When applying for a home loan, the lender has a buffer they put in place to ensure you can still make repayments if the interest rates were to increase. This is called the benchmark rate, sometimes its 2.5% above the actual interest rate, sometimes it’s a set rate, no matter the product you choose.

Different lenders have different benchmark rates, which means different lenders will allow you to borrow more or less based on their benchmark rate. Obviously, the lower the benchmark rate, the more you can borrow and vice versa.

But it is also important for you to understand how an interest rate increase could impact your repayments and cashflow, especially if it’s your first time you are entering into a mortgage. Even though we can mitigate this risks with fixed rates etc, most people tend to stay on a variable rate.

Here is our process