First Home Buyer Home Loans

You can buy with as little as 5% genuine savings if you’re willing to pay lender’s mortgage insurance. Most Perth lenders will lend at 95% LVR (loan-to-value ratio) with LMI covering the risk. If you have a family member willing to guarantee the loan using equity in their home, you can borrow with 0% cash deposit—the guarantor’s equity substitutes for your deposit. The sweet spot for avoiding LMI entirely is 20%, but waiting that long often costs more in rent and missed property appreciation than the LMI premium itself. Andy runs the exact numbers in the first meeting so you can compare the cost of waiting vs the cost of buying sooner.

The WA First Home Owner Grant is $10,000 and applies only to new homes or substantially renovated homes valued under $750,000. You must be an Australian citizen or permanent resident, at least 18 years old, and you can’t have previously owned property in Australia. The grant doesn’t apply to established (existing) homes—so if you’re buying a 1990s brick-and-tile in Rockingham, you don’t get the grant, but you still get the stamp duty concession if the property is under $530,000. The grant is paid at settlement and can be used toward your deposit or to reduce the loan amount.

LMI is a one-off premium the lender charges when you borrow more than 80% of the property value—it protects them if you default, not you. The cost scales with your LVR: expect $5,000–$7,000 at 85% LVR, $9,000–$12,000 at 90% LVR, and $15,000–$18,000 at 95% LVR on a $450,000 home. You can capitalise LMI into the loan (borrow it) rather than paying cash upfront. The only ways to avoid LMI: put down 20% cash, use a family guarantor, or qualify for a professional-package loan (some lenders waive LMI for doctors, lawyers, accountants at 90% LVR). Andy’s view: if paying LMI gets you into the market two years sooner and property prices rise 5% annually, the LMI cost is cheaper than the opportunity cost of waiting.

A guarantor (usually Mum or Dad) uses equity in their own home as security so you can borrow 100%+ of the purchase price without a cash deposit. The guarantor doesn’t hand over money—they’re just offering their property as additional security. Most lenders limit the guarantee to 20% of your loan amount, and the guarantee drops off automatically once you’ve paid down the loan to 80% LVR (typically 2–5 years). The guarantor remains liable for that 20% portion if you default, so it’s a serious commitment. Andy structures these weekly for Perth families—common in Pinjarra, Baldivis, and Mandurah where parents want to help without gifting $50,000 cash. Full details: Guarantor Home Loans.

Yes, but lenders treat self-employed and casual income cautiously. For self-employed borrowers, most lenders want two years of tax returns showing consistent profit, plus your latest BAS statements and accountant’s declaration. If you’ve only been self-employed for 12 months or your income is variable, a low-doc lender can use 12 months of bank statements instead—slightly higher rate, but approvable. For casual employees, you need 12 months of payslips with the same employer and evidence your shifts are regular (not sporadic). If you’re a tradie on an ABN doing subbying work, that’s treated as self-employed. Andy works with self-employed first-timers every month—there’s always a structure that works*. More: Self-Employed & Low Doc Home Loans.

Variable rates move with the market—if the RBA cuts rates, your repayments drop; if they rise, repayments increase. You can make extra repayments without penalty and access offset or redraw facilities. Fixed rates lock your interest rate for 1–5 years, protecting you from rate rises but blocking you from extra repayments beyond $10,000–$30,000/year (depending on lender) and usually excluding offset accounts. As of mid-2025, Perth variable rates sit around 6.1–6.5% for owner-occupiers; 1-year fixed rates are 5.8–6.2%, 3-year fixed 5.9–6.4%. Andy’s recommendation for first-timers: split the loan 50/50 variable-fixed or go 70% variable/30% fixed so you have flexibility for extra repayments while hedging part of the rate risk. He doesn’t push one over the other—your cash flow and risk tolerance decide.

Pre-approval (conditional approval) is valid for 90–120 days depending on the lender. It’s a binding commitment from the bank that they’ll lend you the approved amount, subject to a satisfactory property valuation and no material change in your circumstances (e.g. you don’t quit your job or rack up $20,000 in new debt). Real estate agents in Perth and Mandurah treat pre-approval seriously—it proves you’re finance-ready and strengthens your offer. Once you find a property and make an offer, Andy orders the valuation and triggers formal approval, which typically takes another 5–10 business days. More detail: What Is Pre-Approval and How Long Does It Last?.

New builds qualify for the $10,000 First Home Owner Grant and full stamp duty exemption up to $750,000 purchase price in WA (as of 2025). They often have longer settlement periods (6–12 months if off-the-plan), lower maintenance in the first 5 years, and builder’s warranty. Established homes don’t qualify for the grant, but you can move in faster (4–6 week settlements), they’re often in more established suburbs closer to schools and shops, and you’re buying a known product (no construction delays). The financial trade-off: new builds let you borrow more (the grant becomes part of your deposit), but established homes in the same suburb are typically $20,000–$40,000 cheaper. Andy walks through both scenarios—if the grant and stamp duty saving total $15,000+ and you’re happy waiting for a new build in Baldivis or Secret Harbour, it’s often the smarter financial play.

An offset account is a transaction account linked to your home loan—every dollar in the offset reduces the loan balance you’re charged interest on. If you have a $400,000 loan at 6.2% and $20,000 sitting in offset, you only pay interest on $380,000, saving roughly $1,240/year. Offset accounts are standard on most variable-rate Perth home loans and cost nothing extra. Andy recommends them for every first-timer: dump your salary into offset, pay bills from there, and let the balance float—it’s free interest saving without locking money away. Fixed-rate loans usually don’t offer offset, which is why Andy often suggests a split loan if you want some fixed-rate certainty but still want offset flexibility. More: What Is an Offset Account vs a Redraw Facility?.

Yes, but existing debts reduce your borrowing capacity. Lenders use your debt-to-income ratio—total monthly debt repayments divided by gross monthly income—and most won’t lend if total debts (including the new home loan) exceed 6–7 times your annual income. A $15,000 car loan with $350/month repayments cuts your home loan capacity by roughly $70,000. Credit cards are treated harshly: lenders assume you’ll max out the limit, so a $10,000 card with a $0 balance still costs you ~$50,000 in borrowing power. Andy’s strategy: pay down or close high-limit credit cards 2–3 months before applying, and if a car loan has 12 months left, consider paying it out using savings or a small personal loan refinance to free up serviceability. He runs the numbers in the first meeting so you know whether to clear debt first or proceed as-is.

If you’ve offered $460,000 and the bank valuer assesses the property at $440,000, the lender will only lend against the $440,000 figure—so your loan-to-value ratio jumps. If you were borrowing 90% ($414,000), you’re now at 94% LVR and may need a bigger deposit or cop higher LMI. You have three options: renegotiate the price down (agents hate this but it happens), find extra deposit cash, or walk away if your contract has a finance clause. Andy orders the valuation as soon as your offer’s accepted and flags valuation risk upfront—if you’re buying in a thin market (rural fringe, unusual property type), he’ll warn you before you’re committed. Around 8–12% of Perth home loans hit a valuation shortfall; it’s fixable but stressful if you’re not prepared.