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First Home Buyer

Home Loans For First Home Buyers

Are you ready to buy your first home? Purchasing a property is a big commitment and at AFM we want to make the process as easy as possible for you. Whether you’ve found the home you want to purchase or are just starting to think about home ownership, it’s important to be aware of the costs associated with buying a house—there’s more to it than just the deposit and the mortgage!

Upfront Costs You May Need To Allow For

  • Stamp duty
  • Home loan set up fees
  • Lenders mortgage insurance (LMI)
  • Solicitor’s or conveyancer’s fees
  • Building & pest inspections
  • Council rates adjustments

Saving for a Deposit

It’s common knowledge that you should save up a deposit to buy a house, but just how much do you need? In addition to upfront costs, first home buyers may require approximately 8% of the purchase price as deposit. Most lenders want to see evidence that at least 5% of this amount has been saved through regular deposits over a 3 to 6-month period. So if you are looking to purchase a home for $500,000 you would need to save $25,000 which is 5%.

That said, if your deposit is less than 20% you will need to pay Lender’s Mortgage Insurance (LMI). This fee covers the lender against the borrower defaulting on the loan.

Choosing the right home loan for your situation

Do you want the peace of mind that comes from knowing exactly how much your regular repayments will be? Then a fixed rate home loan could be the perfect solution for you. Locking your interest rate in for a term of 2 or 3 years can help you organise your budget and stay on top of your repayments.

If you’re looking for a home loan with more features, like extra repayments and/or a redraw facility, perhaps a variable home loan would be more suitable. You may even find a split loan provides you with what you need—the stability of a fixed loan with the extra features of a variable home loan.

At AFM we also offer construction home loans, so if you are planning to build your first home we can help you secure the right loan for your needs.

Things to consider when choosing a home loan include:

  • Type of home loan – fixed, variable or split home loan
  • Lenders Mortgage Insurance – if your deposit is less than 20% of the purchase price
  • Fees – set-up & ongoing fees
  • Features – offset accounts, extra repayments, credit cards, redraw facilities

How Much Can I Borrow?

The amount you can borrow—your borrowing capacity—is calculated on a number of factors, to ensure you can afford the repayments on your mortgage. Your living expenses, unsecured debt (like credit cards and Afterpay) and any other liabilities are deducted from your annual income to determine how much you can comfortably repay.

To get an estimate of your borrowing capacity, you can visit our borrowing calculator.

For a more personalised assessment of your situation, contact one of our lending specialists on 134AFM.

First Home Owner Grant (FHOG)

As a first home buyer, you may be entitled to the First Home Owner Grant. The amount available and rules around maximum purchase price differ across the states and territories. You can find key information about the grant on the Government website. You may also be eligible for concessions on stamp duty.

Not sure where to start or want to know which properties are in your budget?
Try our borrowing power calculator to see how much you are eligible to borrow:

5-Step Home Loan Application Process

Applying for an AFM home loan to purchase or refinance is hassle free.
Go from pre-qualify to settlement in five easy steps.

Number 1-01-01

Pre-qualify

Find out how much you can borrow with an AFM pre-qualification

Number 2-01

Application

Submit your completed application form with accompanying documents.

Number 3-01

Conditional Approval

Conditional approval is valid for 90 days. Once granted it is still subject to valuation and LMI approval

Number 4-01

Formal Approval

Once all conditions have been met your home loan will go unconditional

Number 5-01

Settlement

Your solicitor or conveyancer will direct your lender to make the final settlement payments to the vendor

First Home Buyers’ Guide

Handy tips for making your first home buying experience stress-free

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