Don’t know what you need to apply for a home loan today? If you’re thinking about buying a home, here’s a simple guide to help you understand the key requirements and how to prepare.

1. How Much Deposit Do You Need?

Your deposit is one of the first things lenders look at:

  • Standard Deposit: Most banks want at least 20% of the property’s value to avoid extra costs like Lenders’ Mortgage Insurance (LMI).
  • Low-Deposit Options: Some lenders accept as little as 5% for first-home buyers, but you might have to pay LMI. Learn more about LMI here.
  • Help from the Government: Programs like the First Home Guarantee let eligible buyers use a smaller deposit without paying LMI.

2. Your Credit Score Matters

Lenders use your credit history to decide if they’ll approve your loan:

  • Good Credit Score: A score above 700 gives you better loan options.
  • Debt Check: Lenders look at how much debt you already have compared to your income. Keeping it low is a big plus.
  • Savings Habits: Showing you can save regularly makes you look reliable.

3. How Much Do You Earn?

Your income helps determine how much you can borrow:

  • Steady Job: Most lenders want you to have been in your job for at least six months, or two years if you’re self-employed.
  • Proof of Income: You’ll need to show payslips, tax returns, or business statements.
  • Extra Income: Things like rental income or bonuses can count too.

4. Take Advantage of Government Help

There are programs in NSW to make buying a home easier:

  • First Home Buyer Assistance Scheme: This helps reduce or even eliminate stamp duty.
  • First Home Guarantee: Lets you buy with just a 5% deposit.
  • Family Home Guarantee: Single parents can buy with a deposit as low as 2%.

5. Can You Afford the Loan?

Lenders check if you can comfortably make repayments:

  • Buffer Zone: They test if you can still pay your loan if interest rates go up by 3%.
  • Living Costs: They’ll look at your spending habits to see what you can afford.

6. What About Lenders’ Mortgage Insurance (LMI)?

If your deposit is less than 20%, you’ll probably need LMI. This can be expensive, but some government programs or certain professions may qualify for an exemption.

7. Have Your Paperwork Ready

Being organized can speed up the loan process. You’ll need:

  • ID (like your driver’s license or passport).
  • Proof of income (payslips, tax returns).
  • Bank account and savings statements.
  • Information about any debts (credit cards, loans).
  • Details about the property you want to buy.

8. Eco-Friendly Homes Can Save You Money

In 2025, some lenders reward energy-efficient homes:

  • Green Loans: Lower interest rates for homes with features like solar panels or good insulation.
  • Added Value: Eco-friendly homes are also cheaper to run and more attractive to buyers.

9. Understand Loan Types and Interest Rates

Different loans work for different people:

  • Fixed-Rate Loans: Your repayments stay the same, so it’s easy to budget.
  • Variable-Rate Loans: These can go up or down, depending on the market.
  • Split Loans: A mix of fixed and variable rates gives you a balance of stability and flexibility.

10. Get Professional Advice

Don’t go it alone! Experts can help:

  • Mortgage Brokers: They compare loans from different lenders to find the best deal for you.
  • Financial Planners: They help you see how a loan fits into your long-term goals.
  • Online Tools: Use calculators to estimate how much you can borrow and what your repayments will be.

At Wealthy You, we have experts tailored to get you the help you need. That’s why we’re here to guide you through every step of the process. Our expert team will help you weigh the costs and benefits, ensuring you make the best decision for your financial future.

Ready for your home loan? Contact us today for a free consultation and discover how much you could save.

From Application to Approval: Your 2025 Home Loan Success Guide

Getting a home loan in NSW in 2025 is all about preparation. Know what lenders are looking for, take advantage of government support, and don’t be afraid to ask for help. With the right plan, you’ll be one step closer to owning your dream home.

 


FAQs

What is the minimum deposit for a house in Australia?

The minimum deposit for a house in Australia typically ranges from 5% to 20% of the property value, depending on the type of loan and lender. For first home buyers, there are options such as First Home Buyer Mortgages that allow for lower deposits, sometimes as low as 5%.

What is the minimum deposit for an investment property in Australia?

For investment properties in Australia, the minimum deposit is usually higher than for owner-occupied homes. Many lenders require a deposit of at least 20% to avoid Lender's Mortgage Insurance (LMI). However, some lenders may offer investment loans with a minimum deposit of 10% or even 5% for eligible buyers, subject to specific conditions.

Can I buy a house with a 5 deposit in Australia?

Yes, you can buy a house with a 5% deposit in Australia through certain loan programs, including First Home Buyer Mortgages. However, this often means you'll need to pay Lender's Mortgage Insurance (LMI) to protect the lender in case of default. It's advisable to thoroughly research your options and consult with a mortgage adviser to find the best solution for your situation.

 

If you have any questions or need further assistance, please contact us.

info@wealthyyou.com.au

☎️ (02) 7900 3288

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