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 - last updated 20 April 2024
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Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
Owner Occupier, LVR <80%
interest rate
comparison rate
Initial monthly repayment5.99% p.a. variable5.90% p.a.Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
CompareCompareUnloan Variable
Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% 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
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
- 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 Unloan Unloan Variable
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Mozo experts choice awards won:
- Exceptional Value Home Lender - 2024
Express Home Loan
Owner Occupier, Principal & Interest, LVR <90%
interest rate
comparison rate
Initial monthly repayment6.01% p.a. variable6.14% 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.
CompareCompareExpress Home Loan
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.
- interest rate
- 6.01% p.a. variable
- comparison rate
- 6.14% p.a.
- interest rate
- 6.01% p.a. variable
- comparison rate
- 6.14% p.a.
- Upfront fees
- $134
- Ongoing fees
- $10.00 monthly
- Discharge Fee
- $350.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 90.00%
- minimum borrowing amount
- $5,000
- maximum borrowing amount
- $3,000,000
- 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 Bendigo Bank Express Home Loan
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Flex Home Loan
Fixed, Owner Occupier, Principal & Interest, LVR <60%
interest rate
comparison rate
Initial monthly repayment5.99% p.a.
fixed 3 years6.37% p.a.Competitive Fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.
CompareCompareFlex Home Loan
Competitive Fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.
- interest rate
- 5.99% p.a.
fixed 3 years
- comparison rate
- 6.37% p.a.
- interest rate
- 5.99% p.a.
fixed 3 years
- comparison rate
- 6.37% p.a.
- Upfront fees
- $250
- Ongoing fees
- $250.00 yearly
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- -
- maximum borrowing amount
- -
- 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 ubank Flex Home Loan
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Discounted Home Value Loan
Owner Occupier, Principal & Interest, LVR 70-80%
interest rate
comparison rate
Initial monthly repayment6.09% p.a. variable6.09% p.a.Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).
CompareCompareDiscounted Home Value Loan
Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).
- interest rate
- 6.09% p.a. variable
- comparison rate
- 6.09% p.a.
- interest rate
- 6.09% p.a. variable
- comparison rate
- 6.09% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $50,000
- maximum borrowing amount
- $15,000,000
- 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 HSBC Discounted Home Value Loan
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Neat Home Loan
Owner Occupier, Principal & Interest, LVR <60%
interest rate
comparison rate
Initial monthly repayment6.14% p.a. variable6.16% 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.
CompareCompareNeat Home Loan
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.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.16% p.a.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.16% p.a.
- Upfront fees
- $250
- Ongoing fees
- $0.00
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $80,000
- maximum borrowing amount
- $5,000,000
- 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 ubank Neat Home Loan
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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.
^See information about the Mozo Experts Choice Home Loan Awards
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