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- First Home Buyer Grant
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- Investing In Property
- What To Consider Before Buying
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- Renovating vs Buying a New Home
- Home Loans Comparison Guide
- Home Loan Application Checklist
- 10 Mortgage Repayment Tips
- About Home Loans
- Home Loan Lenders
- No Deposit Home Loans
First Home Buyers
Purchasing your first home can be exciting and overwhelming in equal measures. Between saving for a deposit, researching different types of home loans and deciding where to buy, there are a lot of things to do.
Here we’ve laid out what you need to know when it comes to finding the property of your dreams, and the right home loan to go with it.
Buying a home – where do I start?
One of the most important first steps when you’re looking to buy a home is knowing what you can afford. Use iSelect’s Borrowing Power Calculator to work out an approximate figure based on your income, regular expenses and how many dependants you have.
How much deposit do I need?
Another important first step in the home-buying process is saving for a deposit. Generally, the more money you’re able to put down the better, but you may be able to fast-track your dreams of home ownership through a low deposit home loan.
- From five to 15 per cent deposit. You may be able to get a home loan with five per cent of the property price as your deposit. However, your lender will still expect you to be able to cover stamp duty and other costs, and you may have to undertake Lenders Mortgage Insurance (LMI), which protects the lender if you default on the loan.
- At least 20 per cent deposit. The higher your deposit, the better – aiming for 20 per cent is a good start, but you may need up to 35 per cent to cover additional fees in order for you to avoid paying LMI. Having a bigger deposit could potentially also put you in a better position to negotiate with your lender and open up a range of low interest rate home loans.
Alternatively, you may be able to purchase a property with no deposit and without having to pay LMI if you have someone to act as guarantor on your home loan. In this case, your guarantor would be liable for an agreed, guaranteed amount in the event that you default on the loan.
However, the guarantor would need to have sufficient equity in their home loan so they don’t incur LMI when supporting the guarantee. Learn more about no deposit home loans.
How does the First Home Owner Grant work?
The First Home Owner Grant (FHOG) is a one-off, tax-free grant paid to Australian citizens or permanent residents who are buying their first home in Australia. It can be very useful in covering some of the cost of stamp duty. Each state and territory has their own cap on the maximum house price for FHOG eligibility.
Buying your first home is easier with the right support. Call 13 19 20 to speak to an iSelect broker today.