Home loan schemes are great but knowing the numbers is better

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We've heard a lot about the property market this fortnight, especially the lack of affordable housing available to younger buyers.

That's why the federal government stepped in with its various budget fixes, one of which was to expand the First Home Guarantee. Before the Treasurer's recent announcement only singles, couples, and de-facto partners were eligible to apply for national and state First Home Guarantee schemes.

But now any two people who qualify can apply, and that includes your best friend or your little sister. The scheme is also open to non-first time buyers who haven't owned in 10 years.

These changes, among others, are surely welcome by many people. Yet there are probably many who think a lot more could have been done to help homebuyers in a tough market. For example, Corelogic's head of residential research Eliza Owen argues that these changes make this policy (and others) fairer, but still, they may not be effective.

"The relatively high-income thresholds around the First Home Guarantee in particular may help people into housing faster, who would have achieved home ownership anyway, limiting more equitable home ownership across income distributions," she said.

"If interest rates decline, these schemes will make more sense for hopeful home owners comparing the cost of taking on more mortgage debt with the ongoing costs of renting, and they will likely see more take up in the years ahead."

In short, the schemes help people at certain income levels and possibly those already in a position to afford the first deposit for a home. So again, perhaps more can be done.

Home loan schemes aside, what about the market?

The other side of the property equation is the reality of what's available to buyers, first, second or otherwise.

Earlier this month SQM Research noted that national residential property listings fell in April by 9% to 227,020 properties, which is a sizeable drop. This suggests there are simply fewer homes on offer, regardless of what scheme you're thinking of taking up.

SQM says the falls were driven by a significant dip in new listings, which indicates a tentativeness among prospective sellers as we approach the middle of the year. Specifically, Sydney recorded a fall in listings of 13%, while Melbourne, Brisbane and Adelaide also recorded declines of 12%, 11% and 10%, respectively.    

So what's the point? Well, saving money for a first deposit and capitalising on schemes or grants remain important. However, equally crucial is researching your immediate market to understand how much is available to buy.

If there are fewer listings in your suburb of choice and demand there remains strong, chances are you'll end up paying more. A higher price of say 5 or 10% more might end up being detrimental to your plan, making your initial deposit that much higher.

Additionally, the cost of your home loan matters. That's why we offer home loan comparisons on our site, the idea being that you don't have to settle for the highest rate or a loan with limited features.

So yes, make the best of the homeowner schemes available but to make your research thorough you should also:

  • Check local property reports to understand the median or average prices.
  • Get a sense of how many properties have been listed in recent months on sites like SQM or Corelogic, or simply ask your real estate agent.
  • Turn up to open houses and auctions to get an in-person feel for how many buyers are currently looking and how competitive the market is.

Once you've done all this, be sure to start comparing the best home loans on offer, such as the ones below. The goal should be to find a loan with a good interest rate and that overall works for your budget. Not all home loans, like home loan schemes, are created equal!

Compare low rate home loans - last updated 23 April 2024

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  • Mozo Expert Choice Badge
    Express Home Loan

    Owner Occupier, Principal & Interest, LVR <90%

    interest rate
    comparison rate
    Initial monthly repayment
    6.01% p.a. variable
    6.14% p.a.

    Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

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  • Neat Home Loan

    Owner Occupier, Principal & Interest, LVR <60%

    interest rate
    comparison rate
    Initial monthly repayment
    6.14% p.a. variable
    6.16% p.a.

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

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  • Flex Home Loan

    Owner Occupier, Principal & Interest, LVR 70-80%

    interest rate
    comparison rate
    Initial monthly repayment
    6.24% p.a. variable
    6.48% p.a.

    Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process.

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  • Fixed Rate

    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.54% p.a.
    fixed 2 years
    7.10% p.a.

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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