By using an EFM in conjunction with a traditional home loan, you can significantly reduce the upfront and ongoing costs of purchasing a new property (subject to all the necessary credit approvals, etc). The example below shows how...

Jack and Adrian want to purchase a home for $400,000.

They have a $20,000 deposit and sufficient additional funds to meet most of the costs associated with the purchase, such as stamp duty on the transfer and conveyancing costs.

They could borrow $360,000 using a traditional home loan which would require them to repay $2,948 per month in regular home loan repayments or they could take advantage of an EFM to reduce their monthly repayments. Here is how an EFM could work for them:

Traditional home loan only

Property value:  
$400,000
Deposit:  
$40,000
Loan needed:  
$360,000
Traditional home loan (90% of property value):  
$360,000
Lenders Mortgage Insurance premium:  
$5,400
Monthly repayments required:  
$2,948



Adding an EFM to make purchasing a home affordable

Property value:  
$400,000
Deposit:  
$40,000
Loan needed:  
$360,000
EFM (20% of property value):  
$80,000
Traditional home loan (70% of property value):  
$280,000
Lenders Mortgage Insurance premium:  
$3,560
Monthly repayments required:  
$2,293


Adding an EFM reduces the repayments required on a traditional home loan by up to 20%.

The illustration above shows that by using an EFM in conjunction with a traditional home loan , Jack and Adrian have made their purchase more affordable by reducing:

As we explained earlier, instead of charging a regular interest rate on the EFM, the lender is entitled to share in a minority of the capital gains on your property, as determined when you choose to repay the EFM.

Note: This example excludes application fees and other fees such as valuation fees, account keeping fees, transaction fees and lenders mortgage insurance (if applicable) as well as transaction costs associated with refinancing a home loan such as stamp duty, government fees, conveyancing fees and stamp duty on lenders mortgage insurance. For any additional assumptions used in calculating this example please refer to the assumptions page.

We strongly recommend that you obtain independent legal and financial advice in relation to this EFM loan prior to entering into the EFM loan contract.

Please carefully read and review the EFM Disclosure Document available on this website. This website does not take into account your personal objectives, financial situation, or particular needs. You should obtain a copy of the EFM Disclosure Document (available on this website) and the EFM Terms and Conditions Booklet from Iden Group and consider them before making a decision about whether to enter into an EFM.

EFM Disclaimer:
Fees, charges, terms, conditions and lending criteria apply. Full details are available on application. Iden Group Pty Ltd ACN 095 728 877. EFM loans have been developed by and will be provided by Rismark International Funds Management Ltd ABN 15 114 530 139 AFS licence number 293881 (trading as Rismark International) ® Equity Finance Mortgage (EFM) and EFM are registered trade marks of ARES Capital Management Pty Limited ABN 93 113 861 046.