The Complete Australian Home Loan Guide 2026

Most Australian lenders require a minimum 5% deposit, but a 20% deposit avoids Lenders Mortgage Insurance (LMI). First home buyers may qualify for government schemes allowing deposits as low as 2-5% without LMI through the Home Guarantee Scheme.

Most Australian lenders prefer a credit score of 600 or above for standard home loans. Scores above 700 typically qualify for the best rates. Some specialist lenders consider scores below 500, but expect higher interest rates and stricter conditions.

Australian lenders typically allow borrowing 6-8 times your annual gross income, subject to expense assessment under responsible lending laws. A household earning $150,000 per year may borrow approximately $900,000-$1,100,000 depending on existing debts and living expenses.

Yes, Australian permanent residents can access the same home loan products as citizens, including government schemes like the First Home Owner Grant. Temporary visa holders can also get home loans but face stricter lending criteria and typically need a 20% deposit.

Fixing provides repayment certainty but removes flexibility. In 2026, fixed rates range from 6.49%-6.84% while variable rates sit around 6.13%-6.84%. Split loans can balance certainty with flexibility. Which option suits depends on your circumstances - our accredited broker partner can provide personalised guidance.

Your monthly repayments increase when variable rates rise. A 0.25% rate increase on a $600,000 loan adds approximately $95 per month to repayments. Budget for potential rate increases of 1-2% above your current rate as a safety buffer.

Yes, many Australian lenders offer home loans with a 5% deposit. You will need to pay Lenders Mortgage Insurance (LMI), which typically costs $8,000-$35,000 depending on the loan amount. First home buyers may avoid LMI through government guarantee schemes.

Yes, offset accounts reduce interest on your home loan by offsetting your loan balance with your savings. With $50,000 in an offset account on a $600,000 loan at 6.2%, you save approximately $3,100 per year in interest and shorten your loan term significantly.

A redraw facility lets you withdraw extra repayments you have made on your home loan. Unlike an offset account, funds are held within the loan itself. Redraws are free with most lenders but may have minimum withdrawal amounts of $500-$1,000.

LMI is a one-off insurance premium that protects the lender (not you) if you default on your loan. It applies when your deposit is less than 20% of the property value. LMI costs between 1-4% of the loan amount and can be capitalised into the loan.

The FHOG is a one-off payment from your state or territory government to eligible first home buyers. Amounts range from $10,000 to $30,000 depending on the state and whether you are buying or building. It applies to new homes only in most states. See our first home buyers hub for the state-by-state grant table.

Pre-approval typically takes 1-3 business days for digital lenders and 3-7 days for major banks. Full unconditional approval takes 2-4 weeks on average, depending on property valuation, documentation completeness, and lender processing times.

Pre-approval (conditional approval) is a lender's indication they will likely lend to you, valid for 60-90 days. Unconditional approval (formal approval) is a binding commitment after full property valuation and document verification. Always get pre-approval before house hunting.

Yes, refinancing to a new lender is common in Australia. The process takes 4-8 weeks and may involve discharge fees ($150-$400), new application fees, and property valuation. Refinancing typically saves $2,000-$5,000 per year if you secure a rate 0.5% lower.

Compare using the comparison rate, not the advertised rate. The comparison rate includes most fees and charges, giving a truer cost picture. Also compare offset account options, redraw facilities, extra repayment flexibility, and discharge fees. Compare 30+ lenders on find.deals™ instantly.