Buying your first home is exciting, but choosing the right lender can be challenging. With so many home loan options available, knowing where to start is key. The right lender may offer competitive rates, flexible loan features, and special incentives that could help make homeownership more accessible.
In this guide, Unconditional Finance explores some of the most suitable lenders for first-time home buyers in Australia, including major banks, non-bank lenders, and credit unions. We’ll also share tips on comparing lenders effectively to help you make an informed choice.
What to Look for in a Lender as a First-Time Home Buyer
Not all lenders offer the same benefits, so it’s important to consider what matters most for your financial situation. Here are a few key factors to keep in mind when choosing a lender:
1. Competitive Interest Rates
Lower interest rates may reduce overall loan repayments, but it’s also essential to check for additional fees, such as annual package fees or early repayment penalties, which could add to your costs.
A slightly higher rate with fewer fees and better loan flexibility may sometimes be a better long-term option than a rock-bottom rate with hidden costs.
2. Low Deposit Home Loan Options
Some lenders may allow first-home buyers to purchase with as little as a 5% deposit, particularly when combined with government schemes like the First Home Guarantee (FHBG).
However, not all lenders offer this option, and some may still require Lenders Mortgage Insurance (LMI) even with a small deposit. It’s important to compare lenders who offer low-deposit loans and check whether additional costs may apply.
3. Loan Features
Beyond just the interest rate, useful loan features can help you manage repayments more effectively. Offset accounts reduce interest charges by linking your home loan to a transaction account, while redraw facilities allow you to withdraw extra repayments if needed.
Some lenders also offer flexible repayment options, letting you make additional payments without penalty—helpful if you want to pay off your home loan faster.
4. Lenders Mortgage Insurance (LMI) Waivers
LMI is usually required if you borrow more than 80% of a property’s value, but some lenders waive this cost for first-home buyers in certain professionals, like doctors, lawyers, and accountants.
Others may offer lower LMI rates, which could help reduce upfront costs and make buying a home more affordable.
5. First-Home Buyer Incentives
Many lenders offer special promotions to attract first-home buyers, such as cashback deals, reduced application fees, or discounted interest rates. These incentives can be beneficial, but they shouldn’t be the only deciding factor.
It’s important to check whether these deals apply to your specific loan type and compare them with other long-term benefits, like ongoing rate discounts or flexible repayment terms.
6. Customer Service & Loan Processing Times
The home loan approval process varies by lender. If you need a quick pre-approval to make an offer on a property, choosing a lender known for fast processing times and responsive service may be beneficial.
Some lenders also provide dedicated first-home buyer support teams, offering step-by-step guidance throughout the application process. Access to digital banking tools, loan tracking apps, or face-to-face customer service may also be factors worth considering.
Top Lenders for First-Time Home Buyers in Australia
Many lenders offer competitive home loan options, but some stand out when it comes to supporting first-home buyers. Below are some banks, non-bank lenders, and credit unions that may be worth considering.
1. Major Banks with First-Home Buyer Support
Commonwealth Bank (CBA)
- Offers flexible home loan options and cashback deals that may benefit first-time buyers.
- Supports government-backed schemes like the First Home Guarantee (FHBG), which may allow eligible buyers to purchase with just a 5% deposit without LMI.
- Digital tools like the CommBank Property App help estimate borrowing capacity.
- Provides discounted home loan rates for first-home buyers who meet certain criteria.
- Access to dedicated first-home buyer specialists to guide applicants through the loan process.
Westpac
- Provides low-deposit home loans and first-home buyer discounts.
- Could waive LMI for eligible borrowers in specific professions, such as medical and legal professionals.
- Strong customer support, including a dedicated first-home buyer hub.
- Offers parental assistance options, allowing parents to use their property equity to help first-home buyers secure a loan.
- Has fixed and variable rate options with features like repayment flexibility and offset accounts.
ANZ
- Competitive fixed and variable interest rate options.
- Online pre-approval tools that may help streamline the loan application process.
- Access to government home-buying schemes such as the First Home Guarantee (FHBG).
- May offer discounted rates for first-time buyers with strong financial standing.
- Features offset and redraw facilities that may help reduce interest repayments over time.
NAB
- Cashback offers and discounts on certain home loan products.
- No annual fee on some home loan packages, which may help reduce costs.
- Strong digital banking features for managing loans easily.
- Access to home loan coaching to assist first-home buyers through the borrowing process.
- Offers fixed, variable, and split loan options, which may provide flexibility in managing repayments.
St. George
- First-home buyer grants and cashback deals may be available.
- Flexible repayment options, including extra repayments without penalty on some loan types.
- May offer LMI waivers for eligible professionals.
- Provides a Family Pledge option, where parents can use their home’s equity to help with a first-home buyer’s deposit.
- Offers rate discounts for borrowers with an existing St. George transaction account.
Bankwest
- Offers low-deposit home loans that could be suitable for first-home buyers.
- Digital-first lender with a focus on convenient online applications.
- Provides flexible repayment structures, which may include interest-only options for an initial period.
- May include additional benefits for WA-based borrowers, given its strong presence in Western Australia.
- Offer discounts on banking products like credit cards and transaction accounts for home loan customers.
2. Non-Bank Lenders with Competitive Offers
Non-bank lenders for first-home buyers may provide more flexible loan options and competitive interest rates, which could benefit first-time buyers with unique financial situations.
Resimac
Provides flexible lending options for borrowers with non-traditional employment or lower deposits.
Competitive fixed and variable rate home loan products.
May offer alternative loan assessments for borrowers with minor credit history concerns.
Access to specialised home loan products, including low-document loans for self-employed applicants.
Offers flexibility on loan term structures, which could help first-home buyers tailor repayments to their needs.
Bluestone
- Specialises in home loans for borrowers who may not meet traditional bank lending criteria.
- May offer solutions for self-employed first-home buyers with alternative income verification.
- Provides flexible credit score requirements, making it an option for those with a limited credit history.
- Offers tailored loan structures with interest-only repayment options.
- Known for fast loan approval times, which may be beneficial for buyers in competitive markets.
Liberty
- Offers low-deposit home loans and alternative lending options.
- May approve applicants with credit history challenges or non-standard employment.
- May provide specialist lending solutions for those with unique financial situations.
- Offers flexible loan terms with redraw facilities and offset accounts.
- Allows non-traditional income sources to be considered in loan applications, which may help gig workers or freelancers.
Pepper Money
- Known for working with borrowers who have non-standard income or financial backgrounds.
- May provide fast loan approvals with flexible repayment structures.
- Offers LMI-free home loans for certain applicants, potentially reducing upfront costs.
- Accepts alternative forms of income verification, which may benefit self-employed borrowers.
- May provide flexible home loan solutions for borrowers with past credit issues.
3. Credit Unions & Mutual Banks with First-Home Buyer Benefits
Mutual banks and credit unions often provide competitive rates and strong customer service, while focusing on community-oriented banking.
Bank Australia
- Ethical banking with low-rate home loans for responsible borrowers.
- Supports sustainable housing initiatives with green home loan options.
- Offers competitive fixed and variable rate home loans with minimal fees.
- Profits are reinvested into community projects, making it an option for socially conscious borrowers.
- Strong customer service with a focus on personalised lending solutions.
Heritage Bank
- Personalised service and low-deposit home loan options.
- Offer both fixed and variable-rate home loans with flexible terms.
- May provide special discounts or rate reductions for first-time buyers.
- Allows multiple offset accounts, which may help reduce interest costs.
- Provides relationship-based banking, where customers may negotiate better rates based on loyalty.
Teachers Mutual Bank
- Specialises in home loans for teachers and essential workers.
- May offer exclusive discounts for first-time buyers in eligible professions.
- Provides competitive fixed and variable rate home loans with added flexibility.
- Offers salary packaging benefits, which could assist borrowers in managing repayments.
- Focuses on ethical banking principles, ensuring profits are reinvested into the education sector.
Qudos Bank
- Offer both fixed and variable-rate home loans with flexible terms.
- Provides flexible repayment options, including extra repayments on variable-rate loans.
- May offer discounted rates for first-time buyers with a strong financial profile.
- Access to interest rate lock features, which may help secure a favourable rate before settlement.
- Provides strong customer support and personalised loan assessments.
How to Compare Lenders & Choose the Right Home Loan
With so many lenders offering different products, here are some tips for making an informed decision:
Use Loan Comparison Tools
Websites like ASIC’s Moneysmart and lender comparison platforms can help assess interest rates, fees, and loan features. These tools allow you to compare loan terms side by side, helping you identify hidden costs or better loan structures that might not be obvious at first glance.
Consider Mortgage Broker Assistance
A Sydney mortgage broker can help you explore loan options and identify lenders that may suit your financial situation. Since brokers have access to multiple lenders, including non-bank options, they can present loan products you may not have considered, potentially leading to better deals or easier approval.
Read Customer Reviews
Understanding other borrowers’ experiences with lenders can provide insight into service quality and approval processes. Pay attention to feedback on processing times, customer support responsiveness, and how lenders handle unexpected situations, as these factors can impact your overall borrowing experience.
Get Pre-Approved
Getting pre-approved for a home loan may help you understand how much you can borrow and give you an advantage when negotiating with sellers. It shows that you’re a serious buyer who has already taken steps to secure financing.
Common Mistakes to Avoid When Choosing a Lender
1. Focusing only on interest rates
A low rate might look appealing, but hidden fees or inflexible terms could add to overall costs. Some loans with ultra-low rates may have restrictions on extra repayments or higher exit fees, which could make them less beneficial in the long run.
2. Ignoring loan features
Offset accounts, extra repayment options, and redraw facilities could provide long-term benefits. These features can help reduce the interest you pay over time or give you flexibility in managing your home loan if your financial situation changes.
3. Not checking government incentives
You could miss out on grants or stamp duty exemptions if you don’t explore all options. Many first-home buyer schemes have eligibility requirements, so it’s worth checking early to ensure you maximise any savings or benefits available to you.
4. Skipping pre-approval
Without mortgage pre-approval, you may struggle to act quickly when you find the right property. Sellers often prioritise offers from pre-approved buyers, as it shows you have serious intent and financing in place, potentially giving you an advantage in a competitive market.
Final Thoughts: Finding the Right Lender for Your First Home Loan
Choosing a lender is a big decision, but the right one can make the journey to homeownership smoother. Major banks, non-bank lenders, and credit unions all offer different benefits, so it’s worth comparing loan features, interest rates on first-home loans, and eligibility requirements carefully.
By taking advantage of home loan comparison tools, and expert advice, you may be able to secure a loan that suits your financial situation and homeownership goals.
If you’re exploring home loan options, consider lenders that support first-time buyers, as the right lender could help turn your dream of owning a home into a reality.
Not sure where to start? Reach out to us for expert guidance—we’ll help you compare lenders, secure pre-approval, and find a loan that fits your financial goals.
Frequently Asked Questions
Getting started can feel overwhelming, but that’s where we come in. As mortgage brokers, we help first-time buyers navigate their home loan options by:
- Assessing your finances to see how much you can afford.
- Comparing different lenders to find competitive rates and loan features.
- Checking your eligibility for government schemes like the First Home Guarantee (FHBG) or First Home Owner Grant (FHOG).
- Guiding you through the pre-approval process, so you know what you can afford before house hunting.
Instead of approaching banks one by one, we do the hard work for you—potentially saving you time and helping you find a suitable loan.
Yes! Many first-home buyers purchase a property with less than a 20% deposit, and we can help you explore those options.
- Some lenders offer low-deposit home loans that allow you to buy with just a 5% deposit, especially if you qualify for the First Home Guarantee (FHBG).
- If you don’t qualify, we can explore lenders that offer Lenders Mortgage Insurance (LMI) waivers for eligible professionals.
- We’ll also compare lenders with lower LMI premiums, which could help reduce upfront costs.
We’ll walk you through all available options to help you get into the market sooner without unnecessary costs.
It depends on your situation! Each lender has its strengths, and we help you weigh up the pros and cons:
- Big banks offer brand recognition, extensive branch networks, and strong digital banking features.
- Non-bank lenders often provide lower interest rates, flexible lending criteria, and faster approvals.
- Credit unions & mutual banks may have competitive rates and a more personalised customer experience.
We help you compare all these options and match you with a lender that best suits your budget, borrowing capacity, and long-term goals.
Self-employed buyers can get home loans, but the process may be a little different. The good news? We specialise in helping self-employed borrowers secure finance.
- Many banks require two years of tax returns to verify income, but some lenders offer low-doc home loans that require alternative documentation.
- Non-bank lenders like Pepper Money, Bluestone, or Liberty may have more flexible approval criteria.
- We’ll help present your financials in the best possible way to improve your chances of approval.
With the right lender, self-employed buyers can get a competitive home loan—our job is to help make it happen.
You can go directly to a bank, but you’ll only see their products—not what’s available from other lenders. As mortgage brokers, we:
- Compare dozens of lenders instead of just one, potentially finding better rates or lower fees.
- Guide you through the entire home loan process, from application to settlement.
- Manage paperwork and negotiations, making the process smoother.
- Work in your best interest—we’re not tied to any single bank, so we focus on what’s best for you.
For first-time buyers, working with a broker may mean less stress, more informed choices, and access to a wider range of loan options.
