Mozo: First homebuyer repayments, small business owners' property-buying woes, no super-sized RBA cuts

Today’s blog is now closed. You can stay up-to-date with the latest banking news and interest rate updates over on our latest live blog.

The federal government announced over the weekend that it would allow eligible first home buyers to enter the market with a deposit of just 5% if re-elected.

On top of this, the government also revealed it would remove income caps on the current housing scheme and increase property price limits.

So, what might this actually look like for first home buyers and their monthly mortgage repayments?

According to property marketplace Domain , the median house price in the combined capitals is $1.16 million (Dec quarter, 2024), so we did some analysis by looking at a $1 million home with a 5% deposit.

• 5% deposit = $50,000 down payment
• Amount to borrow = $950,000
• 25-year loan term

If you’re a hopeful first home buyer, it’s important to seek out one of the best home loans for your needs, as a competitive interest rate can make a significant difference to your monthly repayments and how much you pay in interest over time.

How much difference does your interest rate make?

Here’s some average interest rates† across the Big Four, tier one and customer-owned banks, taken on 14 April, 2025.

When we talk about tier one banks, we’re referring to players such as AMP, ING and Suncorp, while customer-owned banks include Bank Australia, Greater Bank and Newcastle Permanent.

Here’s a look at what your monthly repayments could be using these average interest rates on a $950,000 loan – you can compare any interest rate you like using our home loan comparison calculator.

Provider type	Average interest rate (p.a.)	Monthly repayment	Interest over 25 years	Potential savings
Big Four	6.71%	$6,540	$1,011,905	$0
Tier one	6.66%	$6,510	$1,002,931	$8,974
Customer-owned	6.40%	$6,355	$956,570	$55,335
Source: Mozo database as at 14 April, 2025. Rates are for an owner occupier with <80% LVR, making principal and interest repayments over 25 years on a $500,000 home loan.

Whether the people who could benefit most from entering the property market with a small deposit are the same people who can afford repayments of over $6,000 every month is up for debate.

New property price caps for first home buying scheme

Here’s a look at what the government is proposing for the new property price caps by region. It says these new price caps are linked to the average house price in each state and territory, with the exception of Sydney and NSW’s regional centres.

The government says, “New South Wales capital city and regional centre price cap is set at $1.3 million rather than at the median house price of approximately $1.5 million to ensure purchase prices remain within the borrowing capacity of first‑home buyers.”

Region	New price cap
NSW – Sydney / regional centre	$1,300,000
NSW – other	$800,000
Victoria – Melbourne / regional centre	$950,000
Victoria – other	$650,000
Queensland – Brisbane / regional centre	$1,000,000
Queensland – other	$700,000
WA – Perth	$850,000
WA – other	$600,000
SA – Adelaide	$900,000
SA – other	$500,000
Tasmania – Hobart	$700,000
Tasmania – other	$550,000
ACT	$1,000,000
NT	$600,000
Source: Federal government .

---

That’s all for today – thanks for following. See you tomorrow.

Self-employed Aussies help drive the economy – but when it comes to getting a home loan, it’s like hitting a pothole the size of a GST bill.

New research from Great Southern Bank has revealed that 40% of small business owners say homeownership feels out of reach, with nearly half of millennial operators struggling to even get a home loan approved.

It’s not just a confidence issue. Income instability, seasonal cashflow, and a lack of understanding from lenders are creating real barriers for tradies, sole traders, and start-up dreamers alike.

Being the boss shouldn’t block your borrowing power

While big banks still favour 9-to-5 borrowers, some lenders are starting to adapt. Great Southern Bank, for example, now accepts just one year of tax returns from eligible sole traders and considers prior PAYG income for tradies who’ve recently gone solo.

That’s a welcome move – but the gap remains wide.

More than 1 in 5 business owners are still saving for a deposit. Nearly 30% say seasonal income makes it tough to show ‘proof’ of earnings. And 14% have been treated poorly by a bank when trying to buy a home.

Small business, big changes needed

If you’re your own boss, here are a few key broker-backed tips, pulled from the bank’s research report, that may help level the lending field:

• Pay yourself first (and regularly). Stability matters more than hustle.
• Cut back on personal debt before applying – lowering debt-to-income ratio.
• Get your paperwork sorted: tax returns, BAS, profit & loss statements.
• Know your addbacks – expenses like depreciation or non-compulsory super.

Ready to turn your ABN into a home loan approval?

At Mozo, we compare home loans from lenders that understand the self-employed hustle – and we make it easier to filter your options based on what matters: flexible documentation, competitive rates, and real people who know seasonal income is still income.

Need small business banking accounts? See which providers stood out in the Mozo Experts Choice Awards to find the right fit for your business.

Australia’s love affair with Japan just keeps growing. According to the Australian Bureau of Statistics (ABS) latest data , short-term trips to Japan jumped 35% in February 2025 compared to last year – the biggest increase among our top 10 destinations.

From cherry blossoms to snowfields, Aussies are visiting Tokyo, Osaka, Kyoto and Niseko in droves. Booking data gathered by News Corp shows Tokyo has overtaken Bali as our go-to overseas destination.

A weaker yen has helped the Aussie dollar stretch further, and budget-friendly flights have sealed the deal. But with more travellers hitting the ski slopes and sushi bars, travel insurance is incredibly important.

Protect your plans with the right policy

Whether you’re travelling for powder or izakayas, travel mishaps can happen. Overseas medical costs aren’t cheap, and things like flight delays, cancellations or lost baggage could hit your wallet hard.

Travel insurance can help to protect against these risks. Don’t forget to read the Product Disclosure Statement (PDS) properly to understand exactly what you are – and aren’t – covered for when travelling.

Mozo’s expert guides can help you:

✅ Understand the most common risks for Aussies travelling to Japan

✅ Compare policies for medical cover, snow sports, cancellations, more

✅ Find a policy that fits your itinerary and budget

As Australia's 2025 federal election approaches, both major parties have unveiled housing policies aimed at assisting first-home buyers:​

Labor's proposal

• A $10 billion investment to construct 100,000 homes exclusively for first-home buyers over eight years.​
• Eligibility for a government-backed 5% deposit scheme, eliminating the need for mortgage lenders insurance.​
• An automatic $1,000 tax deduction for work-related expenses, simplifying tax relief for workers.​

Coalition's proposal

• A tax deduction on mortgage interest for newly built homes, applicable to the first $650,000 of the mortgage for up to five years.
• Eligibility for individuals earning up to $175,000 or couples earning up to $250,000.​
• A one-off $1,200 tax cut for middle-income earners starting in 2026.​

Treasurer Jim Chalmers has expressed confidence in the resilience of first home buyers, asserting that defaults remain rare despite the expansion of the federal government's First Home Guarantee scheme.​

"We know from the existing program that there has been an absolutely minuscule amount of defaults on these debts," Chalmers stated on ABC's News Breakfast. "So we are extremely confident that this is a very responsible way to get more first home buyers into the market."​

The confidence comes as Labor moves to supercharge the scheme, allowing up to 50,000 buyers a year to enter the market with just a 5 per cent deposit – no lenders mortgage insurance required. 

The expanded program was a headline announcement at Labor’s federal election campaign launch in Perth over the weekend, alongside plans to build 100,000 homes exclusively for first home buyers.

On the other side of the housing debate, Opposition Leader Peter Dutton revealed the Coalition’s proposal to let first-time buyers of newly built homes deduct their mortgage repayments from their income tax.

Default rates remain low

Recent data supports Chalmers' claims. The Reserve Bank of Australia (RBA) reported that housing loan arrears have increased slightly since late 2022 but remain around pre-pandemic levels. Notably, less than 0.01% of loans are both in arrears and negative equity , indicating a low risk of significant defaults.

Additionally, Housing Australia's 2023-24 report on the Home Guarantee Scheme , which includes the First Home Guarantee, indicates strong performance among participants. Approximately 63% of scheme participants are ahead on their mortgages, and nearly 88% of the 50,000 available guarantees were utilised last financial year.

Addressing supply concerns

While the scheme has facilitated homeownership for many, critics argue that increasing demand without addressing housing supply could exacerbate affordability issues. Labor's $10 billion plan to build 100,000 homes for first home buyers aims to tackle this, but the homes are not expected to be available until the 2028 financial year.

Despite bold market forecasts tipping a 50 basis point cut to the cash rate in May, Reserve Bank of Australia (RBA) Governor Michele Bullock has downplayed the likelihood of any drastic move.

Speaking in Melbourne last Thursday, Bullock said it was still “too early” for the RBA to determine the path for interest rates and reiterated the need for patience in the face of global uncertainty.

This uncertainty stems from aggressive tariff-lead trade policies recently introduced by the United States, which have sent global markets into a frenzy, causing volatility and unpredictability.

“There are a lot of moving parts,” she said. “We are bringing all this together to form an objective assessment of what it means for the outlook for domestic activity and inflation here at home.”

Bullock added, “We’re mindful of not adding to the uncertainty… It’s going to take some time to see how all of this plays out.”

Her comments come as NAB predicts a 50 basis point cut at the RBA’s next meeting on 20 May, which would take the cash rate from 4.10% to 3.60%. The bank is forecasting further cuts throughout the year, potentially taking the rate down to 2.60% by early 2026.

NAB has already acted on its forecast, slashing fixed home loan rates by up to 0.55%. Its one-year fixed rate for owner-occupiers is now 5.54%, with the three-year rate at 5.39%.

Despite the aggressive outlook, Bullock struck a more cautious tone: “Financial market and economic volatility can be expected as this process unfolds… but the Australian financial system is strong and well placed to absorb shocks from abroad.”

With global trade tensions rising and local inflation still sticky, the RBA is keeping its cards close to its chest ahead of the May decision.