• Home loan terms and mortgage definitions

  • Portability

    A feature that enables a home loan to be transferred from one property to another, without refinancing. It can be of benefit by savings on loan set-up fees and government loan security duty.

    While many home loans are established with loan terms of 25 or 30 years, homeowners’ needs can change well before the end of the loan term. For example, they may decide to move house. Whether the objective is to move to a new location, upgrade to a bigger or more expensive home, or even downsize to a smaller home or apartment, the costs involved in such a move can be substantial. Some lenders offer a “portability” feature on their home loans. Portability is designed to minimise the mortgage-related costs involved in selling an existing home and buying a new home. A portability feature allows you to transfer your current home loan from one house to another, without the need to cancel and apply for a new loan.

    Cost savings

    Moving your home loan from one property to another – by using your new home as security in place of your existing home – can save you a lot of money. While you may be liable for additional fees, including where the value of your new home is higher than your old one, depending on the circumstances, it can still be cheaper than the alternative. Paying out your existing home loan and establishing a brand new loan can be expensive. There are establishment fees to consider, such as application and valuation fees, government charges and potential exit fees. Early repayment fees (if applicable), can be significant.  

    Time savings

    Keeping the same loan can also save you time and trouble, as the paperwork involved in setting up a new loan (application forms, etc) may not be required.  

    Other Considerations

    Bear in mind that simultaneous settlement of the sale of your old home and the purchase of you new home may be required. In addition, generally you can't change the actual loan structure when moving the loan, such as the borrowers’ names or the number of borrowers on the loan.

    If you’re applying for your first home loan, portability is an important option to consider, particularly if you’re considering a fixed rate loan. If portability is not available, it could be difficult and expensive exercise to change your home if you’re still within the fixed rate term.

    If your home loan has a portability feature then this option remains open to you.  

    RAMS portability

    All RAMS home loans are portable when simultaneous settlement of sale and purchase occurs. To find out more, contact a RAMS Home Loan Specialist. Fees, conditions, limitations and lending criteria apply. This information is of a general nature only and is not to be relied upon as being appropriate or suitable for your particular circumstances.