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If you’re new to Well Home Loans or looking for a more personal online home loan, our guide will help you learn more about our home loans and their amazing features.
Already have a Well Home Loan?
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Well is a new kind of online lender, dedicated to making the home loan process as effortless as possible. We’re helping customers to have the best of both worlds; Australian based home loan experts who focus on customer service, conveniently available online or on the phone. Combined with our super low rates, we’re on a mission to provide the best home loan experience possible, saving you both time and money.
With a leadership team that has over 40 years of experience in the mortgage industry, Well provides our customers with an online experience that’s as personal as it gets.
Read more about us and our experience here
We’re not a broker, we’re an online mortgage provider.
What’s the difference?
A broker will (amongst other things) help you to get a home loan with a lender. From there, your relationship is actually with the lender directly for your home loan (A good broker will always be with you though. If they’re not, find a better broker!).
With a Well home loan, you’re with us for the life of your loan. If you need any help at all in managing your loan; wether that’s changing payments, setting up a new bank account for your direct debits or even just a simple question on how to get your internet banking sorted, Well is there with you for the entire end to end experience.
Are we a Bank? No, Well Home Loans isn’t a bank. We aren’t an Authorised Deposit taking Institution (or ADI) and we aren’t licenced to take any deposits. So the money we lend out has to come from elsewhere.
We do partner with some banks and some non-banks to help deliver the home loans that we have on offer. To provide our products, we partner with like minded organisations that strive to put their customers first.
Where we feel it’s important to have our funding providing by banks is when we identify an important feature for customers. Take a look at our offset account on the award winning Well Balanced home loan. With such a low rate, it’s our most popular product and provides the ability to have a 100% offset account. We take it further and you can have a 100% offset account on your Fixed Rate loan too (not many others can provide that!)
As the offset account is provided by a bank (an ADI and more specifically, Bendigo and Adelaide Bank Ltd), the money that’s in the offset account is fully protected in the event that anything happens to Well Home Loans. It’s setup as a seperate bank account, not a “sub-account” of your home loan like most non-ADI lenders.
So you get “bank” features, but with the service that you’d expect from a family owned business like Well Home Loans.
All loan approval notifications expire after 90 days.
Yes. It is a condition of your mortgage that you have a general insurance policy which names the lender as an insured.
The general insurance policy should insure the property for fire, storm and other hazards that may impair the value of the property.
The insurance will need to be for full replacement cost and with an insurer approved by the lender. The premium for the first year must be paid at or prior to settlement.
In the past, we’ve always made sure that we can help to service our customers by sticking to our mission of providing the absolute lowest interest rate that we possibly can. Here’s a nice graph that shows you how the interest rates on our Well Balanced product have moved. As you can see from the information, this is the rate that we’re able to pass on to existing customers.
Working out the interest rate on your home loan is actually pretty important. Unfortunately there’s a lot of people with a mortgage that don’t even know what interest rate actually applies to them!
By not being properly informed, you could be missing out on some great savings. Knowing your rate let’s you spot a good rate when you see it.
How is the interest rate calculated?
To find out how your rate is calculated, you will need to check your home loan contract. It’s in there! Normally this is determined by the lender, but most lenders will calculate interest daily based on the outstanding principal balance of your loan. While the calculations happen daily, you’ll only see the amount added to your loan balance at certain regular intervals (normally monthly).
What are all these different rates I see in ads?
Well, there are a few different descriptions of interest rates and the common ones that you will see include:
This rate is specified by the National Consumer Credit Protection legislation and was introduced to help consumer compare rates that they see advertised. This rate includes the regular interest payment rate and some of the costs that are incurred in the mortgage loan.
The formula is the same across every lender and is calculated on the interest rate and any other upfront or establishment fees and uses a $150,000 loan amount over a 25 year loan term and uses principal and interest repayments.
Keep this one in mind when comparing, if you see a really cheap interest rate advertised with a high comparison rate – you know there’s some fees in there that you need to be wary of.
Average Annualised Percentage Rate (AAPR)
The AAPR is another rate which could be used to compare home loans, though it’s not used as much as a Comparison Rate. This is based on the actual loan amount and how much is charged for it over a 7 year period. It doesn’t take into account government fees and service fees.
The cash rate. One that we hear about every month from the Reserve Bank of Australia (RBA). This rate is the interest rate that people in the market (mostly banks) pay to borrow money or charge to lend funds in the money market. This is a component that banks may use to set the variable interest rate of their home loans and makes up a part of the cost in them getting the money to lend to you.
After all, the money that you borrow has to come from somewhere right?
Firstly, it’s best to understand where we get the funds that we lend to our customers. We have a number of funding sources that include both Australian banks (ADI’s) and funds via our securitisation program.
Offset and ADI
For our home loan product with an offset account (I’m assuming the Well Balanced product which you can see more of here), our funds come from a wholesale channel backed by an ADI. For our customers who get this loan product, the Well Balanced product is provided by Adelaide Bank and the funds for your offset account are held by the bank.
Financial Claims Scheme
In the unlikely event that something happens to us, your home loan would be managed by another lender. With non-ADI providers, the funds may or may not be covered by the FCS – each non-bank lender is different in this regard. For Well Home Loans, we like to ensure that our customers are looked after and as such our offset product and more importantly, the funds in an offset facility, are not held by us. Having the backing of Adelaide Bank for this product means that if something did happen to Well Home Loans, your loan would simply be looked after by Adelaide Bank directly, rather than us.
When you get a home loan with us, the details of the funder are outlined on your loan contract to ensure that there’s no confusion as to your home loan product.
A principal & interest mortgage loan requires a combined payment covering both minimum principal repayment and interest payment each payment period.
However, an interest only mortgage loan allows the borrower to pay interest only (no principal repayment) for a period of time, usually up to 5 years.
When borrowing under an interest only loan, you should be aware that you will have a shorter period of time in which to repay the loan principal, and you will pay more interest over the life of the loan compared to a principal & interest mortgage loan.
You can always pay more than your minimum repayments and in most cases, it’s a good idea to do so if you’re able to.
With most home loans, you are normally paying off both the principal and the interest. Taking into account a typical home loan, the early years see most of your payments go towards paying off the interest more than the principal.
If you can pay off more than your minimum repayments, this will cut your interest bill and make the home loan shorter overall (due to paying it off sooner).
You should always check to make sure that you’re allowed to make extra repayments. Some loans don’t allow you to do it and for those that do, there might be a limit on how much you can repay. Fixed rate home loans generally don’t allow extra repayments, so make sure you check your contract first.
Another option that becomes available once you start making extra repayments is being able to pay off your loan early.
At the end of the day, making extra repayments can cut your loan by years and can save you thousands. It is really worth looking into as a little savings can go a long way!
A lot of lenders (well, all reputable ones at least) will give you the option of repaying your loan early, though there are a few things that you will need to be mindful of if this is what you’re looking to do.
Each loan usually has a fee when the loan is finished. This means that if it’s fully repaid and discharged, you might have to pay a fee. This fee is always disclosed in your loan contract and tends to represent the costs involved in wrapping up your loan. For a home loan, this isn’t a lot of money and can usually range in the $500-ish mark plus any additional legal fees.
For a more accurate amount, ALWAYS check your loan contract. You’ll find it under the section on fees and is most often called a “discharge fee”.
Additional repayments or Early Repayment of loan?
Paying more that you’re supposed on your scheduled repayments is different from paying out your loan. While it’s good practice to make additional repayments if you can do it (as you will build up a buffer) it’s not repaying your loan early.
What to be wary of?
You can get caught out with an unexpected cost of paying off your loan early depending on the type of loan that you opted for.
If you have a Fixed Rate home loan and you are looking to pay off your loan, a fee can be charged by the lender called a Fixed Rate Break Cost and it will apply to any portion of a loan that is on a Fixed Rate.
This fee can be fairly significant as it represent the loss the lender experiences when they agree to lend you the money at a fixed rate. If rates have gone up a lot, well – they might have actually lost money by lending it you.
So, make sure you read your contract before you decide to repay your loan early.
At the time your loan settles, you should get some information about how to manage your loan. This can often be login details for your online account or a pamphlet explaining who to contact when you need a bit of help.
Most lenders have a dedicated department that handles all customer inquiries after the loan settles.
For a Well Home Loan, you can find out more from our contact us page.
After more than 40 years of running businesses in the mortgage industry, we’d like to imagine that we’re going to be around for a long time. While we’ve been successful, we’ve also seen other mortgage providers shut their doors. So we’ve made plans to protect our customers if that ever happened to us.
In the unlikely event that Well would be out of business, we have multiple transition plans to help protect you and your mortgage. Each plan depends on the product that you currently have.
Well Balanced home loan (Funded by Bendigo and Adelaide Bank)
For our flagship product (a bank funded product), your loan would simply be transferred to the services of the internal team of Bendigo and Adelaide Bank. As with any mortgage, there is a loan contract in place. If you continue to make your repayments in line with the terms of that contract – then you are in a great position regardless of where Well Home Loans is. It’s safe to say – make your repayments on time and for you it will be business as usual!
Well Saver, Easy and Restore home loan (Funded by non-banks)
With our non-bank funded products, a “back-up servicer” would simply step in and continue to manage your loan instead of us. If something were to happen to the non-bank, again if you’re making your repayments on time and in line with the terms of your loan contract – then another lender would likely look to take on your loan. Anyone making on time repayments of their home loan is a good asset to a lender (you’re a source of income for them!).
In all cases, you’ll be safe knowing that the funders will continue to honour your mortgage agreement and if you keep making your mortgage repayments on time, then you’ll have a happy home loan!
It’s an extremely remote possibility, but we’ve also got plans in the event that the entity responsible for providing the money for your loan goes under.
Bendigo and Adelaide Bank (funders of the Well Balanced product)
It’s hard to imagine that a bank can go under. Especially one of the largest banks in the country.
What would happen if they did?
Well, in the past when a smaller ADI has had troubles the first step they take is to look to be aquired by another larger banking group or someone else who wants to buy their shareholdings. Every bank has good assets that include deposits and good revenue items called mortgages. This leads to profits for shareholders. Another lender will simply buy up the lender that is in trouble. It would take the near total collapse of the banking system for a bank to not have any other options, and much before that – the government steps in. It’s happened in the GFC where banks in other countries got bailed out. They didn’t disappear.
So long as you keep making your mortgage repayments on time then you’re going to have your home loan ticking along nicely on your way to home ownership!