Compare a range of the best first home buyer loans

• What makes these loans good for first home buyers?

  Most home loans are available for first-time buyers and existing borrowers who want to refinance or buy a second home. There aren't many loans that are only offered to first home buyers.

  All the loans in the table above are owner-occupier loans, meaning they're for homebuyers and not investors. We've included a mix of fixed and variable rate home loans with competitive interest rates. Many loans are available with deposits smaller than 20%. To find these loans, look at the max LVR (loan to value ratio) column in the table. If the maximum LVR is 90% or higher, then it's available with a 10% deposit or smaller.

*The loans in the table above may also be available for non-first home buyers. But first home buyers may find these loans useful because many have low interest rates or max insured LVRs above 80%, meaning you can get them with a smaller deposit.

How to find the right home loan as a first home buyer

First home buyers, like all other borrowers, are trying to get approved for a home loan that suits their needs, without paying more than they need to.

Here's how to find the best loan for you:

• Review current interest rates. The lower your interest rate, the lower your repayments. After being at record lows during the pandemic, interest rates began rising in 2022. Currently, home loans between 4.50% and 5% are available for first home buyers.
• Decide on fixed versus variable. Variable rate loans typically offer more features and flexibility, as you can refinance without fees and access features like an offset account (more on that in a moment). With a fixed rate loan, you have the certainty of knowing your repayments will never move up (or down) during the fixed period, but it's hard to make changes if you need to.
• Work out your deposit size. Having a bigger deposit means your monthly repayments will be lower, and it also makes it easier to get a home loan approved. Most banks want to see a deposit between 10-20%, although it's possible to buy a home with the First Home Loan Deposit Scheme with just a 5% deposit.
• Consider your repayment type. Most first home buyers will choose a loan with principal and interest repayments, where you repay the principal and the interest together. It may be possible to get an interest-only loan, where the interest rate is typically higher, but your repayments will be lower (as you're not repaying any principal). Banks are reluctant to give first home buyers an interest only loan, because they want to see you make headway with the debt.
• Think about the features that matter to you. First home buyer loans are often basic home loans, without extra features like an offset account. This is fine if you're keen to get a low deposit loan with a low interest rate. But if you have extra savings to put into an offset account, consider a home loan with more features.

Working out your costs and borrowing power

Before you can get your first home loan or even try to buy a home, you need to know how much it will all cost you. Your deposit is usually the biggest cost, and the size of your deposit affects which home loans you can get (we'll cover deposit saving in the next section).

But there are many other costs to consider beyond the deposit:

• Stamp duty. Every property purchase attracts stamp duty, a tax charged by state and territory governments. Stamp duty can add thousands or tens of thousands of dollars to your purchase costs. Luckily, many first home buyers can get a discount or exemption if they're buying their first home.
• Lenders mortgage insurance. This hefty premium (often worth thousands) is usually payable when you have a deposit worth less than 20% of the purchase price (we'll deep dive this in a moment).
• Inspections. While not compulsory, getting a professional building and pest inspection before buying a property is always a good idea.
• Conveyancing. You need a legal expert to review your contract of sale (for the property purchase), check the property title is correct and represent you at settlement. The services of a conveyancer or lawyer can cost $1,000–$2,000.
• Bank and government fees. There's a government fee to register your mortgage and your lender may charge other upfront fees, like an application fee or valuation fee.
• Council rates and strata. When you take ownership of a property, you have to pay council and water rates. If you're buying a property on a strata title, like an apartment or unit, there will be strata costs too.
• Insurance. You need to take out a home insurance policy on your home before settlement occurs and you take ownership of the property. If you're buying a strata property (an apartment or townhouse), strata insurance is usually included in the strata fees and covers the building.

How much can you borrow?

You can use a borrowing power calculator to get a clear idea of how much a bank will lend you.

You will need to enter your income (and your partner's income if making a joint application), plus the number of dependents and any debts you have. The calculator will then estimate your expenses using a standard cost of living index. The end result will only be an estimate but it gives you a better idea of how much you can borrow.

You can also check out our guide on how to increase your maximum borrowing capacity.

How to save your property deposit

Once you have a good understanding of your property buying costs and how much you can borrow, it's time to think about the deposit.

Loan to value ratio (LVR) is a fancy mortgage term for your deposit size in relation to your property's value. For example:

• If you bought a $500,000 property
• Sith a $100,000 deposit
• That would be a 20% deposit, or 80% LVR.

Having a 20% deposit means you can avoid paying lenders mortgage insurance.

Max Phelps, founder of Golden Eggs and creator of the Five 2 Money Diet, says first home buyers also need to prepare themselves for the financial responsibilities that come with owning a home, which goes much further than just saving the deposit.

"How good are you at managing your expenses and building up savings? If you've gotten into bad spending habits and money feels a little out of control, imagine how much worse it would feel with a giant mortgage hanging over your head," Phelps says.

"People spend an average of 30% of their income on a mortgage, but to get ahead, you should plan to still save 20% of your income as well – this will set you apart in the long run."

For those who are considering asking their parents for help with a home loan deposit, Phelps is cautious.

"My advice to parents thinking about putting their property on the line for their kids would be to make sure the kids are good savers first," he says.

"We find that having a few bank accounts spread across at least 2 banks dramatically increases savings and improves confidence in buying a first home."

Saving a deposit for your first home is tough, especially if you're renting, but there are a few ways you can build your deposit:

• Get lucky: With a parental gift or inheritance. If you're fortunate enough to have parents willing to lend you a hand financially, this can give your deposit savings balance a big leg up.
• Sell assets: Things like a car, bike, sporting goods, gaming consoles and designer clothing can fetch a decent price on second-hand markets.
• Find a guarantor: If your parents don't want to part with cash, they could use their property as security to guarantee part of your deposit. This reduces the amount you have to save and might help you avoid LMI costs too.
• Save using the FHSSS: This scheme helps you save more towards your deposit, as any money saved is taxed at a lower rate, and earns a return in your super fund.
• Go on a spendings diet: It's like Dry July, but for your wallet. Commit to stop spending on takeaways, shopping, gifts or experiences for just one month and see how much you can save?

Lenders mortgage insurance (LMI)

If your deposit is smaller than 20% of the property's value (so, your LVR is 81% or higher), your lender will charge you lenders mortgage insurance. This can cost you thousands or tens of thousands on top of all your other expenses (although you can often borrow it alongside your loan amount).

LMI costs vary depending on your loan amount and deposit size. If your LVR is 85% (a 15% deposit) then your LMI will be less than if you have an LVR of 95% with a 5% deposit.

Here are some examples:

The LMI amounts above are taken from Finder's LMI premium estimate calculator and are examples only.

Access government support for first home buyers

First home buyers in Australia have access to a large (and sometimes confusing) range of state and federal grants, concessions and other schemes.

Eligibility for these programs depends on things like the property value, your location and whether it's newly built or already exists. Every state and territory has different rules and policies.

Here is a list of the various first home buyer grants and concessions:

First home owner grants

Some first-time buyers are eligible for a cash grant. These grants can run up to $10,000 or even more in some cases. To qualify, you often need to be purchasing a new or off-the-plan property, with a limit on the overall value of the property. These grants differ in every state and territory.

Check your eligibility with our state-by-state first home owner guide

Stamp duty exemptions and concessions

Stamp duty is one of the biggest costs associated with buying a property. Luckily, many first-time buyers can avoid stamp duty completely or get a discount on this tax. In NSW, for example, first home buyers don't have to pay stamp duty on properties valued below $650,000, saving them up to $22,000.

Learn more about the stamp duty exemptions and concessions in each state and territory.

The First Home Loan Deposit Scheme

If you only have a 5% deposit saved and you're a first home buyer, you could be eligible for the First Home Loan Deposit Scheme. Under this scheme, eligible borrowers can borrow 95% of their property value with a 5% deposit and have the government guarantee the remaining 15% of the deposit, allowing them to avoid LMI costs.

This is a federal government scheme.

The First Home Super Saver Scheme

Another federal scheme, the First Home Super Saver Scheme allows first home buyers to make extra payments into their superannuation and then withdraw them to use for a home deposit. This ends up saving you in tax while helping you build your deposit.

Family Home Guarantee

Up to 10,000 single parents (2,500 per year for 4 years) are eligible to buy a home with a deposit of just 2%, under the government's Family Home Guarantee, announced as part of the 2021 Federal Budget in May. This means for the purchase of a property worth $700,000, the homebuyer will need to save a deposit of just $14,000.

Regional Home Guarantee

The Regional Home Guarantee lets you buy or build a new home in regional Australia with a 5% deposit while avoiding LMI costs.

Stamp duty discounts

As part of the Victorian state budget update in November 2020, it was announced that all homebuyers, including first timers, now have access to a stamp duty discount of up to 50% of the purchase price of residential property in Victoria.

For those purchasing property in Victoria, a full 50% stamp duty discount will apply to all buyers of newly built homes valued at up to $1 million. For those buying existing homes, a 25% stamp duty discount will apply on properties priced up to $1 million.

This discount on stamp duty in Victoria was available for those who entered a purchase contract between 25 November 2020 and 30 June 2021. Importantly for first home buyers, this discount applied in addition to any other waivers or concessions that you may be eligible for. This discount was only valid on contracts that were signed prior to 1 July 2021.

Get expert help

You don't have to find your first home loan all by yourself. Mortgage brokers are experts who have access to home loans from a panel of lenders. They can suggest suitable options for you and help you with the whole application process. Their services are usually free. While most people are perfectly capable of getting their own home loan, a broker can be a useful guide.

Find a mortgage broker today

Why you can trust Finder's home loan experts

We're freeYou won't pay any more by taking out a home loan with us. Better still, we regularly run exclusive deals that you won't find on any other site – plus, our tables make it easy to compare loans.

We're expertsWe've researched and rated dozens of home loans as part of our Finder Awards. We provide unique insights and our in-house experts regularly appear on Sunrise, 7News and SBS News.

We're independentUnlike other comparison sites, we're not owned by a third party. That means our opinions are our own and we work with lots of home loan lenders, making it easier for you to find a good deal.

We're here to helpSince 2014, we've helped 150,000+ people find a home loan by explaining the nitty gritty details simply and clearly. We'll never ask for your number or email. We're here to help you make a decision.

Frequently asked questions about first home buyer loans

• How do I compare first home buyer home loans?

  While some lenders offer home loan products specifically for first home buyers, most do not. But an ideal mortgage product for a first home buyer usually:

  • Has a low interest rate. No one wants to be stuck with a high interest rate, especially first home buyers. A lower rate means lower repayments, making your mortgage more affordable. Some lenders offer special introductory variable rates, which start low for the first year or two but will revert to a higher rate later.
  • Requires a 10% deposit (or lower). Saving a deposit is often one of the hardest challenges for first home buyers, especially if you need to save the traditional 20% of a property's value to qualify for a loan. Loans targeting first home buyers often have a max insured loan-to-value ratio of 90 or 95%, meaning you can get the loan with just a 5-10% deposit. But you'll need to pay lenders mortgage insurance if you're borrowing above 80%.
  • Comes with few extra features. First home buyer loans are often basic home loans, without extra features like an offset account. This is fine if you're really just concerned with getting a low deposit loan with a low interest rate. But if you have extra money to put into an offset account you might want to consider a home loan that comes with one.
  • Has principal and interest repayments. With these home loans you repay the principal and the interest together. These loans often have lower interest rates too. But you could consider an interest-only loan too. Your rate will be higher but your repayments will be lower (in the short term).

• Am I eligible for any first home owners grants or concessions?

  There are two benefits first home buyers can access: first home owners grants and stamp duty concessions. Both benefits vary within each state and change over time.
  In NSW first home buyers don't have to pay stamp duty on properties valued below $650,000, saving them up to $22,000. But first home buyers constructing or purchasing new homes can also receive a $10,000 grant (depending on the value of their property). In Victoria the grant can go as high as $20,000 if you're buying a new residential property outside Melbourne.
  If you only have a 5% saved and you're a first home buyer you could be eligible for the First Home Loan Deposit Scheme. Under this scheme eligible borrowers can borrow 95% of their property value with a 5% deposit and have the government guarantee the remaining 15% of the deposit, allowing them to avoid LMI costs.

• How much can I borrow?

  This is an important question for every first home buyer. You can use a borrowing power calculator to get a clear idea of how much a bank will lend you.
  You will need to enter your income (and your partner's income if making a joint application), plus the number of dependents and any debts you have. The calculator will then estimate your expenses using a standard cost of living index. The end result will only be an estimate but it gives you a better idea of how much you can borrow.No calculator type was specified

• How can I save up a deposit?

  Building that deposit for your first home is tough, especially if you're renting. And when house prices rise the amount you need to save only grows. Finding a low deposit home loan can make the task easier. But there are a few other ways to build your deposit:

  • Parental gift or inheritance. Most lenders want to see genuine savings. In other ways, money you've earned yourself. But many will accept at least part of a deposit in the form of a cash gift or inheritance from your parents. Some lenders only need 5% of your deposit to be genuine savings.
  • Sell assets. You can sell valuable assets and use the cash to boost your deposit. You may need to hold the cash in your account for six months in order for it to quality as genuine savings.
  • Find a guarantor. As mentioned above, a parent can use their property as security to guarantee part of your deposit. This reduces the amount you have to save and might help you avoid LMI costs too.

  Read our full guide to building your deposit savings here.

• Can I get professional help with my loan?

  You certainly can. Mortgage brokers are experts who have access to home loans from a panel of lenders. They can suggest suitable options for you and help you with the whole application process. Their services are usually free. While most people are perfectly capable of getting their own home loan, a broker can be a useful guide.