Pre-approval, a refinance and a rate locked in before the next rise.

The clients were a couple with two young children, both PAYG employees. They had done what a lot of Eastern Suburbs families do. They bought an investment property in Randwick first, then kept renting nearby while the property did its work. With the kids getting older, they wanted a place of their own to live in.

Two things needed to happen, and they needed to happen together. They needed pre-approval so they could bid with confidence, and they needed their monthly position to be more comfortable before they took on a second mortgage on a single household budget.

The existing investment loan was the constraint. It had been sitting with the same lender since the purchase, on a rate that was no longer competitive, and its repayment was being counted in full against their borrowing capacity. Every dollar of that repayment was a dollar they could not put towards the home they actually wanted to live in.

Rates were also rising at the time. That created a second problem. A fixed rate quoted at application can move before settlement, and on a purchase that had not even happened yet, the gap between the two could be significant.

Shane refinanced the Randwick investment loan to a sharper rate first, which reduced the repayment and freed up monthly cashflow. That improved position then fed directly into the pre-approval assessment for the new purchase.

With pre-approval in place, they went to market knowing their number. They found an apartment in Kensington, close to schools and a short drive from the investment property, and their offer was accepted.

On the new owner-occupied loan Shane fixed the rate for two years and applied the lender's rate lock at application, with the fee deducted from the loan proceeds at settlement rather than paid up front. That held the quoted rate through to settlement, so the rate on the loan documents was the rate he had shown them at the start, not whatever the lender was offering weeks later.