Most lenders typically require about a 20% deposit of the property’s price for a home loan. If you have less than a 20% deposit, you will generally need to pay for Lender’s Mortgage Insurance (LMI), which protects the lender if you default on the loan. Some first-home buyer programs and lenders allow smaller deposits (sometimes 5–10%), but these often come with extra costs or conditions (for example, paying LMI, using a family guarantor or qualifying for a government scheme).

While it’s not legally required, we strongly recommend getting pre-approval before you start looking. It gives you a clear idea of your borrowing capacity, helps you make stronger offers, speeds up the finance process and uncovers any potential issues early - like credit or policy mismatches. Without it, you risk delays or disappointment if your loan can’t be approved in time. Pre-approval isn’t a guarantee, but it’s one of the smartest first steps you can take to house hunt with confidence.

Your borrowing power depends on your financial situation and each lender’s criteria. Lenders will assess factors such as your income, your regular living expenses and any existing debts or financial commitments, as well as your credit history and credit score. In general, the more income you earn (and the fewer expenses and debts you have), the more you can borrow. Keep in mind lenders also apply a “serviceability buffer” – they test your ability to make repayments at an interest rate a few percentage points higher than the current rate, to ensure you could still afford the loan if rates rise.

This is a very common question. With a fixed interest rate, your rate is locked in for a set period (e.g. 1–5 years), so your monthly repayments stay the same during that time. This stability makes budgeting easier. With a variable interest rate, the rate (and your repayments) can move up or down over time as market interest rates change. Variable loans often offer more flexibility, for example, many allow extra repayments or have an offset account to help reduce interest. Some borrowers also choose to split their loan (part fixed, part variable) to get the security of a fixed rate on a portion and the flexibility of a variable rate on the rest.

Refinancing means switching your current home loan to a new loan, either with your existing lender or a different lender - usually to get a better deal. Many borrowers refinance to secure a lower interest rate, reduce their monthly repayments or to access equity (cash out some of the home’s value for renovations, investments, etc.). Refinancing can save you money over time if you find a cheaper rate or more suitable loan features. However, it’s important to consider the costs of refinancing, for example, you might face exit fees or break costs on your current loan and upfront application or settlement fees on the new loan. You should only proceed with refinancing if the overall benefit (e.g. interest savings) outweighs these costs.

With a principal-and-interest (P&I) loan, each repayment covers the interest due and pays down part of the loan principal, so you are gradually reducing your debt over time. In contrast, an interest-only loan (for an initial period, say 5 years) means your payments cover only the interest charges and do not reduce the principal - your outstanding loan amount stays the same during that interest-only period. An interest-only loan gives you lower monthly repayments at first (since you’re not paying off the principal), which can help with cash flow. This is why property investors often use interest-only loans. However, there are trade-offs: because you’re not reducing the balance, you’ll end up paying more interest overall in the long run and after the interest-only period ends, your repayments will jump up (since you then have to start paying off the principal, usually over a shorter remaining term).