While we can't yet travel overseas, REA Group's new financial passport could help home buyers understand their borrowing capacity.
As housing affordability issues rise and APRA's new rule potentially reduces the average Joe's borrowing power, it's important that first home buyers and home owners alike wrap their heads around how much they can actually borrow.
Recently, REA Group announced its partnership with open banking fintech Frollo to provide its users the ability to generate a 'Financial Passport', to help people understand their borrowing power.
Aiming to provide users with financial insight early on in the home buying process, this tool allows buyers to get a 'real-time', 'accurate' and 'complete' grasp on their finances.
This free tool allows users to fully understand their income and expenses, and is set to make the home loan application process easier.
How does the Financial Passport work?
Frollo's Financial Passport is powered by open banking, and it works in three easy steps:
- The user connects their accounts using open banking or screen scraping;
- Frollo's AI tool collects and categorises data based on lending criteria;
- The user receives an 'in depth' financial profile detailing income, expenses, assets, and liabilities.
Once the report has been generated, it can be downloaded as a PDF.
Source: Frollo
Why is a Financial Passport useful?
realestate.com.au is Australia's largest property finding platform, and the Financial Passport tool will allow buyers to understand their borrowing capacity early on in the buying journey.
This way, they can specifically search for properties within an affordable price range by knowing exactly where they stand financially.
Eloise Wall, REA Group General Manager, Digital Product & Innovation, said integrating the financial passport allows REA Group to continue their mission of changing how people experience property.
"Tools like Frollo’s financial passport can help consumers understand their income and expenses and we’re confident that in the near future, these types of innovative open banking experiences will make the home loan application process easier," Ms Wall told Savings.com.au.
Ms Wall also said that it's important for first home buyers to have a solid grasp on their spending patterns and financial position before applying for a home loan.
"Lenders will use this information to determine their borrowing power," she said.
"Frollo’s Financial Passport gives buyers an easy way to access a complete and accurate picture of their finances."
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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
Lender | Advertised rate | Comparison rate | Monthly repayment | Rate Type | Offset | Redraw | Ongoing Fee | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Pre-approval | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Variable | More details | ||||||||||||
| FEATUREDLIMITED TIME OFFER | Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)
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Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)
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| Variable | More details | ||||||||||||
| FEATURED100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES | Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)
| ||||||||||||
Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)
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| Variable | More details | ||||||||||||
| FEATUREDREFINANCE IN MINUTES, NOT WEEKS | Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)
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Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)
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| Variable | More details | ||||||||||||
| FEATUREDYOU COULD WIN $100k TO PAY DOWN YOUR LOAN* | Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)
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Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)
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| Variable | More details | ||||||||||||
| FEATUREDAN EASY ONLINE APPLICATION | Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)
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Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)
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- Fast turnaround times, can meet 30-day settlement
- For purchase and refinance, min 20% deposit
- No ongoing or monthly fees, add offset for 0.10%
Rates correct as of October 23, 2021. View disclaimer.
Image by Convert Kit on Unsplash
