Schedule 1 Amendments

(regulation 3)

[1] Regulation 26, after definition of disclosure document

insert

interest rate means the interest rate or rates applicable to:

(a) a type of home loan; or

(b) a home loan chosen by a consumer.

Note For the characteristics of a home loan that is a standard form of credit contract, see regulation 28LA.

lender means a person or entity who:

(a) may determine the pricing of a standard home loan; and

(b) produces the Key Facts Sheet for that home loan.

[2] After regulation 28L

insert

28LA Standard home loans

For subsection 133AA (2) of the Act, a standard form of credit contract is a contract for a home loan that:

(a) is described in the table; and

(b) obliges the consumer to make repayments that repay principal and interest for the full term of the home loan.

Item	Type of loan	Characteristics
1	Variable rate home loan	The interest rate on the entire loan balance may vary at the lender’s discretion
2	Fixed rate home loan	The interest rate on the entire loan balance is fixed for the whole or part of the loan

28LB Key Facts Sheets

(1) For section 133AB of the Act, Schedule 5 sets out:

(a) the Key Facts Sheet for a standard home loan; and

(b) requirements for how the information in a Key Facts Sheet is to be prepared for a particular consumer and loan.

(2) A Key Facts Sheet that is given to a consumer or published online must meet the following requirements:

(a) the Key Facts Sheet must be in A4 size;

(b) all text in the Key Facts Sheet must be black on a white background, unless otherwise specified in this regulation;

(d) the headings to all boxes must be white on a blue background;

(e) all other headings must be blue on a white background.

(3) However, if a lender is not able to print the Key Facts Sheet using a colour printer, the lender may print a Key Facts Sheet in black and white.

[3] After Schedule 4

insert

Schedule 5 Key Facts Sheets

(regulation 28LB)

Part 1 Model of Key Facts Sheets

This Key Facts Sheet is an Australian Government requirement under the National Consumer Credit Protection Act 2009

KEY FACTS ABOUT THIS HOME LOAN

Date produced: [date]

[lender logo]

Australian credit licence number: [lender’s ACL number] 1

THIS IS NOT AN OFFER OF CREDIT. This Key Facts Sheet is provided to help you compare this home loan with the home loans of other lenders.

What you have told us

Loan Amount:

Term of the home loan:

Interest type:

Lender and product name:

[loan amount]

[loan term]

[fixed or variable] 2

[lender and product name]

HOW DOES THIS HOME LOAN COMPARE?

Description of this home loan
Repayment method	Principal and interest 3
Repayment frequency	Monthly (other repayment options are available) 4
Interest rate	5 [variable interest rate] per annum [fixed interest rate] per annum fixed for [number] years, then a variable rate currently [variable interest rate] per annum [variable interest rate] per annum for [number] years, then [discount interest rate] per annum [introductory interest rate] per annum for [number] years, then a variable rate currently [variable interest rate] per annum
Personalised comparison rate: (interest rate including fees)	[Personalised comparison rate] per annum 6

Estimated cost of this home loan
Total amount to be paid back (including the loan amount and fees)	[repaid amount] 7
This means you will pay back	[amount] for every $1 borrowed 8
Establishment fees	[establishment fees] 9
Ongoing fees	[monthly fees] 11 per month [annual fees] 12 per year
10 Repayment per month (including ongoing fees)	[monthly repayment] 13
10 Repayment per year (including ongoing fees)	[yearly repayment] 14
10 Repayment per month for first [number] 15 years (including ongoing fees)	[monthly repayment] 13
10 Repayment per year for first [number] 15 years (including ongoing fees)	[yearly repayment] 14
10 Repayment per month after [number] 15 years (including ongoing fees)	[monthly repayment] 13
10 Repayment per year after [number] 15 years (including ongoing fees)	[yearly repayment] 14

There may be circumstances in which other fees are payable. Fees applicable for the loan you apply for will be shown in the loan contract. You can also obtain a list of fees applicable to this type of loan from our branches 16 or through our website at [lender’s website].

Other loan set-up fees, such as valuation fees and lender’s mortgage insurance, and Government charges, such as registration fees and stamp duty on property transfer, have not been included. These will be determined after application.

Additional fees may be payable if you choose to repay your fixed rate home loan early. 17

18 What happens at the end of the fixed rate period?

At the end of the fixed rate period you may be able to fix the rate at a new fixed interest rate for a further period. If a further fixed rate is not entered into, the rate will convert to the applicable variable interest rate. Under the current variable interest rate, if interest rates do not change, your monthly repayment would [increase/decrease] by around [change in repayment]

18 What happens if interest rates increase?

This is a variable rate loan. If your interest rate was to increase by 1% per annum, your monthly repayment would increase by around [change in repayment 2]. 19

This is a fixed rate loan. Your repayments will not change during the fixed rate period. After the fixed rate period, if the variable interest rate was to increase by 1% per annum, from the current variable interest rate of [variable interest rate], your monthly repayment would increase by around [change in repayment]. 18

How can I repay my loan faster?

This loan allows you to make additional repayments to pay off your home loan faster. If you increased your monthly repayments by $200 a month to [monthly repayment + $200] you would repay the loan in [new loan term], instead of [loan term], based on the current variable interest rate stated in this Key Facts Sheet. 19

This loan allows you to make additional repayments to pay off your loan faster but such repayments may attract a fee. You should ask your lender about the fee before making additional repayments. 19

This loan does not allow you to make additional repayments to pay off your home loan faster. 19

Altering the frequency of repayments may also help repay the loan faster.

How to find the best deal for you

To obtain the best deal for you, it is important to shop around and compare interest rates, fees and features before you apply for a home loan. Choosing the best home loan for you may save you money. For more information about how to get the best deal on your home loan visit the ASIC consumer website at www.moneysmart.gov.au.

FURTHER INFORMATION ABOUT THIS KEY FACTS SHEET

Which home loan is right for you?

When choosing a home loan, it’s important to work out what you want from your loan and how much it will cost you. Given the wide range of loans on offer – with different interest rates, product features and fees – it pays to shop around to find the loan that fits your needs and circumstances. Some loans offer features that may be appropriate for your situation and result in savings over the life of the loan.

Some features you may wish to consider include:

• ability to split your loan between fixed and variable interest rates;

• ability to make extra repayments;

• an offset account;

• a redraw facility; and

• linked credit card and savings accounts.

But compare the costs and benefits of these features before you agree to them.

For more information on choosing the right home loan for you, you may also wish to visit the ASIC consumer website at www.moneysmart.gov.au.

Where can I find out more about this loan?

If you want more information on the terms used in this document or about this home loan, please contact us [lender’s contact details], or visit our website at [lender’s contact website].

This Key Facts Sheet is an Australian Government requirement.

The Australian Government requires all lenders selling standard home loans to give you a Key Facts Sheet like this one when you ask for one and provide the necessary information.

Key Facts Sheets contain information presented in the same way to help you compare and select the most appropriate home loan for you. You should request Key Facts Sheets when shopping around for a home loan to help you find the home loan that is right for you.

This Key Facts Sheet is not an offer of credit. The lender is not obliged to provide you with the home loan described in this Key Facts Sheet. You will need to apply for the loan and meet our lending criteria before we can determine whether you are eligible for this loan.

You should also be aware:

• the interest rates and fees and charges are those that apply as at the date of production of this Key Facts Sheet.

• the amount required to be paid does not include fees which are dependent on events that may not occur (for example, late payment fees if you do not make repayments on time).

• the amount of the repayments shown in this Key Facts Sheet will change if interest rates, fees and charges change and if a different loan type, loan term or loan amount is used.

What is the personalised comparison rate?

The personalised comparison rate helps you understand what the total cost of your home loan might be, taking into account known fees and charges that will apply (other than government fees, charges or duties) by building those costs into the interest rate. It also helps you understand the impact of fixed or introductory rates of interest on the total amount of interest you could pay over the life of the loan.

Part 2 Information about preparing a Key Facts Sheet

Notes in model of Key Facts Sheet

2.1 A lender that prepares a Key Facts Sheet for a particular consumer must include the following information at the numbers marked in the model in Part 1:

1 If the lender is an ACL holder – this is the lender’s ACL number. If the lender is not an ACL holder, no ACL number is required. However, the lender must disclose that the credit provider’s ACL will be provided in the credit contract. The lender is exempted from the requirement to set out its ACN or ABN in subsection 153(2) of the Corporations Act 2001 on the Key Facts Sheet.

2 This must be an interest type in the table in regulation 28LA. If a fixed loan is specified, the term of the fixed rate period must also be indicated.

3 Under regulation 28LA, the repayments under the home loan must repay principal and interest for the full term of the loan.

4 The repayment frequency must be based on monthly repayments.

5 This is the current interest rate applicable to the loan on the date on which the Key Facts Sheet is produced. If discounts to this interest rate apply, the discount and the period in which it will apply must also be disclosed here. Only one of the 4 paragraphs in this box is required. Omit the paragraphs that do not apply to the loan this Key Facts Sheet relates to.

6 This rate must be calculated in accordance with the formula in subregulation 100 (3) but using the designated amounts provided by the consumer under sections 133AC and 133AD of the Act. This rate includes each fee or charge (if any) payable by the debtor at the time each repayment is made, being a credit fee or charge (other than a government fee, charge or duty) that is ascertainable when the comparison rate is disclosed (whether or not the credit fee or charge is payable if the credit is not provided). The tolerances in subregulations 100 (4), (5) and (6) also apply to this rate.

7 This is the sum of the principal and all interest and fees certain to be payable over the life of the home loan. The fees include each fee or charge (if any) payable by the debtor at the time each repayment is made, being a credit fee or charge (other than a government fee, charge or duty) that is ascertainable when the comparison rate is disclosed (whether or not the credit fee or charge is payable if the credit is not provided).

8 This is the total amount to be paid back, divided by the loan amount, expressed as a dollar amount for every dollar borrowed.

9 These are the fees and charges, paid to the lender on the commencement of the loan, used for the purpose of calculating the Personalised Comparison Rate.

10 If the home loan is a variable rate loan or a fixed rate loan with a term that expires at the end of the fixed rate period, only the first 2 sections (‘Repayment per month (including ongoing fees)’ and ‘Repayment per year (including ongoing fees)’) are required. If the home loan is any other type of standard home loan, the remaining sections are required.

11 This is any fee paid each month to the lender on a regular and ongoing basis.

12 This is any fee paid each year to the lender on a regular and ongoing basis. It does not include the monthly ongoing fee in note 11.

13 This is the sum of amounts payable per month on the home loan and any fees that are charged in that month.

14 This is the sum of the amounts payable per year on the home loan and any fees that are charged during the year.

15 This is the length of the fixed rate period for fixed loans, the length of the discount rate period for introductory rate loans, and the length of the period before the discounted rate applies for discounting rate loans.

16 The reference to the lender’s branches in this sentence may be removed if not applicable.

17 Only include if break fees are payable on the loan.

18 Omit this section if the interest rate will be fixed for the entire term of the loan.

19 Only one of these paragraphs is required. Omit the paragraph that does not apply to the loan this Key Facts Sheet relates to.

Assumptions

2.2 The tolerances and assumptions under section 180 of the Code apply to the calculation of any amounts in this Key Facts Sheet.

Publication online

2.3 If a Key Facts Sheet is published online, links must be provided to the websites mentioned in the Key Facts Sheet.

Adopting the Key Facts Sheet for non-prescribed purposes

2.4 A lender may produce a Key Facts Sheet for home loans if Part 3-2A of the Credit Act does not require the lender to provide a Key Facts Sheet. A lender that provides such a Key Facts Sheet must, to a reasonable extent, comply with the requirements for producing the Key Facts Sheet, but must omit any reference to the production of the Key Facts Sheet being an Australian Government requirement.