first home loans home loans

First Home Loans

Getting onto the property ladder can be a daunting task but the right home loan can set you on the right path. Some packages include low interest rates, no ongoing fees and smaller first deposits.

So, how do you choose? Start with the table below. Compare the variable and fixed rate home loans currently on offer for first home owners, and make sure the suggested numbers fit your budget

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First home loan comparisons on Mozo - last updated 21 May 2022

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  • Smart Booster Home Loan

    1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    2.24% p.a.variable for 12 months and then 2.73% p.a. variable
    2.72% p.a.

    A super low introductory rate home loan with no monthly or ongoing fees. has some of the fastest settlement times on the market. They can meet 30-day settlement timeline so you can start saving thousands, as soon as possible! Mozo award-winning online lender, friendly and local Australian based team.

  • First Home Buyer Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    2.64% p.a. variable
    2.66% p.a.

    A low variable rate loan for home buyers. No establishment or ongoing fees to pay. 100% offset account included. Allows for unlimited repayments, redraws and flexible repayment options.

  • Variable Home Loan

    <80% LVR, Owner Occupier, Interest Only

    interest rate
    comparison rate
    Initial monthly repayment
    3.09% p.a. variable
    2.52% p.a.

    Rates have moved in line with RBA. Fast online application with no fees. Free extra repayments and redraw facility. Min 20% deposit.

  • Basic Home Loan

    Owner Occupier, LVR<80%, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    2.49% p.a. variable
    2.49% p.a.

    Flexible loan structure – create up to six loan accounts with different rate and repayment types. Free redraw from your loan using Macquarie Online.

  • Variable Home Loan Special

    Owner Occupier, Principal & Interest, LVR <80%

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a. variable
    2.02% p.a.

    Yard’s low-rate variable special home loan is packed with all features – unlimited additional repayments, free redraw, optional 100% offset account. Enjoy a simple online application. Special rate applies to home loan applications submitted by 31st May 2022.

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*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. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.

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First home loans - everything you need to know

Congrats, you've started your journey to purchasing your first home - an exciting time indeed! So what's next?

We understand that purchasing your first home and getting a mortgage can be a daunting prospect, that's why we've created this quick cheat sheet to run you through everything you need to know about getting your first home loan.

We also suggest you take some time to have a read through our First Home Buyers guides hub, as we've developed a number of in depth articles and checklists that cover all the first buyer steps from saving for your deposit, working out how much you can borrow to organising insurance once you've found your dream home.

Show transcript

First Home Loans Video Transcript

What government schemes are out there for first home buyers in Australia?

There are many…

Some are national schemes

But others are state by state

Let’s look at the Australia-wide schemes

The First Home Loan Deposit Scheme

The First Home Owners Grant

The First Home Super Saver Scheme

The First Home Loan Deposit Scheme

Launched in 2020, this scheme sets out to help 10,000 Aussies secure their first home each financial year

Under the scheme, if you are a first home buyer with at least a 5% deposit you can avoid lenders mortgage insurance


The federal government will provide a guarantee to the bank on the remaining deposit requirement of the home loan (up to 15%)

First Home Owners Grant

While the First Home Owners Grant may go by a slightly different same depending what state you are in, it is a national scheme

It was introduced in 2000, and is a one-off lump sum for first time buyers looking to buy a “new” or substantially renovated property

States have different amounts buyers can receive, and in some cases stamp duty will also be waived

The First Home Super Saver Scheme

Started in 2017, this scheme allows you to sacrifice up to $15K of your salary each year towards buying a home

On pay day your employer transfers a portion of your salary into your super fund on top of the 9.5% compulsory contribution

All funds saved through the scheme will only be taxed at 15%, that’s 30% below the marginal tax rate

Just remember, you must opt into the scheme through the Australian Tax Office (ATO)

What other schemes can you look out for?


First Home Transfer Duty Concession

First Home Vacant Land Concession


First Home Buyers Assistance Scheme


First Home Buyer Duty Exemption, Concession or Reduction


First Home Buyer Builder Boost


First Home Owner Rate of Duty


Build Bonus Grant

Territory Home Owner Discount

For more info on first home buyers schemes…

Head to our first time buyers guides page

What home lending jargon do I need to know? 

There's a lot of financial jargon that gets thrown around in the property buying sphere and as a first time borrower it can be a bit daunting. Read on and we'll get you up-to-speed on Australian lending acronyms and the terms you'll need to understand to get a great home loan deal.

Deposits and genuine savings:

The recommended deposit for a property is a 20% down payment, though there are some options for first home buyers to have less (more on this later in the article). Most mortgage lenders now have a mandatory genuine savings policy which means that as an applicant you need to demonstrate that you can save consistently. Genuine savings is classified as having a growing balance (at least 3 months worth) in a savings account, term deposit or managed fund, and not relying on things like a tax refund, government first home buyer grant or gift from family for your deposit.

LVR – Loan to value ratio:

LVR stands for loan to value ratio and the easiest way to explain it is by giving an example. Say you're a first time buyer looking to buy a property for $300,000. If you have saved $30,000 you have a 10% deposit. This means your LVR would be 90% as you are borrowing 90% of the money needed to purchase the property.

The LVR is a way lenders determine whether or not you as a borrower will need to take out lender's mortgage insurance. Any loan with an LVR of 80% or more will require this insurance.

Banks have a range of home loan products and each loan will have different LVR requirements. Generally, loans with an LVR of 80% and under have the lowest interest rates. In the past it was possible for first home buyers to borrow up to 100% of the loan amount but after the GFC lending criteria was tightened and the maximum major banks will now lend is up to 95%.

Lenders Mortgage Insurance:

As mentioned above if your first home loan deposit is less than 20% of the property value, you will have an LVR of over 80% and be required to pay lenders mortgage insurance (LMI), which is added to the cost of your home loan.

Don't confuse LMI with mortgage protection insurance because lenders mortgage insurance doesn't protect you the home loan borrower, instead it protects the home loan lender if you default on your loan. If you want to get protection in case you are unable to make repayments at some point in the future, you should consider mortgage protection or income protection insurance.

Another key aspect of lender's mortgage insurance you should be aware of as a first time buyer is that LMI is not transferable between loans. This means that if in a couple of years, you want to switch to another lender because your current deal isn't as competitive, unless you have got to the situation where you've built up 20% equity in your home, you will need to pay the insurance again. This is a major drawback as it can mean that the cost of paying the insurance a second time is likely to negate any savings you'd make by switching loans.

Comparison Rate: 

You've probably noticed that all advertised home loans display a comparison rate. The comparison rate is a government requirement and it is designed to show you the true cost of a loan. It is not, as many people think, a comparison between say Bank A's interest rate and other home loans. The comparison rate includes the interest rate (the amount you will be charged in interest) as well as any fees that you may have to pay upfront such as application, valuation or ongoing fees for a home loan.

You should use this rate, rather than the headline interest rate, to compare home loans as this will give you a truer indication of how much your loan will cost.

It is important to note however, that the advertised comparison rate displayed is an example only, based on monthly and principal interest repayments on a $150,000 loan over 25 years. If you are borrowing more or less than this, your comparison rate will be different and all lenders will be required to tell you what this will be based on your situation when you enquire about a home loan.

Choosing a home loan, what should I look for?

Now that you're in the know when it comes to bank lending jargon, it is time to run through the key features to look for in a home loan.

  1. Comparing first home loan interest rates  
  2. Between filling out stacks of paperwork to understand a whole new bunch of terminology, buying your first home can be downright stressful. However, one essential step to homeownership is choosing a first home loan with a top notch interest rate. You can compare different home loan interest rates over at Mozo’s Home Loans Interest Rates page.
  3. A great interest rate should be high on your priority list, as the lower your ongoing interest rate, the lower your monthly repayments will be. As a first home buyer you'll have the choice between choosing a variable and a fixed interest rate.

A variable rate home loan means that your interest rate will change in line with the market, so over the loan term your repayments could go up or down. Generally, variable rate home loans have lower interest rates than fixed and also have extra features that help you save money like extra repayments and offset accounts. 

Watch out for ‘introductory’ rates that are low for the first couple of years then skyrocket to a much higher interest rate. While fixed rate loans are great for managing your repayments as they can’t change during the fixed term (usually 1 - 5 years), before signing on the dotted line you should check what the loan’s variable revert rate will be at the end of the fixed term and make sure it’s not excessively high compared with other loans in the market now. The reason is, if you don’t have an LVR of 80% or less at the end of the fixed loan term you will be stuck on this rate as refinancing to another loan would be costly as you’d need to pay LMI again. 

Split rate loans. This is an option on many home loans and it allows you to split your loan between a fixed and a variable rate. Generally, you can nominate the percentage split, e.g. 60% fixed, 40% variable, but there are some lenders that will have a maximum split percentage.

While your LVR can determine which home loan option you will be eligible for, the other factor that can determine which interest rate you are charged will be the amount of money you are borrowing. Banks usually have lower rates for higher value home loans. It is important to realise however that just because it's your first home loan, this doesn't mean that you should accept the advertised rate from a bank or lender. The home loan market is very competitive and lenders are vying for your business so don't be shy in negotiating for a reduction in rates or fees.

Mozo has a free service that can help first home buyers get a better deal on their home loan. Our in-house experts can explain your home loan options, negotiate with banks on your behalf and secure you a top deal. See our home loan negotiator for more info.

Low fees

If you can limit the fees you pay, you can reduce the cost of your home loan. All home loans will have some fees attached so it is about finding a loan that has the least amount of fees for the features you require or the financial situation you're in.

Fees fall into two categories, upfront fees and ongoing fees. Buying a home isn't cheap so if you can limit the amount of upfront fees you can put more money towards things like furniture and appliances for your new home.

Common upfront fees include:

  • application fee. This is a fee payable to the lender to process your home loan application. 
  • valuation fee. This is a fee for the bank to value your property. It is important to
    understand that the bank’s valuation may be different to the price you paid for the property. Some lenders will waive this fee if you proceed through to settlement. settlement fee. This is a fee some banks will charge for their representative to attend settlement.

Ongoing fees:

  • package fee. If you opted for a home loan package which includes things like an offset account, credit card or discounted insurance you will pay a package fee. This will be an annual fee charged every year for the life of the loan. 
  • service fee. This is generally an administrative fee charged by your lender. Some
    lenders will charge this fee monthly or you may pay this fee annually.

There are a number of other fees that you may have to pay depending on your loan. A loan termination or loan discharge fee is a fee payable at the end of the loan to transfer the title into your name.

With fixed rate home loans, if you decide to pay out the loan early you would be up for break cost fees which can be expensive. These fees will be determined by the lender, see our page on fixed rate home loans for more information on break costs.

Flexible features

This is going to be your first home loan and it is likely that in the years to come your financial situation (as well as your personal one, a.k.a kids) will change, which is why you'll want a loan with flexible features that can help you reduce your interest repayments and time it takes to repay your loan and offer some repayment flexibility. However, not all of these features will come 'free' with the loan so if you are not going to use them, then you could be better off opting for a basic home loan with a low rate and less features. Here's the top ones you should look for:

  • Offset account. An offset account is a transaction account that is linked to your home loan. The amount that is in this account is offset against the balance owing on your home loan. 

Here is an example. You have a $350,000 home loan and an offset account with $10,000 in it. Instead of paying interest on the full home loan amount, you only pay interest on $340,000. The more money in your offset the more interest you save so the best way to do this is get your salary or wage deposited into the offset as well as any savings. 

  • Extra repayments. While interest rates are low it is a good idea to make more than the minimum monthly repayment so that you can get ahead on your repayments.

Not only will this save you money in the long run (as it will reduce the amount of interest you’ll pay) over time it will also reduce the time it takes to pay off your home loan. 

  • Repayment holiday. Some home loans have a repayment holiday feature which allows you to take a ‘break’ from making repayments on your loan. This can come in handy at times when maybe one partner isn’t working but it will only be for a limited time. Some loans will also require you to be ahead on repayments to access this feature.

Loan term

The standard term for a home loan is 25 years but most lenders have a maximum loan term of 30 years. As a first home buyer it can be tempting to opt for a 30 year loan term as this will reduce your ongoing monthly home loan repayments but the catch is over the life of the home loan you'll pay more in interest. If you do take out a home loan over 30 years, be sure to get some of the flexible features like free extra repayments and an offset account that will allow you to pay off the loan faster if you are able to.

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JP Pelosi
Managing editor

Jean-Paul (JP) Pelosi is an experienced journalist and editor who has contributed to many of Australia's leading media outlets including The Guardian,,, Investment Magazine and ANZ's Bluenotes. He has also edited news and communications for large financial services companies such as CommBank, Suncorp, Allianz and Amex. He loves a well told story and applying his editorial experience to content that readers both care about and enjoy. JP heads up our writing team.

More First Home Loan FAQs

First home grants and calculators, what do I need to know?

Whether you are borrowing as an individual or you are a joint applicant with a partner, friend or family member, how much you will be able to borrow will depend on your combined income, current assets and liabilities. To get a ballpark for how much you will be able to borrow from a bank or lender, try Mozo's borrowing calculator. Plug in your income and expenses, and it will tell you how much you can afford to borrow at today's average rate and how much your monthly repayments will be.

Another cost you will need to factor in to your home buying budget is stamp duty. This is a fee charged by state and territory governments in Australia. But did you know you could avoid this cost completely if you're a first time buyer eligible for your state's First Home Owner Grant, where you'll receive a one off grant and pay no stamp duty?

If you find you're not eligible for the first home owner grant, then you can use Mozo's first home loan stamp duty calculator which will give you an estimate of how much stamp duty will cost you on your first property.

Am I eligible for a first home loan? 

If you’re over 18 years old, and you’re an Australian citizen or resident who has never owned property in Australia before, you would be considered a first home buyer. That means you would be eligible to take out a first home loan!

But keep in mind the best home loan rates are generally reserved for the best quality borrowers. When deciding whether you’re good quality or not, lenders look at a few things, including how much deposit you have, your credit history, your regular expenses, your savings track record and any other financial commitments you may have. That way, they can determine whether you’re responsible with your money and whether you’ll be able to make your mortgage repayments on time. 

Income is also a big factor in your eligibility as a borrower, and if you're young and just starting out, you may want to check out how much you can borrow on a $50,000 income.

Can I take out a first home loan with bad credit? 

While bad credit won’t completely shut off all your options, you can expect higher interest rates and much fewer home loans to choose from. 

So before you apply for your first home loan, it’s a good idea to obtain a free copy of your credit report to check your credit score. The next step would be to clear all of your debt, including any personal loans or credit card repayments you may have missed, so you can remove the red mark against your name. 

Need help? Check out our guide to paying off credit card debt

Can I refinance a first home loan? 

You can - and it’s also a good idea to review your first home loan a few years down the track to make sure you’re still getting a good deal with low interest rates. The home loans market has become very competitive over the past few years, which means by switching loans and refinancing, you could be saving thousands of dollars. 

If you’re curious about just how much you could be saving, punch in the numbers on our Switch & Save calculator or head over to our refinance home loans comparison table

Where can I compare first home loans? 

Right here at Mozo! Scroll up to the table at the top of the page and start comparing a variety of first home loans to find a deal that suits you. Once you have a more in-depth look at the table, you’ll begin to notice features mentioned in the guide above, including interest rates, comparison rates, fees, as well as additional benefits like free extra repayments and an offset account. 

Select the home loan you want by clicking on the blue “go to site” or green “enquire now” button beside the product of your choice. You’ll then have the opportunity to apply for the loan through the lender’s site. 

How can I apply for a first home owners loan? 

Start by preparing your documents and getting all the paperwork ready. Requirements will vary from lender to lender, but typically you’ll be asked to provide: 

  • 100 points of ID
  • proof of income
  • details of your assets and liabilities 

You’ll also need a clean credit record, although bad credit won’t necessarily rule you out. 

If you’re an eligible first home buyer, it’s a good idea to complete your First Home Owner Grant application before applying. 

And if you’ve decided to take out your first home loan with a guarantor, make sure they also have their documents prepared, including identification, income, assets and liabilities. 

You’ll be able to apply for most first home loans online - some can take as little as a few minutes. 

So when you’re ready, simply click on the blue “go to site” or green “enquire now” icon next to the home loan you’ve chosen to go with. You’ll already be one step closer to owning your first property ever! 

What other costs should I budget for? 

When working out how much to budget for your first home, you’ll also have to factor in government costs like stamp duty, which you are required to pay for any property you purchase in Australia. Stamp duty varies according to which state you’re in and what house you’re buying, so be sure to check out our stamp duty calculator to get an estimate today. There may also be some stamp duty concessions that you’re eligible for as a first home buyer, so look at what’s available where you live.

And if you’ve saved less than 20% deposit, you’ll usually have to pay lender’s mortgage insurance, which could add up to thousands of dollars depending on your deposit amount and the price of the house you’re buying. You can either hand over the money upfront or add the cost to your home loan - although keep in mind that putting the cost of LMI on your home loan will increase the amount of interest you repay over the life of the loan.

Home Loan Reviews

Westpac Fixed Options Home Loan
Overall 1/10
Poor customer service and worst bank in Australia

Never trust the banking app and the repayments requirements for a loan through the app. Never contact the customer for missed or shortfall in repayment. The bank will let it go until it damages your credit rating. Worst customer service.

Read full review

Never trust the banking app and the repayments requirements for a loan through the app. Never contact the customer for missed or shortfall in repayment. The bank will let it go until it damages your credit rating. Worst customer service.

Customer service
Jijin, New South Wales, reviewed 19 days ago
Bankwest Complete Fixed Home Loan (Package)
Overall 10/10
The best bank

I came over to BankWest 6 months ago and it is the best decision I made. Easy online banking, amazing service, great home loans, the best online chat assistance. The best bank, totally recommended.

Read full review

I came over to BankWest 6 months ago and it is the best decision I made. Easy online banking, amazing service, great home loans, the best online chat assistance. The best bank, totally recommended.

Customer service
Bee, New South Wales, reviewed 21 days ago
ANZ Home Loan
Overall 7/10
Smooth process and good customer service

Smooth process and good customer service

Read full review

Smooth process and good customer service

Customer service
Cindy, New South Wales, reviewed 23 days ago

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