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Read our Mozo Review to learn more about this Macquarie Basic Home Loan
BCU Bank’s OMG owner occupied home loan offers a variety of great low rates depending on your deposit. Save with no ongoing annual fees. Access your extra payments when you need to through the redraw facility. Pre-approval valid for 3 months.
Read our Mozo Review to learn more about this BCU Bank OMG 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.
Read our Mozo Review to learn more about this Macquarie Basic Home Loan
Read our Mozo Review to learn more about this Macquarie Offset Home Loan
Refinancers or first home buyers pay no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and credit criteria apply.
Read our Mozo Review to learn more about this Newcastle Permanent Special Real Deal Home Loan
Read our Mozo Review to learn more about this Macquarie Basic Home Loan
Read our Mozo Review to learn more about this Macquarie Offset Home Loan
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First-home buyer loans technically aren’t a real thing – it’s a bit of a misnomer. But certain lenders and banks can offer discounted interest rates and fees, or sign-up incentives tailored to first-time buyers.
However, in most cases, you’ll be offered the same home loans as those who already own property.
Thankfully, there’s plenty you can do to help reduce the cost of getting your first home loan.
Our step-by-step guide on getting a loan for your new home, from working out how much you can borrow, to the day the keys are in your hands. View
If you’re a first-home buyer looking to break into the market, you’re more likely to have a home deposit of less than 20%, which affects your loan-to-value ratio (LVR) and the interest rates most lenders offer.
So, if you’re a first-home buyer with a deposit of 10% or less, the Mozo experts identified twelve of the lowest-cost variable rates for borrowers with 90% LVR, as part of the 2024 Mozo Experts Choice Awards.
According to Mozo’s analysis, the average variable rate among the award-winners comes to 6.03% p.a. Compared to the average variable rate in the Mozo database for a borrower with <90% LVR, which is 7.08% p.a. (OO, P&I, $400k) at the time of writing, the best First Home Buyer Loans typically beat the average by around 1%.
When you compare home loans for the first time, it can be hard to know exactly what to look out for. Here’s a brief overview of some of the main criteria to consider when narrowing down your shortlist.
You can think of the interest rate on your loan as the cost of borrowing money from a bank or lender. Interest is calculated daily and included in your mortgage repayment, whether it's weekly, fortnightly, or monthly.
Aside from fees, interest is one of the main home loan costs you’ll have to deal with. The lower your rate is, the less interest you’re charged.
There are two main types of interest rates to compare:
What’s the difference between the two main types of interest rates, and how do you choose the one that best suits your needs? View
Fees typically fall into one of two categories: upfront and ongoing.
You may incur other fees, depending on your home loan, such as loan termination or loan discharge fees, which are payable at the end of the loan to transfer the title into your name.
As a first home buyer, you might be tempted to take out a ‘no frills’ home loan – i.e. one that does away with many of the cost-saving features available on other loans – in favour of a typically lower interest rate.
While that might make sense for your situation, it’s also important to consider the cost-saving features that might be available to you.
A transaction or savings account linked to your home loan, that can help reduce the amount of interest you pay.
Some home loans offer offset accounts for free. But for others, you’ll pay an extra fee or additional interest will be added to your rate.
Make sure you compare offset account home loans to see if this home loan feature is a good fit for you.
Having the option to make extra repayments will help you not only to pay off your loan faster but can reduce the amount of interest you end up paying over the life of your home loan.
It's worth checking how much extra repayments could save you by using an extra repayment calculator.
Some home loans let you choose how often you make repayments, either weekly, fortnightly, or monthly. This can come with cost savings.
Some home loans let you hit ‘pause’ on your repayments, which can come in handy if you’re experiencing a temporary setback or have to cover a surprise expense.
Generally, you will need to be ahead on your repayments to make use of this feature.
The standard term for a home loan is 25 years but most lenders have a maximum loan term of 30 years.
As a first-home buyer, it can be tempting to opt for the longest possible term as this reduces your loan repayments, but the catch is you'll pay more in interest over the life of the loan.
For example, if you borrowed $600,000 at 6.50% p.a. interest over a 25-year term, your monthly repayments would be $4,051 per month, and you’d end up paying $615,373 in interest.
If you spread out your home loan over 30 years instead, your repayments would come down to $3,792, but you’d pay $765,267 in interest – that’s an extra $149,894 over just five years.
Most lenders require you to save up a 20% deposit. But, as a first home buyer, you may only need to save 2 to 5% thanks to home loan grants and schemes designed to help people like you attain homeownership faster.
From the First Home Owners Grant, to stamp duty relief, which government grants and schemes are you eligible for? View
Government schemes like the First Home Guarantee, Regional First Home Buyer Guarantee, and the Help to Buy scheme allow eligible borrowers to buy their first place without having to save up a full 20% deposit, and without needing to pay Lenders Mortgage Insurance (LMI).
Given the average home deposit in Australia is almost $192,000, as of March 2024, a 5% deposit looks much more achievable to save for.
Speaking of saving, that’s exactly what most lenders want to see from your deposit.
Genuine savings, as opposed to being gifted a deposit from family, should make up the bulk of your first home deposit, as lenders want proof that you’re financially stable enough to save it yourself. By extension, they want proof that you can service a home loan.
But the larger your deposit is, the lower your home loan interest rate could be. This is because lenders often tailor the rates they offer to borrowers with different LVR tiers.
As it’s your first home loan, these are the sort of rates you could expect to find, based on your deposit size and corresponding LVR tier:
Average variable rates by LVR tier in the Mozo database for owner-occupiers, borrowing $400,000, making principal and interest repayments over 25 years. Correct as at 19 July 2024.
| Deposit size | LVR tier | Average variable rate |
| 5% | 95% LVR | 7.35% p.a. |
| 10% | 90% LVR | 7.08% p.a. |
| 20% | 80% LVR | 6.80% p.a. |
| 30% | 70% LVR | 6.76% p.a. |
| 40% | 60% LVR | 6.72% p.a. |
Aside from your deposit, there are a few other big costs to getting your first home loan.
Stamp duty is a one-off property tax that you pay your state or territory government when you purchase a property. Stamp duty costs vary by state, and there are concessions available for eligible first-home buyers. View
Conveyancing is the legal process of transferring ownership of real estate, whether it's a house or land, from one party to another. View
Application fees are paid to your lender to process your home loan application. Application fees in the Mozo database range from $0 to $990, depending on the lender and the type of home loan.
Property valuation fees are also paid to your lender and help establish the value of the property you want to buy. Some lenders waive this fee if you proceed through to settlement. View
Your first home loan doesn’t have to be your only home loan, thanks to a process called refinancing.
If you feel you’re paying too much interest, you’d like access to new features, you want to refinance to a fixed rate home loan from a variable rate, or you’d like to extend your loan term, you can compare refinance home loans to see if you can switch and save.
Just be aware that your LVR will play a part in the interest rates new lenders will offer, and that there are costs involved with refinancing.
Not sure how much your home loan will cost? Try our free home loan calculators to estimate. See more
If you’re over 18 years old, and you’re an Australian citizen or resident who has never owned property in Australia before, you would be considered a first home buyer. That means you would be eligible to take out a first home loan.
While bad credit won’t completely shut off all your options, you can expect higher interest rates and much fewer home loans to choose from.
So before you apply for your first home loan, it’s a good idea to obtain a free copy of your credit report to check your credit score. The next step would be to clear all of your debt, including any personal loans or credit card repayments you may have missed, so you can remove the red mark against your name.
Need help? Check out our guide to paying off credit card debt.
You can, and it’s also a good idea to review your first home loan a few years down the track to make sure you’re still getting a good deal with low interest rates.
Right here at Mozo! Scroll up to the table at the top of the page and start comparing a variety of first home loans to find a deal that suits you.
Once you have a more in-depth look at the table, you’ll begin to notice features mentioned in the guide above, including interest rates, comparison rates, fees, as well as additional benefits like free extra repayments and an offset account.
Select the home loan you want by clicking on the blue “go to site” or green “enquire now” button beside the product of your choice. You’ll then have the opportunity to apply for the loan through the lender’s site.
Start by preparing your documents and getting all the paperwork ready. Requirements will vary from lender to lender, but typically you’ll be asked to provide:
You’ll also need a clean credit record, although bad credit won’t necessarily rule you out.
If you’re an eligible first home buyer, it’s a good idea to complete your First Home Owner Grant application before applying.
And if you’ve decided to take out your first home loan with a guarantor, make sure they also have their documents prepared, including identification, income, assets and liabilities.
When budgeting for your first home, you’ll also have to factor in costs like:
Learn what you need to know about mortgages and money management in our helpful guides. See all
Get the latest on property market trends, interest rates, and lending news from Mozo's expert writers. See all
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I would suggest shopping around. I went with one of the big 4 because it was a trusted brand and I have had nothing but trouble. Constant miscommunication - due to a bank error I missed out on a fixed portion of my loan. They take no accountability for their mistakes and except you to just deal with it.
Read full reviewI would suggest shopping around. I went with one of the big 4 because it was a trusted brand and I have had nothing but trouble. Constant miscommunication - due to a bank error I missed out on a fixed portion of my loan. They take no accountability for their mistakes and except you to just deal with it.
I've had a CBA account since I was in primary school, all of my experiences with them on a personal level have been positive. Our current home loan has been refinanced with CBA, the options and drawbacks of each mortgage type are clear on the website and in the PDF options. Not being able to have an offset account with a fixed rate is the only drawback I've found, but it *did* allow us to lock in a lower rate than other banks. CBA were also one of the only banks that allowed us to finance our home with a 10% deposit.
Read full reviewI've had a CBA account since I was in primary school, all of my experiences with them on a personal level have been positive. Our current home loan has been refinanced with CBA, the options and drawbacks of each mortgage type are clear on the website and in the PDF options. Not being able to have an offset account with a fixed rate is the only drawback I've found, but it *did* allow us to lock in a lower rate than other banks. CBA were also one of the only banks that allowed us to finance our home with a 10% deposit.
Bankwest offers user-friendly digital services, competitive rates, and helpful customer support, making banking convenient. However, some may find limited branch locations a drawback. Be aware of potential fees and ensure their product offerings match your financial needs before committing. Overall, it's a solid choice for tech-savvy users.
Read full reviewBankwest offers user-friendly digital services, competitive rates, and helpful customer support, making banking convenient. However, some may find limited branch locations a drawback. Be aware of potential fees and ensure their product offerings match your financial needs before committing. Overall, it's a solid choice for tech-savvy users.
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