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We asked customers how the EFM will assist them financially or with their lifestyle:
John* 37 years old, single, from Wynnum, QLD
"It allows me to live in a better home and secure a better investment for the future."
Tracey and Steve*, both 33, married with 1 child, from Tapping, WA
"It reduces the instalments, leaves us with more money each month. Also helps us if interest rates rise."
James and Rebecca*, both 38, married with 2 children, from Cranebrook, NSW
"By having less to pay back in interest and lower mortgage repayments per month, it gives us a little more for other things."
Jessica*, 27 years old, single, from Bray Park, QLD
"It has allowed me to have a mortgage and still have a life. A life moreover in a house with a large fenced yard for a garden and a dog and room for friends and family to stay with me when they are in Brisbane."
Mary*, 47 years of age, divorced, no dependants, from Bellbird Park QLD
“My mortgage repayments on the EFM during the term of the loan will be easier to manage.”
Michael*, 41 years of age, married
“The EFM allowed me to buy a bigger home and reduce my repayments.”
Peter and Joanne*, 23 and 21 respectively, no dependants
“The repayments will be easier and it gave us the chance to buy a bigger home.”
Sally and Dave*, 41 and 45 respectively, no dependants
“We’re now able to manage repayments and buy a larger home.”
Simon*, 59 years of age, married
“The EFM has helped me substantially due to improved cash flow around current and future needs.”
We asked what their main purpose for taking out an EFM:
John* 37 years old, single, from Wynnum, QLD
"To buy an affordable house."
Tracey and Steve*, both 33, married with 1 child, from Tapping, WA
"Helps us to comfortably make the repayments."
James and Rebecca*, both 38, married with 2 children, from Cranebrook, NSW
"To reduce our repayments so that we can save some money."
Jessica*, 27 years old, single, from Bray Park, QLD
"The commitment to purchase and pay off 95% of the price of a home alone restricted me to buying a unit which I did not want. The EFM has allowed me to buy a 3 bedroom home which would have been impossible without their 20% input with no interest and no repayments. It is my belief that aside from my preference for a home rather than a unit the price of the home is more likely to increase at a faster rate than a unit on the outskirts of Brisbane (again what I could afford alone)."
Mary*, 47 years of age, divorced, no dependants, from Bellbird Park QLD
“To purchase a property as I was previously renting.”
Michael*, 41 years of age, married
“It enabled me to free up income that I could then use for investment purposes.”
Peter and Joanne*, 23 and 21 respectively, no dependants
“To buy our first home.”
Sally and Dave*, 41 and 45 respectively, no dependants
“The EFM allowed us to refinance our previous property, use that as an investment property and buy a second larger home to live in.”
Simon*, 59 years of age, married
“To improve cash flow now and at retirement.”
We also asked why our customers chose an EFM over other available mortgage products:
Tracey and Steve*, both 33, married with 1 child, from Tapping, WA
"This was the best option to reduce instalments."
James and Rebecca*, both 38, married with 2 children, from Cranebrook, NSW
"To use our house as equity and to reduce our repayments."
Jessica*, 27 years old, single, from Bray Park, QLD
"Purely because it enabled me to purchase the type of property I wanted rather than either no property at all or a small unit. The 20% input has reduced my payments to a reasonable level as well as increasing my purchasing capacity."
Mary*, 47 years of age, divorced, no dependants, from Bellbird Park QLD
“The EFM was the most suitable for me and made repayments easier.”
Michael*, 41 years of age, married
“Adelaide Bank was the only one offering this service.”
Peter and Joanne*, 23 and 21 respectively, no dependants
“We thought it was the best product available and it allowed us to get into the market.”
Sally and Dave*, 41 and 45 respectively, no dependants
“EFM was the most attractive product out there.”
Simon*, 59 years of age, married
“The EFM was the most suitable, in fact the only product available to suit our needs.”
The features of the EFM held great appeal to borrowers:
Tracey and Steve*, both 33, married with 1 child, from Tapping, WA
"The overall concept of the EFM loan appealed to us."
James and Rebecca*, both 38, married with 2 children, from Cranebrook, NSW
"By using our house to offset our mortgage repayment."
Jessica*, 27 years old, single, from Bray Park, QLD
"I was pleased that if I spent money on this property these costs may be deleted from the capital gains prior to splitting the profits upon the sale of the property."
Michael*, 41 years of age, married
“Ability to buy a bigger home and reduce repayments.”
Peter and Joanne*, 23 and 21 respectively, no dependants
“Easier repayments.”
Sally and Dave*, 41 and 45 respectively, no dependants
“The opportunity to move into a bigger property.”
Simon*, 59 years of age, married
“No repayments on the EFM during the term of the loan.”
Several of our borrowers have been quoted in the media on why they took out an EFM:
Liverpool Champion, 20 June 2007
Sydney single parent Jane Grey* felt home ownership was moving further out of her reach and wanted to act. Unimpressed by the restrictions of traditional loans, she researched financing options hoping to break free of the rental market. "I've looked at over 100 places in the last two years hoping to buy a comfortable home for my family," she said. "I was able to borrow enough for a two bedroom unit in Sydney but with two teenage children in high school, I needed to purchase a larger unit to accommodate all of us.
Buying a three bedroom unit was out of my reach because the repayments would've competed with my school children's school fees and family expenses." She saw a newspaper add about EFMs and called her broker to discuss. "Securing the EFM was relatively easy. My broker arranged for the loan to be processed immediately after I bought by property at auction," she said. "The EFM was by far the best solution. It let me get out of the rental market, buy the property I wanted and give my family the stability of living in our own home."
The Australian Newspaper, 24 March 2007
Physiotherapist Susan Smythe*, 35, and her partner Richard*, 34, an engineer, are among the first borrowers to use the Adelaide Bank/Rismark Equity Finance Mortgage (EFM) launched last week. In the six years since they returned to Australia, the pair have worked in Adelaide, Perth and now Melbourne, where they have been for a year. "We are new to Melbourne, and we don't really know the suburbs, but we knew that we wanted to live close to town for lifestyle reasons," she says. "Obviously, houses of this kind are expensive." Smythe says that using an EFM mortgage means they can borrow more than they otherwise could, and have the best of both worlds. "We now have a budget of $400,000 to $420,000, whereas before we were looking at around $350,000 maximum. "This gives us a presence in a suburb we really like, that we know has good capital-growth prospects and will make us money, so we get a good return on our investment." The couple are looking for an apartment in South Yarra or, by adding some extra funds, a house in Prahan. "We went to put an offer on a place last week, but it had already gone, so we will have to keep looking," she says.
Sharing the capital gain with the lender is not an issue, because the couple have a strategy in place. "We don't mind at all sharing the capital gains with the lender. "We might if it was a 25-year mortgage but we think over 10 years you are not going to give away too much. That is, you are not going to cry when you give it away." Smythe says they will review the situation again if their circumstances change -- "for instance, if we had children or needed to move again". Their house in Adelaide will now become an investment property. It is not possible to use an EFM to finance an investment property. It must be used for an owner-occupied home. "Instead of having to sell it, we can keep the Adelaide property as an investment property and use negative gearing to reduce our high incomes," she says.
* Please note that customers' names have been changed to protect their privacy
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Copyright 2008 Rismark International. All rights reserved. Fees, charges, terms, conditions and lending criteria apply. Full details are available on application. 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) ('Rismark', 'we', 'us' or 'our'). EFM loans are offered in conjunction with certain traditional home loans offered by approved lenders and their originators. Rismark has appointed Adelaide Bank a division of Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFS licence number 237879 ('Adelaide Bank') as an approved lender Adelaide Bank and its originators ('Adelaide Bank originators') will distribute and manage EFM loans. Rismark has consented to Adelaide Bank and Adelaide Bank originators branding EFM loans as Adelaide Bank or Adelaide Bank originator-branded EFM loans. Rismark may over time also appoint other financial institutions to distribute and manage EFM loans. Rismark has appointed Permanent Custodians Limited ACN 001 426 384 ('Permanent') as lender of record, custodian and mortgagee for Rismark. This means Permanent will enter into the EFM loan contract and Mortgage on behalf of Rismark.(R) Equity Finance Mortgage (EFM) and EFM are registered trade marks of ARES Capital Management Pty Limited ABN 93 113 861 046. TM Equity Finance Mortgage is a pending trade mark of ARES Capital Management Pty Limited ABN 93 113 861 046. ARES Capital Management Pty Limited's ABN 93 113 861 046 intellectual property relating to the EFM product is protected by Australian Innovation Patent Numbers 2005100 871, 2005100 869, 2005100 868, 2005100 867, 2005100 865, 2005100 864, 2007100 445, and 2007100 448.
