Compare 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. Compare the variable and fixed rate home loans currently on offer for first home owners, or read our helpful first time buyer guides that cover everything you need to know from govt grants, stamp duty and the features that can help you pay the loan off faster.

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First home loan comparisons on Mozo - last updated 22 February 2024

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  • Mozo Expert Choice Badge
    First Home Buyer Loan Special

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    5.90% p.a. variable
    5.93% 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.

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  • Basic Home Loan Special Offer

    Owner Occupier, Principal & Interest, LVR 80-95%

    interest rate
    comparison rate
    Initial monthly repayment
    6.69% p.a. variable
    6.70% p.a.

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  • FHBG Special Offer Classic Home Loan

    interest rate
    comparison rate
    Initial monthly repayment
    6.24% p.a. variable
    6.26% p.a.

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  • Basic Variable Home Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    5.94% p.a. variable
    5.99% p.a.

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  • First Home Buyer Variable Home Loan

    Advantage Plus, Owner Occupier, Interest Only, LVR >90%

    interest rate
    comparison rate
    Initial monthly repayment
    6.24% p.a. variable
    6.87% p.a.

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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.

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First home loans - everything you need to know

Purchasing your first home can be both exciting and terrifying, and between finding the right property and submitting loan applications there’s plenty to get overwhelmed by. Below, we run through everything you need to know to make sure you put your best foot forward.

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

How?

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?

QLD

First Home Transfer Duty Concession

First Home Vacant Land Concession

NSW

First Home Buyers Assistance Scheme

VIC

First Home Buyer Duty Exemption, Concession or Reduction

TAS

First Home Buyer Builder Boost

WA

First Home Owner Rate of Duty

NT

Build Bonus Grant

Territory Home Owner Discount

For more info on first home buyers schemes…

Head to our first time buyers guides page

What to look for in a home loan

Low interest rates

A competitive 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 of paying either a variable or 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 and come with features that can help you save money (such as offset accounts and the ability to make extra repayments). 

Fixed rate home loans, on the other hand, lock your interest rate for a set period of time (usually between one and five years). While these can be great for managing your repayments, they usually come with fewer features and you could face hefty break fees if you plan to exit your loan early.

If you can’t decide between the two, you can opt for a split home loan. This lets you divide your loan into two accounts, one with a fixed rate and the other with a variable rate. Generally, you can nominate the percentage split, e.g. 60% fixed, 40% variable.

Low fees

If you can limit the fees you pay, you can reduce the overall cost of your home loan (freeing up your budget to buy furniture and appliances for your new home). Fees can fall into two categories: upfront fees and ongoing. 

Upfront fees include:

  • Application fees: payable to the lender to process your home loan application 

  • Valuation fees: payable to the lender to value your property. Some lenders will waive this fee if you proceed through to settlement

  • Settlement fee: covers the cost of establishing your loan

Ongoing fees include:

  • Package fees: if you opted for a home loan package (which includes things like an offset account, credit card or discounted insurance) you might have to pay a package fee. This will be an annual fee charged every year for the life of the loan

  • Service fees: administrative fees payable to your lender, which can be charged monthly or annually

  • Offset account fees: some lenders will charge a monthly fee for use of an offset account

There are a number of other fees that you may have to pay depending on your loan. These might include loan termination or loan discharge fees, which are payable at the end of the loan to transfer the title into your name.

If you have a fixed rate home loan, switching to another loan or even paying out your loan early will incur a break fee. The exact amount will be determined by your lender, who will take into account any outstanding balances, how much time is left on your loan, and whether interest rates have changed since you signed up.

Flexible features

You don’t want your first home loan to feel stifling, so make sure you keep an eye out for any features that will make the path to home ownership much smoother. Here are a few of the main ones.

  • Offset account: a transaction account that is linked to your home loan. The amount in this account is offset against the balance owing on your home loan. For example, if you owe $350,000 and have an offset account with $50,000 in it, you’ll only pay interest on $300,000.

  • Extra repayments: paying more than the minimum amount required by your lender can save you thousands in the long run and shave years off the life of your home loan.

  • Redraw facility: many home loans that allow extra repayments come with a redraw facility. This lets you retrieve any extra funds you’ve contributed to your mortgage to use for other purposes.

  • Repayment holiday: some home loans let you hit pause on your repayments, which can come in handy if you’re experiencing a temporary setback or have to cover a surprise expense. Generally, you will need to be ahead on your repayments to make use of this feature.

Depending on your lender, not all of these features will come free with the loan. So if you don’t plan to use them, consider opting for a no-frills home loan with a lower rate.

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 the longest possible term as this reduces your ongoing monthly repayments, but the catch is you'll pay more in interest over the life of the loan. 

What terms 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 buyer it can all be a bit confusing. Below, we’ve outlined some of the main terms you'll need to understand to get a great home loan deal.

Deposit

The deposit is the initial contribution you make towards your home purchase. It’s recommended that borrowers have at least 20% of a property’s value saved up for a deposit, though there are options for those who fall short of that requirement. 

Loan-to-value ratio

Your loan-to-value ratio (LVR) is the amount you plan to borrow as a percentage of the total value of the property. 

For example, say you’re looking to buy a property valued at $500,000. If you have saved up 10% of the purchase price ($100,000), you will have to borrow the remaining 80%. This means you’ll have an LVR of 80%.

In the past it was possible for first home buyers to borrow up to 100% of the loan amount but lending criteria was tightened following the GFC and the maximum amount major banks will now lend is up to 95%.

Lenders Mortgage Insurance

Borrowers who don’t meet lenders’ LVR requirements will have to purchase lenders mortgage insurance, which covers the home loan lender if you wind up defaulting on your loan. It shouldn’t be confused with mortgage protection insurance, which protects the home loan borrower.

Just keep in mind that LMI is not transferable between loans. This means that if you want to switch to another lender, you’ll need to have built up 20% equity in your home or you will have to pay the insurance again. This can negate any savings you'd make by switching loans.

Genuine savings

Most mortgage lenders have a mandatory genuine savings policy, which means that as an applicant you need to demonstrate that you can save consistently and without outside assistance. 

That means having a growing balance (at least three months worth) in a savings account, term deposit or managed fund, and not relying on things like a tax refund, government first home buyer grants, or gifts from family members.

Comparison Rate

The comparison rate combines the interest rate (the cost of borrowing) with any fees that you may have to pay upfront, such as application, valuation or ongoing fees for a home loan. 

In essence, the comparison rate gives you a more accurate picture of how much your loan will cost, and banks and lenders are required by law to list it wherever their home loan interest rates are advertised.

It’s important to note, however, that the comparison rate displayed by a bank is just an example, and it’s typically based on monthly and principal interest repayments on a $150,000 loan over 25 years. If you’re borrowing more or less than this, your comparison rate will be different.

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JP Pelosi
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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, News.com.au, Domain.com.au, 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 Home Loan
Overall 1/10
Avoid Westpac at all costs

Westpac have proven to be completely incompetent, lied and their customer service is as poor as I've ever experienced. Even a complaint direct to the Managing Director proved a total waste of effort, as she never had the courtesy to even respond. Australia's worst bank.

Read full review

Westpac have proven to be completely incompetent, lied and their customer service is as poor as I've ever experienced. Even a complaint direct to the Managing Director proved a total waste of effort, as she never had the courtesy to even respond. Australia's worst bank.

Price
2/10
Features
3/10
Customer service
1/10
Convenience
7/10
Trust
1/10
Less
Ian, Victoria, reviewed 2 days ago
Macquarie Offset Home Loan (Package)
Overall 10/10
Great service and comparable rates

We have been with Macquarie for over a year and a half. We have our mortgage with them and combined offset bank accounts. They are very competitive in terms of their interest rate. They have great customer service and good services. We like the fact that we can have up to 7 separate offset accounts which we use to put separate savings aside for. We haven’t had any issues however I know their customer service is great.

Read full review

We have been with Macquarie for over a year and a half. We have our mortgage with them and combined offset bank accounts. They are very competitive in terms of their interest rate. They have great customer service and good services. We like the fact that we can have up to 7 separate offset accounts which we use to put separate savings aside for. We haven’t had any issues however I know their customer service is great.

Price
10/10
Features
10/10
Customer service
10/10
Convenience
10/10
Trust
10/10
Less
Tanya, Western Australia, reviewed 2 days ago
Westpac Rocket Repay Home Loan
Overall 10/10
Where else but Westpac..

Was going to leave the bank for better rates. Retention office made contact with us and provided interest rates much lower than all other banks. Now, I make contact annually direct to the retention office to try and get a better deal. Easy to deal with, contact was immediate by either phone or email. Initial set up of homeloan in branch was easy and Westpac employee was extremely helpful and genuinely wanting to help.

Read full review

Was going to leave the bank for better rates. Retention office made contact with us and provided interest rates much lower than all other banks. Now, I make contact annually direct to the retention office to try and get a better deal. Easy to deal with, contact was immediate by either phone or email. Initial set up of homeloan in branch was easy and Westpac employee was extremely helpful and genuinely wanting to help.

Price
10/10
Features
10/10
Customer service
10/10
Convenience
10/10
Trust
10/10
Less
Renee, Victoria, reviewed 2 days ago

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