6 signs you’re ready to buy a home
Buying a home is a top priority for many Australians, and record low interest rates have helped fast-track property plans all across the country. But the decision to take out a home loan isn’t one to be made lightly. Here’s how you can know you're ready to take on the responsibility.
You have a deposit saved up
If you’ve saved up a deposit, you’ve already made significant strides in your home ownership journey. Ideally, lenders will want to see a deposit equal to 20% of a property’s value. But there are workarounds if this is out of reach.
For example, it’s possible to take out a home loan with a deposit of as little as 5% so long as you purchase Lenders Mortgage Insurance. This is to make sure your lender won’t be out of pocket if you default on your loan.
There are also government initiatives aimed at helping those with insufficient savings get on the property ladder, such as the First Home Loan Deposit Scheme and the First Home owners Grant. You could also ask your parents to be your home loan guarantor if they have the means and are willing to help.
Your job is secure
Another important area lenders will be looking at is your work history. A full-time job that you’ve held for at least a year signals stability, and will inspire much more confidence in lenders than part-time work or a series of temporary jobs. It’s also a good indication that you’ll be able to keep up with repayments, especially if it pays well.
You’re prepared for the extra costs
Your mortgage might be the biggest cost associated with buying a home, but it’s not the only one. Once you’re a homeowner, you’ll find there are several more expenses you’ll have to manage, including utilities, taxes and insurance.
The cost of maintenance and repairs will also drive up your budget, particularly if you intend to purchase a detached house. And if you’re looking to buy an apartment, you’ll have to factor in strata fees, which can be fairly exorbitant if you live in a large complex.
You prefer stability
Renting might suit some people just fine, but if you want more stability in your life then owning a home is probably the better option of the two. While it might come with its own set of challenges, you’ll no longer have to worry about rising rents or possible evictions. And if you get the urge to make any changes to your living space, you won’t have to ask for a landlord’s permission.
You have a good credit score
When determining your ability to service a loan, one of the main tools banks have at their disposal is your credit score. This is the number which reflects all the credit applications you’ve made, the amounts you’ve borrowed, and your tendency to repay on time.
A high credit score signals to lenders that you can be trusted with borrowed money. Not only are you more likely to have your application accepted than someone with a middling credit score, you’ll also have a much easier time securing a bigger loan.
But even if your credit history isn’t all that impressive, there’s no need to stress. There are always ways to improve your credit score (though it may take some time). And in any case, lenders will be looking at your overall financial standing when assessing your creditworthiness.
You can stick to a budget
Before your lender can approve your application for a mortgage, you’ll need to be able to show you can stick to a budget. Promising to rein in your spending once you’re approved won’t cut it — lenders will want to see evidence that you’re responsible with your money right now.
To this end, lenders will look over the last three months of your bank statements to make sure you’re spending within your means. If you’re able to show you possess good money management skills, it’s a surefire way to get in their good books.
For more tips to help you get off to the right start, read our first mortgage guide. And when you’re ready to purchase your dream home, make sure to compare home loans to find one that suits your needs.
Home loan comparisons on Mozo - rates updated daily
Smart Booster Home Loan
1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR
interest rate
comparison rate
Initial monthly repayment
1.99% p.a.variable for 12 months and then 2.48% p.a. variable2.47% p.a.Smart Booster Home Loan
A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required. Winner of two Mozo Expert's Choice Award for 2021.
- interest rate
- 1.99% p.a.variable for 12 months and then 2.48% p.a. variable
- comparison rate
- 2.47% p.a.
- Upfront fees
- $520
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- Optional - with 0.10% additional interest
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $50,000
- maximum borrowing amount
- $1,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Smart Booster Home Loan
UHomeLoan
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment
1.75% p.a.
fixed 3 years2.22% p.a.UHomeLoan
$0 fees and easy application. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.
- interest rate
- 1.75% p.a.
fixed 3 years
- comparison rate
- 2.22% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free up to $20,000 p.a.
- Redraw facility
- no
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $100,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- $395 Establishment fee waived for fixed rate loans that settle by 30 September 2022. Receive 1.75% 3 year fixed rate when you apply by 29 April 2021 and settle within 90 days.
Read our Mozo Review to learn more about the UHomeLoan
Basic Home Loan
Fixed, Owner Occupier, Principal & Interest, LVR<70%
interest rate
comparison rate
Initial monthly repayment
2.09% p.a.
fixed 3 years2.43% p.a.Basic Home Loan
Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.
- interest rate
- 2.09% p.a.
fixed 3 years
- comparison rate
- 2.43% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $400.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 70.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $750,000
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Basic Home Loan
Celebrate Variable Home Loan
<60% LVR, Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment
2.19% p.a. variable2.19% p.a.Celebrate Variable Home Loan
Fast and efficient online application. Automatic discounts as loan is paid off. Free extra repayments and redraw facility. Zero fees to consider. Min 40% deposit required. Winner of three Mozo Expert's Choice Award for 2021.
- interest rate
- 2.19% p.a. variable
- comparison rate
- 2.19% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $100,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Celebrate Variable Home Loan
Fixed Home Loan
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment
1.89% p.a.
fixed 2 years2.15% p.a.Fixed Home Loan
Award-winning low rate home loan that could save you thousands. No application or ongoing fees, fee-free redraws, unlimited additional repayments and an optional offset account for $10/month. Minimum 10% deposit. Winner of Mozo’s Experts Choice Award for Online Home Lender of the Year 2021.^
- interest rate
- 1.89% p.a.
fixed 2 years
- comparison rate
- 2.15% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $325.00
- Extra repayments
- yes - free, up to $20,000 p.a.
- Redraw facility
- yes - free
- Offset account
- Optional - $10 per month
- Maximum loan to value ratio
- 90.00%
- minimum borrowing amount
- $50,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Fixed Home Loan
^See information about the Mozo Experts Choice Home Loans Awards
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