Buying your first home is an exciting but big step, one that comes with many questions and decisions. The first big question is how much you can borrow and your likely repayments.

That’s where we can help. We’ll do the legwork for you, comparing home loans across a variety of products available from Australia’s leading lending institutions.

And because you’re a first-home buyer, you may be eligible for a first-home buyer grant. This grant may be available to Australian citizens or permanent residents who wish to buy or build their first home, which will be their principal residence within 12 months of settlement. As grant conditions vary from state to state, contact us to learn more about your state’s eligibility requirements and how much grant money you could receive. 

We will also liaise with the lender. It’s our job to do the hard work, so you can focus on finding the right home for you. We’ll be there every step of the way to guide you through the entire home loan process—from application to approval.

Need help understanding the process? Read our FAQ for first-home buyers to help you get the answers you need.

How much money can I borrow?

This is a great place to start. The amount you can borrow will be based on your unique financial circumstances. Your income, assets, liabilities, and credit history can all affect your borrowing power. Each lender will have a different set of criteria. We can assess your circumstances and help provide you with an idea of how much you can borrow.

Which loan is right for me?

Better Choice Mortgage can help you find the loan that will best suit your needs. The structure of your home loan has a massive impact on the wealth you create through property.

At Better Choice Mortgage, we are passionate about being strategic and helping you get the perfect home loan for your unique circumstances.

How much money do I need for a deposit?

The deposit you’ll require depends on the type of home loan, the strategy, and the lender you select.

However, a first-time home buyer typically needs 5 – 10% of the purchase price as a deposit.

What fees/costs should I budget for?

There are several fees and costs involved when buying a property. To help avoid any surprises, the list below sets out many of the usual costs:

• Stamp duty — This is the big one. All other costs are relatively small by comparison. However, First Home Buyers are exempted from Stamp Duty under certain property price thresholds. Stamp duty rates vary between state and territory governments and depend on the property value you buy. You may also have to pay stamp duty on the mortgage itself. To estimate your possible stamp duty charge, visit our Stamp Duty Calculator.
• Legal/conveyancing fees — Generally around $1,000 – $1500, these fees cover all the legal requirements around your property purchase, including title searches.
• Building inspection — This should be carried out by a qualified expert, such as a structural engineer, before you purchase the property. Your Contract of Sale should be subject to the building inspection, so if there are any structural problems you have the option to withdraw from the purchase without any significant financial penalties. A building inspection and report can cost up to $1,000, depending on the size of the property. Your conveyancer will usually arrange this inspection, and you will usually pay for it as part of their total invoice at settlement (in addition to the conveyancing fees).
• Pest inspection — Also to be carried out before purchase to ensure the property is free of problems, such as white ants. Your Contract of Sale should be subject to the pest inspection, so if any unwanted crawlies are found you may have the option to withdraw from the purchase without any significant financial penalties. Allow up to $500 depending on the size of the property. Your real estate agent or conveyancer may arrange this inspection, and you will usually pay for it as part of their total invoice at settlement (in addition to the conveyancing fees).
• Lender costs — Most lenders charge establishment fees to help cover the costs of their own valuation as well as administration fees. We will let you know what your lender charges but allow about $600 to $800.
• Moving costs — Don’t forget to factor in the cost of a removalist if you plan on using one.
• Mortgage Insurance costs — If you borrow more than 80% of the property’s purchase price, you’ll also need to pay Lender Mortgage Insurance. You may also consider whether to take out Mortgage Protection Insurance. If you buy a strata title, regular strata fees are payable.
• Ongoing costs — You must include council and water rates along with regular loan repayments. It is important also to consider building insurance and contents insurance. Your lender will probably require a minimum sum insured for the building to cover the loan.

What is the first homeowner grant (FHOG) and am I eligible for it?

The FHOG scheme is a national scheme funded by the Federal Government but administered through each state or territory Revenue Office. Available amounts range from $7,000 to $26,000 and differ from state to state. To be eligible for the first homeowner grant, you and your spouse should not have previously owned a home or claimed the grant.

For more information, visit – Home Guarantee Scheme

Eligibility Tool 

Can I get the first homeowner grant if I buy a joint property?

If you’re buying a property with someone else, you can still get the first homeowner grant, provided all the co-purchasers are eligible to receive it.

How much stamp duty will I need to pay?

Stamp duty is a tax all Australian states and territories charge on property purchases. The stamp duty a buyer pays is based on the property purchase price, location, and loan purpose. Some states charge different rates on investment properties than on places of residence.

Use our stamp duty calculator  to understand what you will need to pay.

How is interest calculated?

This is determined by your lender and loan contract.

Typically, the interest cost of your loan is calculated daily on the outstanding balance.

For example: daily interest on a $300,000 loan with a standard variable rate of 7% p.a. Is:

($300,000 x 7%) ÷ 365 = $57.53

Most loan types require the actual loan amount (principal) also to be paid back.

This amount will be added to the interest payment. Use the Better Choice Mortgage Loan Repayment Calculator to find out your repayments.

What’s the difference between ‘principal and interest’ and ‘interest only’ repayments?

Principal and interest simply means that you pay a portion of the loan balance in addition to the interest charged over the agreed period.

You essentially pay back the loan over the term of the mortgage. Your repayments also include part of the loan and part of the interest on the loan.

Interest only is when you’re paying the interest on the balance with no principal over an agreed period.

What is redraw?

Some mortgages allow you to make additional payments on your mortgage, over and above the amount that you are required to pay and have already paid into your mortgage. This means that there may be additional money that you can redraw from your mortgage.

Each lender is different, and many loan products differ, but your lender may allow you to withdraw the extra funds.

What is an offset account?

An offset account is a transaction account linked to your mortgage, where cash parked in this account ‘offsets’ (reduces) the amount of interest payable on your mortgage.

This is a popular strategy and can help you pay off your home loan more quickly.

What is the difference between offset and redraw?

When you make additional payments above the minimum amount into your mortgage to reduce the interest calculated, it goes into ‘redraw’. Depending on the lender, these extra payments can be accessed, or drawn on at any time, but if you do access those extra funds, it will affect the balance of your mortgage and interest payable.

Your offset is when you hold these additional payments in a separate transaction account – you aren’t reducing the balance of the loan but you’re still getting interest reductions, enabling you to pay off your home loan sooner.

What is a line of credit loan?

A line of credit is a flexible loan allowing you to draw down and repay smaller or larger sums at any time up to an approved limit. These loans have an agreed term and repayments are interest only, based on the amount you have drawn down at the time.

What is Lenders Mortgage Insurance?

Lenders Mortgage Insurance is insurance you’ll pay to the lender if you borrow more that 80% of the value of your property.

It’s the insurance the lender takes out for the mortgage to protect itself, but it also allows the borrower to get into the market with a smaller deposit.

The bigger the deposit you have, the less your lenders mortgage insurance will be.

Depending on the loan type and amount, some lenders will allow you to add the cost of this insurance onto the loan so that you don’t have to find the money upfront to pay for it.

Do I need a solicitor or a conveyancer?

Every buyer should have a solicitor or conveyancer. Once you’ve found a property, the agent should send the contract of sale to your solicitor or conveyancer for review.

They will also help with the settlement process and exchange of title documents.

How long does settlement usually take?

Settlement time varies with every sale individually; however, four to eight weeks is normal.

The settlement period is negotiated between buyer/seller and can be affected by the lender’s and buyer’s ability to complete requirements prior to settlement.

What does a strata report provide?

A strata report applies when buying a unit, town house or when there’s common property managed by a strata scheme.

It usually gives you the following information:

Whether or not the strata scheme is adequately insured

Any regular or special levies

What renovations and maintenance have been completed

• Any evidence of potentially expensive building or structural problems that need fixing.
• Whether or not the strata scheme has an adequate reserve of funds
• Evidence of how well owners work together to maintain the property.
• Any strata regulations relating to renovations, refurbishment, or pet ownership.

What is a contract of sale?

Every property sale requires a contract of sale, which is a legal document between the seller (vendor) and buyer (purchaser) and includes the agreed sum.

The contract of sale often includes: a sewage diagram, a copy of the certificate of title for the property, a zoning certificate from local council and copies of documents relating to any other registered interests over the property.