Buying a home is a major financial decision. Understanding your funding options early can help you plan with greater confidence and avoid surprises along the way.
Ezifin with home lending options is coming soon!
We are working towards bringing home lending solutions to Ezifin, giving eligible borrowers another way to explore their home financing needs. Stay tuned for more information about Ezifin and how you can access our upcoming home loan solutions.
For many Australians, owning a home is an important goal. But getting there involves more than simply finding the right property. You need to consider your deposit, borrowing capacity, upfront costs, ongoing repayments and whether the funding structure is right for your circumstances.
The good news is, is that you don’t have to work through this process alone. The right advice, the right experience and best intentions go a long way in leaving you feeling confident and supported when dealing with property.
Start with what you can afford
Before you start seriously looking at properties, it is important to understand what you can realistically afford. Lenders generally consider factors such as your income, existing debts and financial commitments, deposit, expenses and overall financial position when assessing a home loan application. It is also important to consider whether you could continue making repayments if your circumstances change. Lenders also assess whether a borrower is likely to be able to meet their repayments under higher interest rate scenarios. For example, APRA currently requires authorised deposit taking institutions to apply a minimum 3 percentage point serviceability buffer when assessing residential mortgage lending.
Understanding your financial position early can help you set a realistic property price range, makes the buying process more manageable and supports your property buying goal.
Your deposit isn’t the only cost
One of the most common mistakes for prospective home buyers is focusing only on the deposit.
There can be a range of additional costs associated with purchasing a property, including:
- Stamp duty and government charges
- Conveyancing and legal costs
- Building and pest inspections
- Loan and valuation fees
- Insurance
- Moving costs
- Council rates and ongoing property expenses
Depending on the size of your deposit and the structure of your loan, you may also need to consider Lenders Mortgage Insurance (LMI). For example, the NSW Government identifies transfer duty, LMI, building and pest reports, legal and conveyancing fees, mortgage registration and loan related fees as potential costs when purchasing a property. Ongoing costs can also include council rates, utilities, insurance, strata levies and maintenance.
Planning for the full cost of buying a home rather than just the purchase price can help you make a more informed decision.
Government support may be available
Depending on your circumstances, there may be government programs designed to help eligible Australians enter the property market.
For example, the Australian Government 5% Deposit Scheme currently allows eligible first-home buyers to purchase a home with a minimum 5% deposit, subject to the scheme’s eligibility requirements, property price caps and lending criteria. Eligible single parents and legal guardians may have access to a 2% minimum deposit pathway.
The scheme has also removed income caps and waiting lists and provides eligible borrowers with a government guarantee that can help reduce the need for LMI. However, the government guarantee does not mean the borrower is guaranteed loan approval. Applicants must still meet the participating lender’s credit and lending requirements.
Government programs can change over time, so it is important to check the current eligibility criteria and conditions before relying on any particular scheme when planning a property purchase.
What if a traditional home loan doesn’t fit your situation?
A traditional home loan may be appropriate for many buyers, but not every borrower’s circumstances are straightforward.
Some people may have more complex financial circumstances, variable income or other considerations that make their funding requirements different from a standard application. This doesn’t automatically mean alternative finance is the right answer. However, it can be worthwhile understanding the options available to you and speaking with a finance professional before making a decision.
The key is to find a funding structure that suits your circumstances rather than simply choosing the first available option or simply choosing the best interest rate ie: not all interest rates are a true reflection of the total cost of a loan.
How Ezifin can support your property goals?
At Ezifin, experience often trumps a thought, So we believe funding should start with understanding what you are trying to achieve, what are your short/long term goals and how can purchasing a property influence your future.
Our focus is on helping clients and partners explore funding solutions across most lending options, including private credit-secured business lending, R&D finance, and soon to be asset and consumer finance (inc home loans). Depending on your circumstances and eligibility, having alternative options allows you to select ultimately what is in your best interest.
For property-related situations, the first step is understanding the bigger picture:
“What are you trying to achieve? What is your current financial position? What property are you considering? And what funding options could potentially support your plans?”
From there, the right finance professional can help you understand what may be available and whether it is appropriate for your circumstances.
Don’t just look at the interest rate
When comparing home-loan options, the interest rate is important, but it isn’t the only thing to consider.
You should also look at:
- Fees and charges
- Loan term
- Repayment structure
- Loan features
- Comparison rate
- Flexibility
- Your ability to manage repayments over time
A loan that looks attractive at first may not necessarily be the right fit once you consider the complete cost and structure.
Think beyond the purchase
Buying a home is a long-term financial commitment. Before proceeding, consider what your finances could look like after settlement. You may need to manage mortgage repayments alongside rates, insurance, maintenance, utilities and other household expenses. It can also be useful to think about what could happen if your income changes, interest rates rise or an unexpected expense occurs.
The goal isn’t simply to find a way to purchase a property. The goal is to find a way to purchase a property that you can comfortably manage over time.
Get support before you make a decision
You don’t need to wait until you have found your dream home before getting your finances organised.
Getting professional guidance early can help you understand:
- What you may be able to afford
- How much deposit you may need
- The additional costs involved in buying a property
- What loan or funding options may be available
- Whether alternative funding may be relevant to your circumstances
- What your repayments could look like
Your circumstances are unique, so there is no single funding solution that works for everyone.
Your property goal comes first
Buying a home should complement you in finding the ultimate loan.
It is about finding a funding approach that supports your goals, your circumstances and your long-term financial position.
Revenue NSW – Transfer Duty
https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/transfer-duty/understanding-transfer-duty/what-is-transfer-duty
Australian Prudential Regulation Authority (APRA) – APS 220 Credit Risk Management
https://www.apra.gov.au/standards/aps-220
APRA – Current Macroprudential Policy Settings
https://www.apra.gov.au/news-and-publications/apra-maintains-current-macroprudential-policy-settings-highly-uncertain
Australian Government – 5% Deposit Scheme for First Home Buyers
https://firsthomebuyers.gov.au/australian-government-5-percent-deposit-scheme/first-home-buyers
Australian Government – 5% Deposit Scheme FAQs
https://firsthomebuyers.gov.au/australian-government-5-percent-deposit-scheme/5-percent-tools-and-resources/faqs
NSW Government – Buying Property in NSW
https://www.nsw.gov.au/housing-and-construction/buying-and-selling-property/buying-property-nsw
NSW Government – Costs When Buying a Home
https://www.nsw.gov.au/housing-and-construction/buying-and-selling-property/buying-property-nsw/planning-your-finances/costs-when-buying-a-home