At last, a place you can come home to
Embarking on the home-buying process for the first time can be a huge learning curve, but it’s well worth the effort. Speak with a home loan consultant today to discuss your options.
Are you ready to start?
What to expect.
Before you get into serious discussions or financial planning, it’s worth simply getting accustomed to how the process works and even what some of the terms mean. If you’re starting from scratch, you might feel like your banker, broker and even your parents or home-owning friends are talking a different language. You’ll be coming across terms like ‘principal’, ‘comparison rate’, ‘conveyancing’ and ‘equity’ a lot so it’s worth getting to know them well - and sounding more confident to your bank will also be a point in your favour.
Getting financially ready.
One of the first steps is to sit down with your finances and work out if you're ready to take on a home loan. Conduct a thorough audit of your income and costs over a standard year, as well as your current debt which includes vehicle loans, credit cards, personal loans and HECS. Think about how your income might change over time - are you aiming to step up in your industry or remain at a similar level for the time being? If you’re in the ADF, what do your next moves look like: are you likely to rank up in the next couple of years, or considering going on deployment?
Before approaching a lender, you need to have demonstrated at least three months of consistent saving or paying rent to prove you’re up to the responsibility of a loan. Banks can now also take into consideration your spending habits, so it’s worth keeping eating out and other discretionary spending in line in the months leading up to buying a property.
Once you’ve collated your financials, it’s time to calculate your borrowing power: input your income, costs and debts into our easy online calculator to see the kind of figure a bank is likely willing to lend you, as well as the monthly repayments - giving you a better idea of the budget and location you should be aiming for. Try plugging in different interest rates as well to see how the monthly repayments change - over a 30 year term, rates can shift a lot and could mean a few hundred extra dollars per month.
Find your perfect loan match.
The first time you start looking into home loan options can certainly be overwhelming. Different loans are designed for different types of people, in different financial positions, at different life stages - so there will be one that suits wherever you’re at. From a no-frills loan with a low rate to one that offers greater flexibility, with our range of options there’ll be something for you. If you’re in the ADF, talk to us about the Defence Home Ownership Assistance Scheme (DHOAS) which gives serving members a boost to owning their own home sooner.
Get your savings going.
As a first home buyer, there are assistance programs from federal and state governments that can give you a helping hand. However, even if you qualify for every single one, you’ll still need to provide significant initial investment. For the First Home Guarantee, for example, where you only need to provide a 5% deposit, with the median house price in Australia being over $800k, that deposit is still $40,000 - so it’s still necessary to invest in your savings in the lead up to a house hunt.
You can take steps towards this goal in a number of ways:
- High interest savings accounts - a dedicated savings account with a higher interest rate; get your salary or wages sent directly here to take advantage. Discover how much you can save with our Saving Plan Calculator.
- Term deposits - If you’ve already saved a lump sum, putting it in a term deposit for a year or more will have it working harder for you, while making it difficult to dip into.
- Budgeting - build your savings by curbing unnecessary spending with a household budget that’s tailored for your lifestyle. Start with our Budget Planner.
Consider all costs.
The costs with buying a house add up to more than what the auctioneer shouts out as the gavel comes down.
- The deposit - you may be tired of hearing about it, but the information is still the same: unless you’re part of the First Home Loan Deposit Scheme, you need at least a 20% deposit if you want to avoid the lender’s mortgage insurance (LMI).
- Fees and taxes - from stamp duty, building inspections and removalists, to conveyancing and application fees, there’s a lot to budget for. Get a head start with our suite of handy calculators, like determining stamp duty for a specific house purchase.
- Indirect costs - it’s worth considering the time and effort you spend in the process as a cost, especially if you have kids that need looking after during appointments or inspections and the disruption to your lifestyle or work schedules as a result.
Every little bit counts.
As a first home buyer, make sure to check your eligibility for various home buying schemes or programs that can give you a leg up during the purchasing process or over the life of your loan.
- Home Gurantee Scheme.
This year, the Federal Government is helping first home buyers get a head start by providing only a 5% deposit with no lenders mortgage insurance - but hurry, places are limited. - Defence Home Ownership Assistance Scheme (DHOAS).
If you’re part of the ADF family, you could be eligible for the DHOAS, one of the fantastic benefits of serving. - First Home Owners Grant.
The First Home Owners Grant is a financial helping hand from your state or territory government to help you buy your first home.
Arrange pre-approval.
Getting pre-approval before you start your house hunt in earnest means getting the paperwork for your loan approved, completed and out of the way. As soon as you find the right home, you’ll be ready to go straight away with a fixed maximum you can borrow.
Showing pre-approval to buyers can also give you an edge in the market as it means less waiting around on their end - it’s a win-win.
Frequently asked questions.
With variable interest rates, your repayment amount may increase or decrease in line with changing interest rates. With a fixed interest rate, you have the certainty of both the interest rate and repayment amount staying the same for the fixed period.
You’ll generally need at least 5% in genuine savings, plus enough to cover fees and charges.
If your deposit is less than 20%, Lenders Mortgage Insurance (LMI) may apply.
If you're a first home buyer, you might be eligible for the Australian Government 5% Deposit Scheme, which allows you to buy with a 5% deposit without paying LMI.
Speak to your local Member Relationship Specialist or Mobile Lender to find out more about your options.
Eligibility for a DHOAS certificate is organised directly through the Department of Veteran Affairs (DVA). Once you have your DHOAS certificate, our lenders can help find the best product for you.
