BSB 806 015

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BSB 806 015

Frequently Asked Questions

Home Loans

Questions...

  • Can I redraw from my loan using Internet Banking?

    Yes, you can redraw up to the amount that is shown as available on your loan balance. Your upcoming minimum monthly payment will be taken into consideration in the amount shown, so redrawing will not result in you falling behind on your repayments.

    For example, if you have paid a total additional amount of $9,000 into your loan, and your next repayment is $1,500, you will see an available balance of $7,500.

    To enable redraw using Internet Banking, you'll need to return a completed Redraw Authority Nomination Form via secure mail or in a branch. Please note that we do not accept digital signatures.

  • What should I do if I sell or refinance my property?

    If you sell or refinance your property you will need to request discharge papers. To request these, please call us on 13 25 77 or visit your local branch and one of our friendly team will be happy to assist.

    The processing time for your request will vary depending on the complexity. Once P&N Bank has received all required documents (including variations if applicable) and signed authorities, it will take between 2 - 5 working days.

    Should you wish to discuss your options further, please call us on 13 25 77 or visit your local branch to speak with one of our home loan specialists. Our team can review your current situation and guide you through the process. 

  • What is a discharge/refinance authority?

    A discharge or refinance authority is used to release the security (e.g. property or cash security) you’ve provided for a home loan. You may use this authority if you’ve sold your property and wish to pay off your loan in full.

  • What happens if I get sick, have an accident or lose my job and I can't pay my loan?

    When you took out your loan or credit card with us, you would have been offered optional insurance to cover unforeseen events like accidents and unemployment. 

    Please call 13 25 77 or visit your local branch so we can check whether you have insurance on your loan.

    In the instance that you do not have the appropriate level of cover, please contact us to discuss your situation further.

    Further reading on Financial Hardship.

  • Can I pay off my home loan faster?

    Most of our loans can be repaid at a faster rate which can reduce the cost of the loan to you. However, some loans contracts do not allow the loan to be paid out earlier.

    Use our loan calculators to explore ways to pay off your loan sooner and learn how much money you could save in future interest payments. Our home loan calculator can help you get a better understanding on what your current loan will cost over its life, then see the results of making hypothetical changes.

    To find out if your loan allows early payout, please call us on 13 25 77 or visit your local branch and one of our friendly team will be happy to assist.

    You may also be interested in our article on why you should make extra home loan repayments.

  • How long will it take to approve my home loan?

    Typically home loan applications take around 5 - 7 days for approval, depending on the complexity of the loan. This allows for a valuation of the property if required and confirmation of all required documentation.

  • What's an offset account?

    An offset account is a savings account linked to a home loan that reduces the interest payable for the home loan. Every dollar in this account is interest-free for the home loan.

    For example, if you have $5,000 in your offset savings account, this will result in $5,000 of your home loan being interest-free.

  • How much can I afford to borrow?

    Our home loan borrowing calculator helps you work out how much you can borrow and what your repayments would be so that you buy your home with confidence. Go to the Home Loan Borrowing Calculator.

  • Can I make additional payments to my fixed rate home loan?

    This will depend on your loan. You will need to check your loan contract or home loan key fact sheet to ensure extra repayments are allowed on your fixed rate loan. Alternatively you can contact one of our Home Lending Specialists on 13 25 77.

  • Can I skip the next loan repayment that's due?

    If your loan balance is showing an available amount, you may be able to skip a payment on your loan. To ensure you won’t fall behind, this amount will take into consideration your upcoming minimum monthly payment. If you’d like us to check if you’re sufficiently in advance, please call us on 13 25 77 or visit your local branch.

  • Am I on the best home loan interest rate?

    Our home loan specialists will be happy to review your current loan to ensure you are on the best rate possible for your situation, please call 13 25 77 or visit your local branch and one of our friendly team will be happy to assist.

    Alternatively, one of our mobile lenders can come to you, even on weekends.

  • Are there any penalties for paying out my home loan early?

    There is an industry standard discharge fee applicable to all home loans. Depending on your home loan type, a break cost may also apply. Please review our fees & charges or your loan contract for more details. 

    If you need more information, please call 13 25 77 or visit your local branch and one of our friendly team will be happy to assist.

  • Will my home loan repayments automatically change when interest rate changes are announced?

    This depends on the type of home loan that you have and how it's structured. If your loan is on a variable rate, by its nature the rate will change, whereas fixed rate loans will not change for the fixed period of the loan.

    If your monthly home loan repayment does change, recurring transfers may not update automatically. Should you wish to find out if you need to make changes to yours, please contact us on 13 25 77.
     

  • What are the current fees associated with my home loan?

    The fees and charges applicable to your particular home loan will be listed in your loan contract.

    You may also incur a late payment fee if your home loan repayments are not paid by the monthly repayment due date.

    Please refer to our home loan fees and charges or contact us on 13 25 77 for more information.

  • Where can I find my minimum loan repayment?

    You can check your minimum monthly loan repayment and when your payment is due via our Mobile App or Internet Banking. 

    Mobile App
    Go to your loan account and reveal the information 'i' icon. Extra loan information will display including your next payment due date and payment amount. 

    Internet Banking
    Go to your account and expand the more details section (tip: click on the ellipsis …). Your next payment date and amount due will display. 

    If you need more help, please call 13 25 77 or visit your local branch and one of our friendly team will be happy to assist.

  • How do I find the cheapest home loan?

    When looking for the cheapest home loan, online comparison tools and calculators as well as speaking with home lenders or mortgage brokers can help you find the best option to suit your needs. Call us on 13 25 77 to speak with a lending specialist, or one of our mobile lenders can come to you to help get you started.

  • What is a loan redraw facility?

    A redraw facility allows you to access payments that you have made in addition to the required minimum repayments on your loan. Not all loans offer the option to redraw your extra payments, so this should be taken into consideration when choosing your loan type.

    To gain access to redraw on your loans, will need to complete the appropriate form.

    If you want to redraw funds as a once off without setting up ongoing access, please complete the Loan Redraw Request form. To have access to redraw on your loan via Internet Banking, please complete the Redraw Authority Nomination form. You can return the completed form in a branch or via Secure Mail in Internet Banking. Please note that we do not accept digital signatures.

  • What does LVR stand for?

    LVR stands for Loan to Value Ratio. It relates to the amount of the loan against the value of the property you are buying.

    For example, if the property you intend to purchase is valued at $600,000 and the loan you apply for is $480,000, your LVR would be 80%. 

    It's good to know your LVR when exploring your home loan options as discounted interest rates can sometimes be offered on a lower LVR. Also, if your LVR is higher than 80% you can be charged Lenders Mortgage Insurance (LMI).

    If you need more information, one of our mobile lenders can come to you, even on weekends, and talk you through the best option for your home lending needs. Alternatively, please call 13 25 77 or visit your local branch and one of our friendly team will be happy to assist.

  • What is Lenders Mortgage Insurance?

    You will usually be required to pay Lenders Mortgage Insurance on some loans when you borrow more than 80% of the property’s value (loan to value ratio). This insurance is a form of security deposit that protects the lender if the borrower is unable to make their home loan repayments.

  • How can I compare home loan rates?

    Our home loan comparison calculator can be used to show a side by side comparison of our home loan rates and products.

    We have a range of different home loan options depending on your deposit, whether you want a fixed or variable rate and whether you are an owner occupier or investor.

    To find out more, please contact us on 13 25 77 to speak to a lending specialist or alternatively, you can arrange for one of our mobile lenders to come to you and discuss your needs.

  • Can I split my home loan?

    Splitting your home loan lets you divide your debt into multiple loans (e.g. a fixed rate loan and a variable rate loan). This may help you to reduce the impact of interest rate fluctuations while retaining the features and benefits you want. For example a fixed rate loan gives you the confidence of knowing how much your repayments will be and protects you against rate rises. In comparison, a standard variable rate loan allows you to make extra repayments and gives you the flexibility to redraw them at any time, providing you meet the relevant requirements to do so.

  • How is interest calculated on home loans and personal loans?

    Interest on P&N Bank home loans and personal loans is calculated daily and charged in arrears.

    Use our loan calculators to explore ways to pay off your loan sooner and learn how much money you could save in future interest payments. Our home loan calculator can help you get a better understanding on what your current loan will cost over its life, and then see the results of making hypothetical changes. 

    Please refer to the interest rates on our website for all current interest rates on our products.

  • I'm interested in refinancing my loan, what should I do?

    When looking to refinance your home loan you can request an appointment online, visit your local branch or call us on 13 25 77 to speak with one of our home loan specialists. Alternatively, one of our mobile lenders can come to you, even on weekends, and talk you through the best option for your home lending needs.

  • Which home loan is right for me?

    When choosing your home loan, it's important to work out what features you’re after and how much you’ll end up paying over the life of the loan. The type of loan you end up with will also depend on the purpose of your application and your personal circumstances.

    Whether you're buying your first home, your next home or even an investment home, we have a range of options and home loan calculators that can help you along the way.

    To find out how to apply for a home loan, you can request an appointment online or call us on 13 25 77 to speak with one of our home loan specialists. Alternatively, one of our mobile lenders can come to you to help get you started.

  • Where can I find a mortgage calculator?

    You can use our Loan and Repayment Calculators to work out how much you can borrow, what your repayments will be and even compare loan options. Go to calculators.

  • What is the maximum interest only period for a home loan?

    The maximum fixed rate period for a home loan at P&N Bank is 5 years.

  • What is a mortgage?

    Home loans are often also referred to as mortgages. A mortgage refers to the legal contract that usually accompanies a home loan in that the bank takes security over your property and holds the property title. If you default on repayments as set out in the contract, (i.e. fail to make your minimum monthly repayments) your lender can sell the property to recoup costs.

  • What is an investment loan?

    An investment loan works like a standard home loan except that the property is not occupied by the borrower themselves. Instead, the borrower purchases the property to generate a passive income by reselling it, renting it to tenants, or both.

  • What’s the difference between principal and interest repayments and interest only repayments?

    Principal and interest repayments mean that your mortgage repayments are split between paying off the principal amount you borrowed, and the interest owed.

    On the other hand, interest only loan repayments mean that 100% of your repayments are going towards paying off the interest on your mortgage and no debt reduction during the interest only period. Interest only repayments go on for a set period before the loan will automatically change to principal and interest repayments.

    Interest only repayments allow you to pay down your interest owed quickly and enjoy a lower monthly repayment for the first few years after buying the property. For your first investment property, interest only repayments may give you the breathing room you need to get tenants or start working on renovations to your future investment property.

  • Is it difficult to get an investment property loan?

    Whether or not investment property loans are harder to get than home loans for owner-occupiers depends on the buyer’s financial situation. Generally, loans for a property investment have tougher lending criteria because they carry more risk.

    For example, if the buyer is planning to rely on rental income to honour their repayments, there is the risk that they won’t be able to find or keep tenants. This is why for some investment loans, buyers are required to provide evidence of their prior success owning an investment property.

  • Can I use the equity in my current home to buy an investment property?

    Yes, it may be possible to use the existing equity you have accumulated in your home to finance an investment property. Contact us to discuss how much equity you can leverage when applying for one of our investment loans.

  • Is it a good idea to buy an investment property?

    Buying an investment property can be a great way to set up a passive income for yourself, either by renting it to tenants or strategically selling it for a higher price at a later time. As with any financial product, there is always a trade-off, and property investors need to carefully consider their options and have a solid investment strategy.

    For example, a popular strategy for property investors is to purchase a property they predict will increase in value over time, either due to outside factors like nearby infrastructure development or because they will invest in renovations. They may then be able to sell the property for a much higher price than they bought it for later on, giving them a significant return on investment.

    It’s always a good idea to seek professional advice from a property investment consultant to weigh up your options and reduce your risk.

  • How much can I borrow with a home loan?

    When you want to get a home loan, our lenders will calculate how much you can borrow (borrowing power) based on your salary and regular monthly expenses. The more money you have leftover after your regular expenses, like food, utilities, rates and insurance, the higher your borrowing power will be.

    Use our borrowing power calculator to get an estimate of how much you could borrow and what your loan repayments would be for a home loan.

  • How big of a deposit do I need to get a home loan?

    If you’re buying your first home, with P&N Bank you could borrow with a loan to value ratio of up to 95%. At minimum a 5% deposit is required including settlement fees and Lenders Mortgage Insurance (LMI) fees. LMI fees will apply if you don’t have a 20% deposit plus settlement fees.

    You may qualify to take out (LMI) for deposits less than 20% of the property value. Alternatively, the Governments First Home Loan Deposit Scheme is available to help new borrowers get into their first homes with deposits from 5% of the property value for qualifying applicants.

  • What’s the difference between variable and fixed rate home loans?

    With home loans, interest rates can be variable or fixed. A variable interest rate can change at any time and is typically adjusted in response to external market factors (like the RBA changing the official cash rate). In contrast, a fixed interest rate stays the same during the fixed rate period of the loan, giving you certainty as to what your repayments will be during that time.

    Variable and fixed rate loans come packaged with different features like redraw facilities and offset accounts that are worth considering when choosing between the two options.

  • How are my principal and interest repayments calculated?

    On a standard principal and interest loan, your repayments are calculated based on your loan term, amount borrowed, and your fixed or variable interest rate. To estimate what your repayments will look like for one of our loans, use our home loan repayment calculator.

  • Why do investors prefer investment loans with an interest only period?

    Buying a property and renovating it so that it's worth more later and/or renting it out to tenants is a common investment strategy that people use investment loans for. After purchasing a property, the initial stages of renovation or finding tenants mean that the property may not generate returns straight away. Starting off by making interest only repayments helps with budgeting until the property starts to pay for itself. Interest repayments on an investment property are also tax-deductible, so the investor can minimise expenses on the property.

  • How does an offset account work with an investment loan?

    An offset account is a bank account linked to your loan. The money in your offset account reduces the interest you need to pay. For example, if you had a loan of $500,000 with $50,000 in your offset account, you would only be charged interest on $450,000, reducing your loan repayments and helping you pay off the debt faster.

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