What you need to know

Start with the points that change your monthly budget and long-term flexibility. These practical checks focus on everyday cash flow rather than chasing the smallest headline rate.

First time home buyer loans: a quick primer

Before you compare offers, understand common product types and when each makes sense. Lenders typically offer standard variable and fixed principal-and-interest loans, low-deposit products, guarantor or family-pledge loans and concessional government-guaranteed products. For a detailed walkthrough, see the full guide on First Home Buyer Loans at Your Home Loan Consultant.

Learn four terms before you sign anything:

• LVR (Loan-to-Value Ratio) — your loan as a percentage of the purchase price. Lower LVR = more lender options and lower fees.
• LMI (Lender's Mortgage Insurance) — protects the lender if you default. Can be a large upfront cost, but schemes or guarantors can waive it.
• Serviceability — the lender's test of whether your income and expenses support the loan repayments.
• Comparison rate — includes interest and most fees to give a more realistic ongoing cost for comparing products.

Low deposit options and the 5% deposit scheme

The First Home Loan Deposit Scheme lets eligible buyers purchase with a smaller deposit while avoiding lender's mortgage insurance, because the government guarantees part of the loan. You must intend to live in the property and meet scheme rules. Participating lenders nominate applicants to Housing Australia for the guarantee.

While the guarantee removes the LMI cost barrier, lenders still apply normal serviceability assessments. For the official scheme overview, visit the Australian Government 5% Deposit Scheme page.

The 5% scheme won't suit every buyer. Compare alternatives:

• Guarantor or family-pledge loans — can avoid LMI but add complexity and risk for the guarantor.
• Shared-equity models — reduce upfront cash at the cost of sharing future capital gains.
• Conventional low-deposit products — straightforward but LMI applies, which adds to cost.

When choosing, focus on deposit size, risk tolerance and whether you need a quick settlement, then prepare the documents needed to improve your approval odds.

How to compare total costs: LMI, interest and loan size

A simple example makes trade-offs clearer. Imagine a $600,000 purchase on a 30-year principal-and-interest loan at 5.0%:

As a rule of thumb, LMI ranges from roughly 1% at 90% LVR to 3%+ at 95% LVR, but always get an exact quote. Gather these inputs before speaking to a broker:

• Purchase price and deposit amount — determines loan size and LVR, which influences whether LMI applies and what products a lender will offer.
• Pay LMI upfront or capitalise it? — Capitalising LMI increases your loan balance and monthly repayments; paying upfront raises your initial cash requirement.
• Desired loan term and repayment type — the term and whether you choose P&I or interest-only directly shapes monthly costs and total interest paid.
• Income, living expenses and existing debts — lenders use these to assess serviceability and set your borrowing limit.

Run your numbers using the Home Loan Repayment Calculator or ASIC MoneySmart's loan repayment calculator.

State grants, stamp duty concessions and other incentives

Each state and territory runs different grants, stamp duty concessions and first home buyer incentives. Programs often prioritise new builds, require owner-occupation within a set period and impose property value caps. Always check the relevant state revenue office for current caps and requirements.

Apply with confidence: documents, lenders and checklist

Start your application with a lender-focused checklist so nothing slows you down. For local practical tips specific to Brisbane buyers, see Top Tips for First Home Buyers in Brisbane.

• Photo ID — passport or driver's licence, plus proof of residency. Lenders use these to confirm identity and verify the primary applicant's address.
• Latest payslips and ATO notices of assessment or tax returns — prove income and help lenders estimate your serviceability.
• 3–6 months of bank statements — showing genuine savings and regular income. Lenders look for consistent budgeting habits alongside your savings history.
• Contract of sale, rental ledger (if renting) and any scheme nomination paperwork — required for valuation, rental assessment and scheme nominations. See the 5% Scheme Information Guide for nomination detail.

Expect pre-approval in a few days, while formal approval, valuation and settlement checks commonly take one to four weeks depending on the lender and how complete your documents are. Upload everything in one go and keep digital copies to minimise delays and avoid repeated requests.