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Using an Zero20 in conjunction with a traditional home loan, you can reduce your monthly loan repayments by up to 20% or more! The following example explains how... |
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| A current home owner, Belinda, has already purchased a home and has a traditional home loan for $400,000. She is happy with her house, but would like to be able to afford such things as a private school education for her children or an occasional holiday. |
| By refinancing her traditional home loan and including an Zero20, Belinda can reduce her monthly repayments without extending the term of her loan and free up funds to do these things (subject to credit approval by an acceptable traditional home loan lender). Here's how: |
| Traditional home loan only |
| Property value: |
$400,000 |
| Traditional home loan (95% of property value): |
$380,000 |
| Lenders Mortgage Insurance premium: |
$7,471 |
| Monthly repayments: |
$2,883 |
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| Adding an Zero20 loan to reduce your regular repayments |
| Property value: |
$400,000 |
| Zero20 (20% of property value): |
$80,000 |
| Traditional home loan (75% of property value): |
$300,000 |
| Lenders Mortgage Insurance premium: |
$4,652 |
| Monthly repayments: |
$2,276 |
| Using an Zero20 may reduce your monthly repayments by up to 20% or more |
| Note: This example excludes application fees and other fees associated with the loans such as valuation fees, account keeping fees, transaction fees and lenders mortgage insurance (if applicable) as well as transaction costs associated with refinancing a home loan such as stamp duty, government fees, conveyancing fees and stamp duty on lenders mortgage insurance. The example assumes that the Zero20 loan is for 20% of the property's value at the outset and that no default interest is payable at any time over the term of the Zero20 loan. The actual Zero20 loan may be for less than 20% of the property's value and the outcomes may vary considerably if default interest becomes payable. The example assumes that the traditional home loan interest rate is 7.80% p.a, the loan term is 25 years, all principal and interest payments are made on time, the only repayments made are the required repayments - that is, no additional repayments or redraws are made, and no event of default has occurred and default interest is not incurred at any time during the term of the loan. Please note that these assumptions may not apply in your circumstances. Interest rates available on a traditional home loan may be lower than the interest rate on a traditional loan taken in conjunction with an Zero20. Ask your lender to compare these costs for you, while taking your circumstances into consideration. |
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The illustration above shows that by using an Zero20, Belinda can reduce her monthly home loan repayments by $607 per month!
For any additional assumptions used in calculating this example please refer to the assumptions page.
We strongly recommend that you obtain independent legal and financial advice in relation to this Zero20 loan prior to entering into the Zero20 loan contract. |
Please carefully read and review the Zero20 Disclosure Document. This website does not take into account your personal objectives, financial situation, or particular needs. You should obtain a copy of the Zero20 Disclosure Document and the Zero20 Terms and Conditions Booklet and consider them before making a decision about whether to enter into a Zero20 Home Loan.
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