How much can I borrow?
Before you hit the open homes, a good place to start is to get an idea of how much you can borrow. This depends on how much you’ve saved for a deposit (or will have saved), your income and your partner’s (if buying together), and your outgoings like living expenses and any loan repayments.
How much can I afford in repayments?
Make sure you have the right deposit
Calculate your savings Show content
How much will I need for a deposit? Show content
What is the Loan to Valuation Ratio (LVR)? Show content
How much will I need upfront?
As well as a deposit, there are other upfront costs to keep in mind. Some common ones are:
- Lenders’ Mortgage Insurance
- Lending fees
- Moving costs
- Stamp duty
- Legal and conveyancing fees
- Building and pest inspection
- Utilities connections
- Home and building insurance
What do these costs mean?
What is Lenders’ Mortgage Insurance? Show content
Get a building and pest inspection Show content
How much is stamp duty? Show content
Can I get a First Home Owner Grant? Show content
What’s the best home loan for me?
Fixed interest rate loans
- Give you more certainty and make it easier to budget because you know exactly what your repayments are for a set period of time.
- Protect you against interest rate rises, but if interest rates fall you miss out on the savings.
- Often have a higher rate than variable loans because you pay to ‘lock-in’ your rate.
- If you decide to change your financial institution, sell your home, or pay off your loan within the fixed period, you may be charged an early payout fee.
Variable interest rate loans
- Are subject to market conditions – if rates fall it’s likely your variable rate will fall too and your loan repayments will decrease. If rates rise, so might your repayments.
- Usually give you more features and flexibility – like an offset account, the ability to make extra repayments and to pay off or move your loan without penalty or an early pay out fee (but they may have a discharge fee).
- Offset lets you use money in linked accounts to ‘offset’ your home loan. This means the balance in your accounts is offset daily against your loan, reducing the amount of interest you pay and your loan term. For example; if you have a loan of $500,000 and a balance of $10,000 in your offset account/s, you’ll only pay interest on $490,000 instead of $500,000.
- Can have different features. 100% offset means you can deduct the full balance of your linked account/s from your loan.
- Often have a minimum balance requirement that applies to your linked accounts.
- No interest is earned on offset accounts.
- Allows you to pay more than the contracted or minimum loan repayment amount. If your monthly repayment is $2300 you may decide to pay $2500 instead.
- Helps you to pay off the loan faster and reduces your interest payments.
- You can also make lump-sum repayments, for example, if you receive a bonus or an inheritance.
- This feature provides access to the extra and additional repayments you’ve made on your loan.
- You can take out (redraw) money from your ‘repayments in advance’ or ‘redraw balance’ whenever you need to, which can come in handy.
- When comparing loans, always look at the comparison rate. While one loan may have a lower interest rate than another, it may have fees and charges that actually make it more expensive.
- It can help you compare the overall cost of each loan.
- In Australia, comparison rates are always calculated on a standard loan amount of $150,000 and a loan term of 25 years with monthly repayments.
- Although a useful guide, the comparison rate calculation doesn’t include benefits like offset accounts and the ability to make extra repayments and some fees may be excluded.
Getting a home loan
- Getting pre-approval means when you do find that perfect place you can act quickly and confidently, knowing how much you can offer.
- To get pre-approval, your income, outgoings and savings are considered to work out how much you can afford to borrow.
- It’s obligation free (you don’t have to take out the loan) and is usually valid for 90 days. If you don’t find a property during this time, it can be easily renewed.
- Pre-approval is different from final approval. Pre-approval is only based on your ability to borrow. Final approval is given when you’ve found your new home and you want to make a formal loan application.
Which home loan suits me?
CUA Fresh Start Variable ~80%80%Variable4.26 %
Owner occupier4.74 %
Investor rate4.27 %
Comparison rate4.75 %
CUA Fresh Start Basic Variable ~90%90%Variable3.99 %
Owner occupier4.66 %
Investor rate4.04 %
Comparison rate4.71 %
CUA Fresh Start Access Variable ~95%90%Variable4.31 %
Owner occupier4.79 %
Investor rate4.32 %
Comparison rate4.80 %
CUA Rate Breaker Package ^95%90%Variable4.27 %
Owner occupier4.57 %
Investor rate4.62 %
Comparison rate4.91 %
CUA Premium Fixed Rate 2 Year #95%90%Fixed4.06 %
Owner occupier4.31 %
Investor rate4.75 %
Comparison rate5.22 %
CUA Fixed Rate 2 Year #95%90%Fixed3.84 %
Owner occupier4.09 %
Investor rate4.71 %
Comparison rate5.18 %
CUA Equity Line of Credit80%90%Variable5.56 %
Owner occupier5.56 %