What should first home buyers look for in a home loan and how do you find the most appropriate loan for yourself?
A large percentage of people head straight to their own or another bank when deciding to apply for a home loan. There are many reasons why you should use a mortgage broker when searching for your home loan, even if you want to use your current bank for your first home loan, it’s always good to at least consider your options.
Recent regulatory scrutiny on investment lending has led to some lenders offering special home loan products, specifically for first home buyers. We take a look at some of the special home loan offers that are on currently offer through our exclusive first home buyer mortgage broking service – FHBA Mortgages.
1. Big 4 bank special – hot 2 year fixed rate¹
One of Australia’s big 4 banks is currently offering first home buyers a record low 3.69% per annum (comparison rate 4.92%) fixed rate for two years, for owner occupier, principal and interest loans. This compares to their current advertised 2-year Fixed Rate for Home Loans rate of 3.98% per annum for all other owner occupiers.
This product is available to first home buyers who are borrowing up to 90% of the property value.
2. 5 year fixed rate offer under 4%
This offer is only available for all applications (or pre-approval applications) submitted prior to 30 June 2017 and is available to first home buyers only.
Key features of this offer include:
- 5 year fixed rate at 3.99% (comparison rate 4.38%)
- Can borrow up to 95% of the property purchase price (inclusive of LMI³)
- Waiver of first year’s annual package fee
- $1,000 discount on the LMI premium (if applicable)
- Minimum lending amount required is $150,000
3. Low deposit home loan + LMI capitalisation²
One lender on the FHBA Mortgages panel is offering a special low deposit home loan with a 5% deposit and allowing you to borrow up to 97% including Lenders Mortgage Insurance (LMI).
The product comes with the following features:
- The 5% deposit must be made up of genuine savings or 6 months rental payments history. Genuine Savings must be savings or shares that you have held or accumulated over a period of 3-6 months
- LMI can be capitalised onto the loan up to 97% of the property purchase price (first home buyers only)
- For owner occupiers only
- Competitive fixed and variable rates
- Applicable for construction loans
4. Loans for degree qualified professionals + teachers + emergency services personnel
FHBA Mortgages has access to specialist lenders who offer 40-year loan terms to the professionals listed above. Other key features of these lenders include:
- Allow non-genuine savings to be used as a deposit
- FHOG accepted as a deposit (great option for regional Victorian first home buyers and QLD first home buyers where the grant is $20,000)
- Applicable for construction loans and off-the-plan properties
- Allow you to borrow 95% of the property purchase value
- LMI capitalisation allowed up to 98%
- Fixed rates available from 4.10%
Glossary of Terms:
¹Fixed Rate – A fixed interest rate loan is a loan where the interest rate doesn’t change during the fixed rate period of the loan giving you certainty in your repayments
²LMI Capitalisation – Whereby the Lenders Mortgage Insurance premium is not paid upfront by the borrower but instead added onto the total loan balance and therefore paid over the term of the loan by the borrower
³LMI – Lender’s Mortgage Insurance is an insurance policy that protects the lender from financial loss in the event that the borrower can’t afford to keep up their home loan repayments
Every aspiring first home buyer’s situation is different; therefore it is important to get some expert advice on which product is suited to your needs.
Are you looking to compare these different home loan products? Perhaps you just want to know your borrowing capacity or get a better understanding of how your first home loan works? Click here to speak with an FHBA Mortgage Broker.
In other exciting news, we are proud to announce that we will soon be launching a weekly segment which will feature our ‘First home buyer home loan of the week‘, proudly brought to you by FHBA Mortgages. Stay tuned!
Disclaimer: The information on our website including this page is general in nature and should be solely relied upon. The advertised rates above were true and correct at the time of the publication. The rates do not take into account other fees and charges which you should also consider. Depending on your circumstances you may or may not be eligible for any of the individual loan deals. The credit license responsible for the mortgage service offered to clients is Mortgage Australia Group Pty Ltd, Australian Credit License (ACL) number 377294, Australian Business Number (ABN) 99 091 941 749. Mortgage Australia Group Pty Ltd is a member of the Mortgage & Finance Association of Australia (MFAA). FHBA Pty Ltd is an authorised credit representative of Mortgage Australia Group Pty Ltd. You should seek professional advice when obtaining finance and purchasing your first property.
Written By,
First Home Buyers Australia
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