Equity Finance Mortgages (EFM)

What it is…

An equity finance mortgage provides up to 20% of the value of an owner occupied property. No annual percentage rate applies to the loan unless the borrower is in default and no monthly repayments are required throughout the term of the loan.

When taken in conjunction with an Adelaide Bank balanced home loan, an EFM can be used to:

reduce the upfront and ongoing costs of home ownership

allow borrowers to purchase a more expensive property

Purpose…

Restricted to standard residential loan purposes such as purchase or refinance of an owner-occupied property only, including debt consolidation. The EFM product is limited to UCCC regulated loans only.

Loan type…

EFMs are only available in conjunction with:

balanced variable rate term loans

balanced variable rate line of credit

100% offset

principal and interest repayments only

Not available with:
interest only repayments

standard fixed, introductory fixed and discount variable rates

Lo Doc loans

EFM loan percentages…

Must be 10%, 15% or 20% of the initial value. The initial value is the lesser of the purchase price or the valuation amount.

Minimum loan amount…

EFM: $15,000
The EFM loan amount must be equal to/or greater than Adelaide Bank loan amount.

Maximum loan amount…

$400,000 where total borrowings are equal to/or greater than 85% LVR.
$210,000 where total borrowings are less than 85% LVR.

Maximum property value…

Up to $4,000,000 – maximum property values vary depending on security locations and LVR.

Loan term…

25 years

Interest rate options…

Interest is not charged (except where payment default occurs – refer to the defaults section). Instead, customers share any increase in the value of the property when the EFM is repaid.

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