Ready to buy your first home but don’t know where to start? You’re in the right place. We’ve been awarded the Mozo Expert’s Choice Award in the First Home Buyer Loan category, so we know a thing or two about getting you into your first home sooner. From choosing where to live to navigating your eligibility for government support, here’s your comprehensive guide to buying your first home.
Award winning home loan for first home buyers
First Home Loan Deposit Scheme Variable Rate Product
Before you apply
Are you eligible for the First Home Loan Deposit Scheme? It’s an Australian Government initiative to support eligible first home buyers purchase a home sooner without having to pay lender's mortgage insurance.
You might also be eligible for the First Home Super Saver Scheme, which allows you to save money for your first home inside your super fund by making voluntary contributions, and then access up to $50,000 of those voluntary contributions to put towards your deposit.
Whether or not you are eligible for either of the above schemes you may be eligible for a state based support program for first home buyers (it is possible to be eligible for more than one scheme). For more information you can visit the relevant link below for where you are considering buying your first home.
Check your eligibility for government support
Basic Variable Home Loan
Interest rates3 from 2.99%p.a.
Comparison rates2 from 3.02%p.a.
2 Year Fixed Home Loan
Interest rates3 from 5.09%p.a.
Comparison rates2 from 5.13%p.a.
3 Year Fixed Home Loan
Interest rates3 from 5.69%p.a.
Comparison rates2 from 5.30%p.a.
Make an appointment with a MyState Bank lender to start your application
We’d love to help you get started on your application.
We’re here to help with expert home loan advice, support and all the tools to make buying your first home easier. From choosing where to live to navigating your eligibility for government support, here’s your comprehensive guide to buying your first home.
Setting your goals
Setting goals is arguably one of the most important steps when planning to buy your first home. As one of the most expensive and significant purchases you make in your life, it pays to be as prepared and informed as possible.
Many people begin by setting financial goals and developing money management strategies, but sometimes the best place to start is with you.
- Are you familiar with any Federal or State-based incentives for first home buyers and checked whether you are eligible?
- What are your personal goals?
- Why do you want to buy a home?
- Does your life plan include a big family and an even bigger family home?
- Do you have a partner? Are you buying together?
- Do you see yourself travelling overseas?
- Are you career focused?
- Could a job opportunity take you to the other side of the globe?
- Perhaps you want to be self-employed?
These things will not only help you determine what kind of home you might like to buy, but also what approach to home ownership you will take. You may wish to be an owner-occupier, and live in the home you purchase straight away, or you may wish to invest in property and rent it out.
Whatever you decide, the best thing you can do is think about your current life stage and your immediate, medium and long-term needs. Buying now with an eye for the future can save you money in the long run.
Of course, even with thorough research, you can’t plan for everything in life, but mapping out these scenarios will help you find the best property ownership approach for you.
Register your interest for the First Home Loan Deposit Scheme by filling out the online form here.
How much can I borrow?
Before you start searching for your home, it’s very important to know your price range and how much you feel comfortable spending. Use our borrowing power calculator to estimate how much you can afford to borrow as a starting point.
Of course, if you find yourself in a position to borrow more than you first thought, it doesn't necessarily mean you should. While there is no right or wrong answer to how much you should spend on your first home, it’s important to ask yourself how comfortable you feel about entering into a long term home loan agreement and how much you can actually afford to spend. Remember, you have to keep living too!
Do your home loan repayment sums in relation to your overall budget. Factor in your living expenses and any additional loans or credit card debts you have to pay. It’s always better to over budget so you've got the flexibility to cope with any changes that might come your way – changes in interest rates, renovation or unexpected repair costs, or loss of income due to illness or injury. The more you've got up your sleeve, the less stressed you’ll be in the event something happens.
You can use our helpful budgeting calculator to help keep track of all your spending.
Saving for a deposit
Saving for a deposit can be a daunting process, and sometimes it can feel like you might never reach your goal. That’s why we've put together some helpful tips to keep you motivated and on track to get into your first home.
How much should I save?
Once upon a time, a deposit of 20% of the purchase price was necessary to secure a home loan. Now, with the availability of Lenders Mortgage Insurance - insurance that protects your lender in the event you can no longer pay off your loan - the deposit amount required is much less strict, at a minimum of 5% of the value of the home.
We recommend you aim for around 10% as a starting point, so you can set a savings goal. The more you save, the less you have to borrow, and the less you’ll pay in interest over the life of your loan.
You will also need to cover all the additional costs associated with buying a home, like stamp duty and legal fees.
How do I stay on track?
Saving a deposit is often the hardest part of your first home buyer journey. It takes the average Australian First Home Buyer four years to save a deposit for a house, and that’s a long time to stay motivated and stick to your goals.
It may seem like an impossible task at first, but if you break it down into small and achievable goals, we guarantee you’ll get there quicker than you think.
Tips for saving a deposit
- Create an automatic savings plan – Set up a high interest savings account, like our Bonus Saver Account where you can earn bonus interest, and aim to save 10% of your pay every time it comes in. By automatically moving money over every time you get paid, you’re less likely to spend it on things you don’t need.
- Pay off your debts – Reducing any debt like credit cards and personal loans may not sound like the fastest way to save, but it’ll save you from paying interest and free up more of your income in the long run. Plus, making regular repayments on other loans puts you in a good position when it comes to formally applying for your home loan.
- Decide what you can live without – You don’t have to give up everything, but making some small sacrifices can really add up when it comes to saving for your deposit. If you find it difficult to cut things like going out for dinner, buying new clothes or cable TV out of your life completely, try eliminating them for just one month at a time. For example, take your lunch to work every day one month, then vow not to buy new clothes the next. It all adds up
- Sell what you don’t need – We've all got unworn clothes or old furniture laying around, so why not make the most of them and sell them on eBay or host a Garage Sale for some much needed extra funds? You could be hoarding hundreds of dollars worth of unused items without even realising.
- Review your statements regularly – Knowing exactly what you spend your money on helps you determine which areas you can free up a little extra cash.
- Make a budget and stick to it – Use our budget and savings calculators to help you map out your regular payment commitments like phone bills and insurance, so you know how much money you've got left for everything else.
Need help to make the great Australian dream a reality?
Whether you’re buying your first home or just need a little help getting into your next home, a Parental Guarantee can help you get there sooner.
Find out more
Choosing a home
Choosing your first home should be fun, not stressful. Once you've sorted out how much you can afford to spend, the next step is to think through what you’re looking for in a property, and try to match that with what’s actually in the market. Here are some things to consider when looking for the right home.
- What locations appeal to you and why?
- What are the key features you’re looking for in a home? e.g. a modern kitchen, lots of storage space, big backyard etc.
- How many bedrooms do you need? What about in 5 to 10 years time?
- If you’re investing, what features will appeal to your tenants?
- Is there public transport nearby, or a garage for your car?
- Do you want to be close to schools, cafes and shops?
- Do you have children or pets that might prevent you from living on a main road?
- What are the people in your neighbourhood like?
- If something isn't quite right, are you able to renovate it? And do you have the funds to do so?
From here it’s great to make a list of things you are and aren't willing to compromise on. You may not be able to find a house that ticks all of your boxes and is still in your price range, but prioritising your needs will help you make sure you get as close to the perfect home as possible.
Where do I start looking?
There are a number of websites and property sections in the newspaper that can help make your search for the perfect home a little easier. Check out the websites below as a starting point.
Of course, while online research is a helpful first step in your property search, the best way to get a feel for a property is by attending open house inspections and auctions. You can also talk to your local real estate agent about your needs.
As you search for the right home, you may wish to access some more detailed information about a specific property, suburb or recent sales prices for similar homes in similar areas. There are a number of reports you can access to help you get the information you need.
You can also purchase property reports from real estate data companies such as RP Data, APM and Residex. They’ll generally give you sales data for your chosen suburb over the last 12 months, as well as previous sales prices for a specific property address. In most cases, you’ll be able to preview a sample of the report, so you can see what kind of information it contains before you purchase it.
Choosing a loan
When deciding on a home loan, it’s important to choose one that’s right for you. In addition to comparing rates and product features, you also want to think about what it will take for you to become debt free sooner, and to pay as little as possible in interest and other charges.
Types of loans
With a variable rate home loan, your interest rate fluctuates as the market does. The Reserve Bank of Australia’s monthly Official Cash Rate announcements, along with local and global economic decisions all influence a financial institutions’ decision to shift or hold rates.
With a fixed rate home loan, you can lock in your interest rate for a specified term, usually 1, 2 or 3 years. This can give you certainty when it comes to repayments, as you know they won’t change, even if the interest rate does.
With an Interest Only home loan, you can repay only the interest on your loan for a specified term, usually up to 5 years, reducing your monthly repayments and maximizing your tax benefits.
Features to consider
Every home loan is different, and there are a range of features and benefits to consider before you decide on the right one. Here are just a few that will help you determine which loan is right for you.
- Home loan repayments – Look for a loan that gives you flexibility with your repayments. Most loans let you choose between weekly, fortnightly and monthly repayments, giving you the freedom to pay off your loan in a way that suits you
- Additional repayments – Some loans charge you an additional fee for making extra repayments. If you think you will be able to make extra lump sum contributions to your loan every once in a while, look for a loan that lets you do this for free so you can get ahead faster and don’t forget, making repayments more frequently e.g. fortnightly or weekly can help you pay off your loan sooner
- Fees – When it comes to managing your home loan, you want to pay as little in fees as possible. As well as being able to make additional repayments fee free, look out for things like establishment fees, account keeping fees and early payout fees. You want the freedom and flexibility to pay off your mortgage as you choose (while meeting your monthly minimums of course), so it’s important to look for loans that won’t charge you for getting ahead on your mortgage.
- Offset Account – An offset account is an everyday savings or transaction account that is linked to your home loan account. The money in your offset account is used to offset the amount of your loan, helping you to reduce the life and cost of your loan, without tying up all your funds. For example, if you have a loan amount of $250,000 and an additional $15,000 in your linked offset account, you’re only charged interest on $235,000 of your loan amount.
- Redraw Facility – With a home loan redraw facility, you can access any additional funds you’ve deposited into your home loan account. This means any lump sum repayments you make on top of your regular monthly repayments are not only helping you pay off your home loan sooner, but can also make budgeting easier when life’s little extras, like Christmas presents or renovations, pop up.
- Loans for First Home Buyers – There’s no doubt that buying your first home is as exciting as it is challenging. There is so much information to sift through, not to mention the home loan application itself. Our local home loan experts are there to help you every step of the way. Not only do they offer helpful, expert home loan advice, but they also help you to set and achieve realistic goals. They can tell you everything you need to know about the First Home Owner Grant, budgeting, and all the ins and outs of buying a home, like insurance, stamp duty and legal fees.
Something to consider when buying your first home is how you’re going to protect it. We have a range of insurance products to help you get the cover you need, from Home and Contents Insurance, to Landlord Insurance, to Loan Protection Insurance, which helps protect your loan repayments in the event of illness or injury.
Applying for pre-approval
Having a pre-approved ‘yes’ from MyState gives you the ability to say ‘yes’ too. Pre-approval allows you to make an offer quicker, with the confidence of knowing exactly how much you can afford to spend. To find out more about home loan pre-approval make an appointment online with your local lending expert today.
The application process
Applying for a home loan with MyState is easy, and we’ll keep you up to date with what’s happening every step of the way. Check out our step-by-step guide to the application process below.
Download our home loan checklist to help you get your documents ready, then drop into your nearest branch or call 1300 092 468 to begin the application process. We’ll process your loan application on the spot, subject to an employment check, valuation & lender’s mortgage insurance. You’ll have a decision on your home loan within 60 minutes, guaranteed.
We’ll check your documents, including your employment history, to verify that they’re all correct.
We’ll order a valuation to verify the value of your preferred property. The valuer will get in touch with the real estate agent directly and arrange the valuation; then report back to us.
If it’s required, we’ll apply for Lender’s Mortgage Insurance. If you have a sizeable deposit, you may not need it. We’ll let you know either way.
At this stage, once your details have all been verified, the valuation is satisfactory and mortgage insurance (if required) approved, we’ll unconditionally approve your loan, which is a 100% guarantee that we’ll be financing your home loan.
At this stage, your loan will be opened, and the arrangements to book settlement will be made with your conveyancer and settlement will take place at an agreed time.
MyState Bank Home Loan Products
Basic Variable Home Loan
Simple and to the point. Save money with a great low rate.
Special Residential Home Loan
A 100% interest offset facility. Reduce the amount of interest you repay.
Frequently Asked Questions
You need to be
- At least 18 years old
- An Australian citizen or permanent resident
- Applying in your own name
- Have a good credit rating
You will need to have
- Two forms of ID (driver's licence, Australian passport or Medicare card)
- Two payslips (if you have an employer)
- Your most recent tax assessment (if you are self-employed)
A little bit of time
- About 20 minutes
You can give yourself the best chance possible by:
- Work out your borrowing capacity, what repayments can you afford? We will use a range of criteria to decide how much you are eligible to borrow, but you need to be comfortable that you can afford to repay the loan.
- Establish a good banking history, keep your accounts in good order.
- Keep your credit rating in good standing by staying on top of payments to avoid arrears, debts or missed payments.
- Save money, demonstrating your ability to save regularly shows a history of managing money responsibly.
1 Interest rate available on owner-occupied, principal and interest loans less than 80% of property value. Other rates available for different loan terms.
2 Comparison rate based on $150,000 over 25 years. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Lending, credit criteria, terms/conditions, fees and charges apply and are subject to change.
3 Interest rate available on owner-occupied, principal and interest loans for eligible borrowers under the First Home Loan Deposit Scheme only. Other rates available for different loan terms.
4 Interest rate available for new lending on owner-occupied, principal and interest loans less than or equal to 60% of property value. Other rates available for different loan terms.