It's not all work

mX Sydney, 15 November 2007

with Hamish Carlisle www.quickdirect.com.au

Hamish is the founder and managing director of online mortgage provider QuickDirect.

How did you get into this line of work?

Before establishing QuickDirect, I was a senior director and head of Australian banks research with Merrill Lynch Equities. I also worked with Juniper, an online bank in the United States, and before this with NAB’s in-house mergers and acquisitions team. I have always been amazed at the amount of confusion among homebuyers about mortgages, especially when it comes to confusing fine print, fees and jargon. Getting a home loan doesn’t have to be confusing or difficult.

Can you tell us what QuickDirect does?

QuickDirect is Australia’s newest online mortgage provider and is designed to save homebuyers money, time and hassle. We don’t pay broker commissions and we operate online therefore we can keep operating costs low and pass on savings to our customers

What are common mistakes first homebuyers make?

Don’t trust a lender’s interest rate at face value; consumers should investigate the ‘‘comparison rate’’ which lenders must disclose. The comparison rate is a true reflection of what you actually get charged when you consider the fees involved including application, maintenance and settlement fees. By getting a low interest rate you can end up saving thousands of dollars over the life of your home loan. That’s why it’s really important to take your time and consider this carefully.

Should young people rent or is it better to put your money into a mortgage?

Everyone’s situation is different. Generally speaking I’d strongly recommend saving a good-sized deposit before buying a home. This not only cuts down your interest payments but also avoids the cost of lenders’ mortgage insurance that can be quite significant. Further, I’d only recommend buying a home if you plan to live there for a period of five years or more as transaction costs – particularly government fees and charges – can be quite high.

What are some tips for paying off your mortgage quickly?

The first tip would be not to overcommit yourself and know how much you can realistically afford to borrow. Before taking on a new mortgage, it’s important to create a budget to work out all your expenses and commit to sticking to it. Other tips include being disciplined when it comes to redrawing your loan, and remembering you can make more than your minimum repayment, which will help pay off the loan sooner and reduce your interest costs.

What should first homebuyers avoid when signing a mortgage?

It’s important to make sure that you’re not locked into an inflexible product should your situation change. In particular, it’s nice to be able to make additional repayments to reduce your interest and then have access to those funds down the track if you need them.