EFM Sharing in any future decreases in the value of your property

If you repay the EFM® loan on the Loan Expiry Date, and the property has actually decreased in value between the time you took out the EFM loan and when you repay it, you will be required to repay the original EFM loan amount less a share of the decrease in value. That is, the amount you repay will be actually less than the original amount that was advanced to you under the EFM loan. The share of the decrease in value of the property is called the "Depreciation Allowance" and is equal to the Original EFM Percentage times the decrease in the value of the property.

For example if your EFM loan amount was for 20% of the original value of your property then the EFM loan percentage would be 20% and the Depreciation Allowance is then 20% of the decrease in the value of the property. Other percentages are as follows:

This website contains examples and graphs that illustrate the financial impact of using EFM loans. They do not represent what will actually happen for any loan that you may take as property prices, interest rates and other circumstances will change. The examples and graphs are formulated based on a set of assumptions outlined below. These assumptions are not forecasts or predictions and may or may not reflect actual events.

Each example assumes that the EFM is for 20% of the property's value at the outset, has a 0% interest rate and that no default interest is payable. The actual EFM may be for less than 20% of the property's value and the outcomes may vary considerably if default interest becomes payable. All examples of how any increase in the value of the property is shared assume that the value of the property has increased by an annual nominal rate of growth of 8%. This is based on estimates of historical median rates of capital growth attributable to Australian residential real estate over the period 1986 to 2005. Actual rates of growth may be greater or less than this number.

If the example contains a traditional home loan comparison, it assumes that the traditional home loan interest rate is 7.80% p.a., the loan term is 25 years, all principal and interest payments are made on time, the only repayments made are the required repayments - that is no additional repayments or redraws are made, and no event of default has occurred and default interest is not incurred at anytime during the life of the loan.

The actual traditional home loan term and interest rate may be greater or less than these assumptions and individual circumstances such as additional repayments may affect the outcomes considerably. The assumed interest rate of 7.80% for the traditional home loan used in the examples is based on the ‘Indicator Lending Rates – Banks’ published by the Reserve Bank of Australia for a standard variable rate housing loan as at October 2006.

If the example contains Lenders Mortgage Insurance, the premium payable is based on rates effective for the relevant product as at the date of this booklet.

Assumptions specific to an example are detailed in the example. Numbers may have been rounded to the nearest thousand or one percent where relevant. Fees and charges other than those mentioned in the examples such as application fees, valuation and legal fees, conveyancing fees and stamp duty on the purchase of a property are payable. These will vary depending on the individual circumstances.

This web site does not take into account your personal objectives, financial situation or particular needs. You should obtain a copy of the "Equity Finance Mortgage Disclosure Document" and the "Equity Finance Mortgage Terms and Conditions Booklet" and consider them before making a decision about whether to acquire an Equity Finance Mortgage. A copy of the "Equity Finance Mortgage Disclosure Document" and the "Equity Finance Mortgage Terms and Conditions Booklet" can be obtained by calling your lender.

All information is correct as at 01/02/2007 and is subject to change.

Fees, charges, terms, conditions and lending criteria apply. Full details are available on application. EFMs are arranged by Rismark International Funds Management Limited ABN 15 114 530 139. AFS licence number (293881) (trading as Rismark International). Permanent Custodians Limited ACN 001 426 384 is the lender.
ARES Capital Management Pty Limited's intellectual property relating to the EFM product is protected by Australian Innovation Patent No. 2005 100 871, 2005 100 869, 2005 100 868, 2005 100 867, 2005 100 865, and 2005 100 864.
® 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.