Compare first home buyer loans

Best home loan pick for first home buyers in December 2025

loans.com.au Variable Home Loan - LVR 90% (Owner Occupier, P&I)

loans.com.au Variable Home Loan

• $0 Application
• $0 Annual Fee
• 5.29% Interest rate
• 5.33% Comparison rate

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Pros & cons

• A competitive variable rate home loan
• Optional offset account
• No application fee
• You can apply online

• Optional offset account comes with an additional 0.10% added to the interest rate

What makes a good first home buyer loan?

A good first home buyer loan will be different for different first home buyers. It can depend on how much deposit you've saved up, what your financial goals are and what you're planning to do with the property.

For example, someone buying a home to live in for the long-term will want a different home loan to someone planning to rent out the home and then sell in a couple of years.

Although most home loans are available for both first-time buyers and existing borrowers who want to refinance, there are features to look out for to know whether they are better suited for first home buyers. There are also some home loans which are specific to first home buyers.

How to find the best 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.

Although our best home loan for first home buyers above is a great solution, there's no one-size-fits-all and so it won't be the best for everyone.

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

• Deposit size: As a first home buyer you're more likely to want to borrow with a lower deposit. Many lenders offer as little as 10%, which you'll see listed in the table above. Many lenders are part of first home buyer schemes where you could get a loan with a 5% deposit.
• Interest rates: The lower your interest rate, the lower your repayments.
• Loan purpose: Whether an owner occupier loan or an investment loan is right for you depends on your goals. Make sure you get the right loan based on whether you're going to live in the home or rent it out.
• High Finder Score: The loans in the table above are selected for first home buyers. Those with a Finder Score of above 9 are the best loans with a combination of lower costs and good features.
• Fixed vs variable. Variable rate loans typically offer more features and flexibility, as well as access features to 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.
• Features: Making sure your home loan has a redraw facility or an offset account attached to the home loan can be a great way to attack your home loan early.
• Low or no fees: No one wants to pay even more money by having to pay fees, just don't get sucked in by no fees with a high interest rate.
• Cashback offers: A cashback offer is by no means something you should make your home loan decision on. But if you've found 2 identical home loans that will save you money over the long run and it offers a cashback, it can be a really useful cash injection to help you in the early days of homeownership.

How much does a first home buyer home loan cost?

Your deposit is usually the biggest cost, but there are other costs to consider when you buy a home:

• 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 (LMI). The LMI premium costs thousands and 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.
• 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 afford to borrow for your first home loan?

You can use a borrowing power calculator like the one below to get an estimate of how much a bank will lend you.

Enter your income (and your partner's income if making a joint application), plus the number of dependants and any debts you have. The calculator will estimate your expenses using a standard cost of living index.

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

How to save your property deposit

Although it is generally thought that you need to save a 20% deposit, you actually can get a home loan with as little as 10%. As a first home buyer you might even be able to take advantage of schemes where you can use as little as 5%.

Here are some tips on saving for your property deposit, but you can also visit our full guide for more in-depth tips:

1. Work out your borrowing power. Once you've worked out how much you're likely to be able to borrow, you can calculate your required deposit size.
2. Set a serious budget. You'll need to go through your bank statements, take stock of how you spend currently and limit yourself to a certain budget each month. Put everything into a high interest savings account separate from your disposable income.
3. See what help you can get. Whether that's assistance from family or researching the various government grants and schemes.
4. Look for other ways to cut back. For anything you can't cut out of your budget, see if you can switch to cheaper plans, benefit from store rewards programs and keep easy, low-cost junk food in the freezer for those days you're tempted by Uber Eats.

Expert insight: Prepare for financial responsibilities beyond 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.

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.

[And] 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."

Max Phelps

Founder of Golden Eggs and creator of the Five 2 Money Diet

Lenders mortgage insurance (LMI)

If your deposit is smaller than 20% of the property's value, your lender will charge you LMI. This is to cover the lender in case you're unable to repay your home loan.

LMI 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.

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.

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, eligible first home buyers don't have to pay stamp duty on properties valued below $800,000.

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

The First Home Guarantee

If you only have a 5% deposit saved and you're a first home buyer, you could be eligible for the First Home Guarantee. Under this federal 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.

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.

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.
  • Requires a 10% deposit (or lower). Saving a deposit is often one of the hardest challenges for first home buyers. Loans targeting first home buyers often have a maximum insured LVR of 90–95%, meaning you can get the loan with just a 5–10% deposit. But you'll need to pay LMI if you're borrowing above 80%.
  • 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 also consider an interest-only loan. Your rate will be higher but your repayments will be lower (in the short term).

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

  First home owner grants and stamp duty concessions 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 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 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 words, 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 6 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.

• 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.

How we calculate Home Loan Finder Scores

Read full methodology

What different scores mean

9+

Excellent

These home loans offer low costs, coupled with a host of features, giving the best overall value.

7+

Great

These home loans may have slightly higher interest rates or fewer features but overall, a competitive offering.

5+

Standard

Usually the home loans would offer above average rates. They may still include some competitive features.

0+

Basic

Higher costs and/or fewer features.

What is Finder Score?

The Finder Score crunches 7,000 home loans across 120+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.

To provide a Score, we compare like-for-like loans. So if you're comparing the best home loans for cashback, you can see how each home loan stacks up against other home loans with the same borrower type, rate type and repayment type. We also take into consideration the amount of cashback offered when calculating the Score so you can tell if it's really worth it.

Read the full breakdown

To make sure you get accurate and helpful information, this guide has been edited by Jason Loewenthal as part of our fact-checking process.

Written by

Richard Whitten

Senior Money Editor

Richard Whitten is Finder’s Senior Money Editor, with over eight years of experience in home loans, property, credit cards and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard started his career in education and textbook publishing in South Korea. He holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University. See full bio

Richard's expertise

Richard has written 677 Finder guides across topics including:

• Home loans
• Credit cards
• Personal finance
• Money-saving tips

Co-written by

Sarah Megginson

Personal finance expert + media spokesperson

With over 20 years of experience in property, finance and investment journalism, Sarah is a trusted expert whose insights regularly appear across television, radio, and print media, including Sunrise, ABC News, and Yahoo! Finance. She has previously served as managing editor for Your Investment Property and Australian Broker, and her expert advice has been shared in the media over 3,500 times since 2023 alone. Sarah holds a Bachelor’s degree in Communications and a Tier 1 Generic Knowledge certification, which complies with ASIC standards. See full bio

Sarah's expertise

Sarah has written 205 Finder guides across topics including:

• Home loans
• Personal finance
• Budgeting and money-saving tips
• Managing the cost of living