It’s an easy thing to assume that you’ll need to start repaying your loan once it’s been approved or straight after you’ve handed over your deposit and signed the contract for your new property. Don’t panic as this isn’t the way it works, which is good news for you – especially if you want to get your finances in slightly better shape after paying your deposit.
The first repayment won’t be due until approximately one month after the settlement date as up until this point, the title hasn’t been transferred to you and the legalities haven’t been finalised between both parties. This officially takes place at settlement, and your lender will register a mortgage against the title which stays in place until you pay it off. Your lender will also provide the funds to purchase the property.
Repayment due dates can vary though, depending on the lender whether your loan is set up with principal and interest or interest-only repayments. Repayments on a principal and interest loan commence either weekly, fortnightly or monthly after settlement. Interest-only loans are typically paid monthly. Our lending team would always make this clear for you.
So don’t stress – you’re mortgage free until after your property has settled!