specifically, this occurs where a borrower becomes unable to meet their required loan repayments and the proceeds from the sale of the property fall short of paying the outstanding loan balance in full (known as ‘shortfall debt’). The LMI insurer can recover from the amount of the shortfall from the borrower.

LMI is payable by a lender where the borrower does not have the required loan deposit (typically 20% of the property value). This cost is generally passed on as a fee to the borrower. LMI will be added to the borrower’s home loan balance and interest will be payable on this amount over the life of the loan.

It is important to note that LMI protects lenders against potential losses and not the borrower (or any guarantors). This means a borrower cannot make a claim under the LMI, only the lender can. LMI is different to Mortgage Protection Insurance, which a borrower can take out separately to insure themselves against the possibility that they are unable to meet their repayment obligations.

Where a borrower meets all other lending criteria, LMI is a way a borrower can own a home sooner with a smaller loan deposit than is usually required (typically the deposit required is 20% of the property value). By reducing the risk of loss on behalf of the lender, it makes it easier for you to obtain mortgage finance.

Lenders Mortgage Insurance (LMI) is insurance lenders take out to protect against any losses incurred if the borrower is unable to repay their loan. LMI is different to Mortgage Protection Insurance. A borrower can take out Mortgage Protection Insurance separately to insure themselves against the possibility that they are unable to meet their repayment obligations.

The cost of LMI is dependent on several factors, including but not limited to, the amount of the home loan, the value of the property being purchased and the type of loan obtained.

Lenders Mortgage Insurance is charged by the insurer and will vary depending on the particulars of the loan application. We will charge the borrower what the LMI insurer charges us.

We pass LMI on as a fee to the borrower without any additional mark up. This fee will be disclosed on your loan schedule and added to your home loan balance and will be payable at draw down. You will have to pay interest on the LMI amount over the term of the loan, and the amount will increase what you owe on your loan, along with your minimum monthly repayments.

If we require you to pay for lenders mortgage insurance, and the policy provides an entitlement to a refund if you repay your loan before the end of the policy, we will ensure that we claim a refund where available and pay that amount to you.

If you fully repay this loan early, we may receive a partial refund of this premium from the Insurer. If we do receive such a refund, then we will pay you the amount of refund received by us. The period during which we may receive a refund varies between insurers but in no case do we receive a refund for loans repaid 1 year or more after the settlement date.

If LMI was a condition of your loan, the relevant LMI insurer is noted on your loan schedule.

For factsheets form our LMI insurers, visit:

• QBE
• Helia