When you submit your application, the total loan amount is not finalised. This means that if you wish to reduce your loan amount, you may be able to do so before you sign your loan contract. One of our lending specialists will discuss your application with you and will be able adjust your final loan amount.
If there is a difference in amount between your current loan balance (with your current lender) and your new refinance amount with us, you need to have this amount ready to cover the shortfall on the day of settlement.
For example, if your current loan balance is $250,000 and your new refinance amount is $240,000, you’ll need to cover the shortfall of $10,000. Learn more about shortfall here.
This means that currently you’re unable to reduce your minimum monthly repayment by making a lump sum payment to reduce your loan amount. If you wish to make a lump sum payment, you could perform this prior to applying with us.
Here are some ways to reduce your loan amount:
1. Use your redraw balance to make a principal payment
Your redraw amount is separate to your principal balance. If you have an amount in your redraw, you can use it to make a principal repayment towards your OFI loan balance prior to settlement. You can let us know if you intend to keep or use your redraw balance with us or if you will use all or some of it as a principal repayment with your current OFI loan. Learn more about redraw here.
2. Make a savings contribution
Once you’ve determined a savings contribution, you can nominate the amount you would like to pay via your bank account, you can either:
Pay your current lender to reduce the balance of settlement. Please note that this must be done prior to discharge and/or applying with Unloan or
Have the savings contribution amount ready to transfer on the day of settlement for this to go towards your principal reduction in your loan amount, rather than an amount that will go towards your available redraw
If you need to reduce your loan amount prior to submitting your application, please follow this step-by-step guide.
This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.
Unloan is a division of Commonwealth Bank of Australia.
Applications are subject to credit approval, satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000, and total borrowings per customer across all Unloan loans is $10,000,000. (For purchase loans a minimum 10% equity is required - however a Lenders Mortgage Insurance (LMI) premium and higher interest rate apply. In some cases, depending on the property’s location or type, an LMI premium may also be required for LVR between 70.01% to 80%). For loans with Lenders Mortgage Insurance (LMI) the minimum loan amount is $10,000, maximum loan amount is $3,000,000 and total borrowings per customer across all Unloan loans is limited to $3,000,000).
Unloan offers a 0.01% per annum discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.
*At Unloan, we do not charge any annual, application, banking, account, transaction, late or exit fees. In certain circumstances you may be required to pay a Lenders Mortgage Insurance (LMI) premium. Learn more about why this is applied and how it works. Government fees may also apply. Learn more about government fees here. Your current lender may charge an exit fee when refinancing.