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First home buyer loans 

Get into your own home sooner with a market-leading home loan and interest rate

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Property provides a strong financial foundation 

Tired of living with your parents or paying off your landlord's mortgage? Looking for a trusted broker to guide your first home-buying experience? 

Welcome to My Finance Agent's first home buyer hub. We've been helping Australians buy their first homes since 2014. On this page, you'll find information about buying your first home, whether that's a property to live in or to turn into a profitable investment. Property ownership is, after all, an important step towards financial freedom because it can set you up with a strong foundation for wealth building - financial opportunities that are not possible without having a bricks-and-mortar asset to use as security. 

 

Yet, owning a home is not without its risks and getting into the property market can feel like jumping one hurdle after another. That's why the advice of a trusted lending expert is so important. As Australia's award-winning independent mortgage broker, we specialise in guiding first-time home buyers through the myriad of first home buyer programs and lending options. We look at the big picture, short and long-term, to secure you a mortgage that aligns with your goals and lifestyle needs, and that gives you an edge in today's competitive market. 

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Keep reading to discover...

 

Everything you need to know about first home buyer loans: 

 

  • Government grants and schemes: Learn about potential government initiatives designed to support first home buyers, potentially providing substantial assistance for your first home.

  • Loan options demystified: Understand the diverse range of first-home buyer loan options available, tailored to fit your financial circumstances and aspirations.  

  • Navigating the home loan application process: Get a comprehensive overview of the application procedure, including required documents, credit assessments, and essential criteria, empowering you to navigate the home loan application process with confidence. 

  • Glossary of first home buyer loan phrases: Learn the meaning and implications of some common words and phrases you're likely to encounter on your home-buying journey. 

Let's go!

What is a first home buyer home loan? 

A first home buyer home loan is a loan designed to help you buy your first residential property. First home buyer home loans typically offer favorable terms, lower interest rates, reduced deposit requirements, and potential access to government grants or incentives.  

 

The aim is to make homeownership more accessible for people entering the property market for the first time, easing the financial burden associated with buying a home and helping individuals take their initial steps toward property ownership.  

 

There can be quite a number of moving parts! But our caring lending experts are here to provide quality information and hands-on guidance to help ensure that your first home buying experience is smooth and successful. 

How to get a first home buyer loan Australia

First home buyer grants and schemes 

There are a number of state and federal government first-home buyer programs to consider. All are designed to get first-time buyers into their own homes sooner. Not sure if you qualify? We can help to assess your eligibility, as well as recommend programs and guide you through the application process. 

Federal First Home Guarantee Scheme 

With this scheme, part of your home loan may be guaranteed by the federal government. This enables an eligible home buyer to buy a home with as little as a 5% deposit without paying Lenders Mortgage Insurance (LMI).   

Australian Capital Territory (ACT) 

In the ACT, the government may help eligible first-home buyers by removing or reducing duty on residential property or land purchases. Up to 100% discount on stamp duty may be available. 

 

New South Wales (NSW) 

For eligible applicants, the NSW Government offers a range of first-time buyer programs: 

 

  • First Home Owner Grant (FHOG) provides $10,000 to help buy a newly built or substantially renovated dwelling 

  • First Home Buyer Assistance Scheme may provide up to a 100% exemption of transfer duty  

  • Shared Equity Home Buyer Helper program contributes up to 40% of the purchase price for a brand-new home or 30% for an existing dwelling and reduces the deposit required 

Northern Territory (NT) 

The NT First Home Owner Grant (FHOG) provides $10,000 to help buy new home that has never been previously lived in. 

 

Queensland (QLD) 

The QLD First Home Owner grant gives eligible first-time home buyers $15,000 towards buying or building a new home. You might also be able to claim a concession for transfer duty. 

 

South Australia (SA) 

If you are a first home buyer you may be eligible for the first home owner grant of up to $15,000 (new home only). A first-home owner stamp duty concession may also be available. 

 

Tasmania (TAS)

The Tasmanian government offers a range of first-time buyer concessions. Those building a new residence or purchasing a newly built residence may be eligible for a grant of up to $30,000 via the First Home Owner Grant, while first home buyers of an established home may be eligible for the First Home Owner duty concession of 50%. 

Victoria (VIC) 

The Victorian Government offers a range of first-home buyer assistance measures, including: 

  • Victorian Homebuyer Fund provides eligible borrowers with up to 25% of the purchase price, in exchange for an equivalent share in the property, plus no Lenders Mortgage Insurance. 

  • Stamp duty can be reduced or removed if you’re a first-home buyer and buying a house for $600,000 or less. If you buy off the plan, you may only pay stamp duty on the land value component. 

  • First Home Owner Grant provides $10,000 to eligible people buying or building their first new home.  

 

 

Western Australia (WA) 

First-home buyers may be eligible for both the First Home Owner Grant, a one-off payment funded by the WA Government, as well as a stamp duty concession.  

 

This information was correct at the time of research. Please contact us for up-to-the-minute home buyer program details. 

 

In Australia, there are several loan options tailored to first-home buyers. Here are some of the common first home buyer options you'll come across:

Low Deposit Home Loan 

A low-deposit home loan is designed for those with a smaller deposit, usually around 5-10%, enabling them to enter the property market without a substantial upfront deposit.

Family Pledge Loan 

Family pledge loans enable a family member to use the equity in their own home as security to guarantee a portion of your loan. Typically, this family member acts as a guarantor for a specific share of the loan. As you accumulate equity in your own property over time, you have the option to release your family member from their liability, ultimately assuming sole responsibility for the loan.  

 

Guarantor Loan 

A guarantor loan involves a family member, typically a parent, using their property as security which allows a first home buyer to avoid a higher deposit and/or Lender's Mortgage Insurance, and possibly secure a better interest rate.  

 

Variable Rate Home Loan 

The interest rate on this loan can change based on market conditions, potentially resulting in lower repayments during low-rate periods and higher repayments should lender interest rates go up. 

 

Fixed Rate Home Loan 

A fixed-rate home loan locks in a set interest rate for a specific period, providing certainty in repayments, and making it easier to budget. 

 

Split Rate Home Loan 

With a split home loan, the loan is divided into fixed and variable portions, providing a balance between the benefits of both fixed and variable-rate loans. 

 

Interest-Only Home Loan 

An interest-only home loan allows the borrower to pay only the interest on the loan for a certain period, usually 1-5 years, reducing initial repayments. 

 

Construction Loan 

construction loan facilitates the financing of a new home construction or major renovation, with payments released in stages as the construction progresses. 

 

It's important to understand the options available to you in order to choose the most suitable loan for your situation and goals. That's what we're here to help with – to provide valuable insights and guidance throughout the process. 

Different types of first home buyer home loans 

Property ownership provides a strong foundation for building financial independence. It opens up financial options that may only be available through the benefits of real estate. 

CHRISTOPHER JONSON

Director and finance broker

Christopher Jonson | First Home Buyer Home Loan Expert| My Finance Agent | Australia

Navigating the first home buyer loan process

In the whirlwind of modern life, we understand that finding your first home can be overwhelming. That's why we've streamlined the loan process, simplifying the home loan experience for all of our valued clients, especially first-time buyers. 

Let's walk through the process:

 

1. Research and learning

If you're reading this page, it looks like you're already researching the basics of home loans - loan types, the home-buying process, as well as government grants and schemes for first-home buyers. Well done on taking the first steps towards homeownership!

 

2.  Assess financial readiness 

The next step is to get in touch with a trusted home loan expert. One of our award-winning team members would be pleased to start putting a free 'home ownership game plan' together for you. We can help to determine how much you can afford to borrow and repay. If you aren't ready to apply for a loan just yet, that's ok too. We can help create a savings plan to bring your home ownership goals closer.


3. Compare loans and lenders 

Now it's time to compare loans and lenders. Keep in mind that the loan interest rate, while very important, is not the only factor to consider. We'll create a shortlist of recommendations based on matching lender and loan features with your needs. 

 

4. Apply for pre-approval 

Before you start house-hunting, it's a good idea to get a home loan pre-approval. Armed with a pre-approval, you know that you can make offers on properties with confidence. Pre-approval is also a signal to sellers that you are a legitimate buyer. 

 

5. Time to go home hunting 

It's time to go house-hunting! But finding the right property can be the most time consuming part of the process. To help you find your dream home faster, we provide you with free property research tools, as well as access to trusted buyers agents who can help with the heavy lifting of finding properties that tick all of your boxes.  

6. Submit your loan application 

Found a property? Offer accepted? Great! Now it's time to seek formal loan approval by submitting updated application details, including information about the property. The lender will review your application and conduct an underwriting process, which includes verifying your financial information and assessing the property's value and condition.  

 

7. Review and sign the loan offer 

Once approved, you'll receive a formal loan offer detailing the loan terms and conditions. We'll help you review the loan documents to ensure that everything is in order before you sign them.  

 

8. Loan settlement 

This is the day you take ownership of your new home! On the date of settlement, your lender will transfer funds to the seller to pay for the loan balance. Your solicitor or conveyancer will transfer any other funds, register the property in your name, and hand you the keys to your new home. For our part, we make sure that all parties have everything they need so that settlement goes smoothly. 

 

9. Follow up and review 

Most mortgage brokers consider their job done at settlement. At My Finance Agent, we review your loan at one month post-settlement to check that your first repayment processed properly and that your loan is operating as it should. At 12 months, and every year as long as your loan is active, we will automatically conduct a loan review to see if we can improve your loan rate or other terms. It's all part of our service! 

Many first-home buyers need help from a guarantor. We understand this and make sure that guarantors are kept closely involved at all stages of the process. 

BELINDA SLATER

Finance broker

Belinda Slater | First Home Buyer Lending Expert | My Finance Agent | Australia

Glossary of first home buyer loan terms 

Here are some common terms you are likely to encounter on your home-buying journey:

 

Conditional approval 

Conditional loan approval is a term used by lenders to say that the loan is approved subject to further conditions (for instance, the borrower needs to provide evidence of insurance) that must be met before the loan can be fully/unconditionally approved. 

 

Conveyancing 

Conveyancing is the legal process of transferring property ownership from the seller to the buyer. The conveyancing process is managed by a licensed conveyancer or solicitor. We would be pleased to recommend one.

 

Deposit 

A deposit is the initial amount of money paid by the buyer towards the property's purchase price. In lending, the deposit is often expressed as a percentage of the total price of the purchase. Traditionally, lenders prefer a 20% deposit, but some first-home buyer loan schemes require a deposit as low as 2 to 5%. 

 

Equity 

On a mortgaged property, equity describes the owner's stake in that property, which is difference between the property's market value and the balance of the loan. For example, if a $500,000 property has a home loan balance of $300,000, the owner's equity is $200,000. Equity can be used for purposes such as cash-out refinancing or used as security to borrow against - e.g., to buy an additional property.

 

Interest 

Home loan interest is calculated daily by multiplying your loan balance by your interest rate, and then divided by 365 days. This is your daily interest charge. At the end of the month, the lender adds together the daily interest charges for each day in the month. This is the monthly interest charge you see on your statements. Because home loan interest is calculated daily, making more frequent repayments (weekly or fortnightly) can reduce your overall interest costs.

 

Lenders Mortgage Insurance (LMI) 

Lenders Mortgage Insurance is insurance that the borrower must pay to protect the lender in case they default on their loan. LMI is typically required for home loans with a deposit of less than 20% of the property's value. Some first home buyer programs provide exemption from LMI.

 

Loan term 

The loan term is the time it will take to repay the home loan in full, assuming the borrower makes all of their repayments on time. The loan term is typically expressed in years. The typical home loan term is 30 years, but shorter home loan terms may be offered. 

 

Loan to Value Ratio (LVR) 

Loan to Value Ratio (LVR) expresses the loan amount as a percentage of the value of the property. For example, if you are buying a property worth $500,000 and have a deposit of $100,000, the loan amount (notwithstanding other purchase costs) will be $400,000. The workings look like this: Loan amount ($400,000) divided by property value ($500,000) = 80%. Conventional home loans typically have a minimum LVR of 80%, which means the borrower needs a 20% deposit, plus purchase costs.

 

Offset account 

An offset account is a linked transaction or savings account attached to a mortgage, where the balance is offset against the loan balance to reduce the interest payable on the loan.

 

Pre-Approval 

Pre-approval describes a preliminary assessment by a lender indicating the amount you may be eligible to borrow based on your financial information. It is not a guarantee of a loan, but helps in setting a budget for house hunting. It also signals to sellers that you are a legitimate buyer. 

 

Principal 

Principal describes the initial amount borrowed or the outstanding balance of a home loan, excluding interest. WIth a principal and interest loan - also called a P&I loan - repayments are made to repay interest charges and reduce the principal amount. With an interest-only loan, the loan principal is not reduced by the borrower's repayments.

 

Property appraisal 

Also known as a 'property valuation', a property appraisal is an assessment of the property's value conducted by a licensed valuer who uses their experience and data to determine the property's market worth. 

 

Redraw facility 

A redraw facility is a loan feature offered by some lenders that allows borrowers to withdraw any additional repayments made on their home loan. It potentially reduces interest charges and provides flexibility for managing your finances.  

 

Settlement 

Settlement is the final stage of the home-buying process. It is a legal process where the ownership of the property is transferred from the seller to the buyer. On the date of settlement, your lender will transfer funds to the seller to pay for the loan balance. 

 

Stamp duty 

Stamp duty - also know as transfer duty - is a tax imposed by state or territory governments on property transactions. The amount varies based on the property's value and location. First-home buyers may be eligible for a reduction of stamp duty up to 100%. 

 

Unconditional approval 

Unconditional approval describes full approval of a home loan by the lender after assessing all necessary documentation. It confirms that the loan is granted without any outstanding conditions. 

Greg Robinson | First Home Buyer Lending Expert | My Finance Agent | Australia

We have a network of trusted real estate professionals who can help give you an edge in finding a property in the current competitive market, including buyers agents who often have access to properties before they are listed. 

GREG ROBINSON

Finance broker

My Finance Agent Five Star Rated Finance Brokers Australia
My Finance Agent Five Star Rated Finance Brokers Australia
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