First Home Buyer Home Loans Options: Choose the Best One

If you are looking to buy your first home in Australia, then you need to look after various things. When you decide on first home buyer home loans Sydney that match your circumstances, then you need to do some research beforehand. Buying a house for the first time can be a daunting task for you if you are facing budget issues. However, you can have various home loan options if you are buying for the first time. You may want to be confident about your decision for taking a home loan, but when you have an array of home loan options, and then it would become difficult for you to choose one.

Before you get started, you need to determine whether you are eligible for a home loan or not. The best home loan for first-home buyers will vary as per your circumstances. In today’s blog, we’ll discuss what you should consider when looking for a home loan as a first home buyer:

What to Consider for First Home Buyer Home Loans Options?

When you are looking to buy your first home, then you may look for various home loan options, right? Before you choose any home loan option, consider the following points:

  • Principal and Interest or Interest Only
    Principal and interest is considered the most common type of home loan. This type of home loan allows you for repayments which mean you will pay some part of the principal along with the interest on that amount. On the other hand, an interest-only loan will make you pay back only interest for a specific set period but ensure to do it carefully, however when your repayments go high once that set period ends, you begin paying off the principal and interest.

You can opt for interest only if you already know that your budget will be low for a few years, for equity-building purposes, or in the case of property investors. If you opt for this type of first home buyer home loans, you must ensure you make a budget for the end of the interest-only time, as your loan will switch back to the principal and interest repayments.

  • Variable Rate or Fixed Interest Rate Home Loan
    First home buyer loans Australia can have two types of home loan rates such as fixed or variable, or sometimes, both. When it comes to a fixed-rate loan, your interest rate will be fixed for a certain period of time. When it is the end of this period, you can opt for another fixed rate or switch to a variable interest rate. For budgeting, choosing a fixed-interest rate home loan would be the best option as you will know your repayments will be the same every time. However, you need to keep one thing in your mind you have to pay the same interest rate irrespective of whether the market rates drop.

On the other hand, when it comes to a variable-rate home loan, then the interest rate may go up and down because of market fluctuations. Basically, variable rate home star home loans are categorised into two types, such as:

  • Standard variable rate home loans: these types of loans include features such as a line of credit and an offset account, redraw facilities, and you can use your savings to pay little interest on your home loan.
  • Basic variable rate home loans: these loans offer lower interest rates.

Many people ask whether they should choose a fixed or variable-rate home loan. Well, the answer is tricky, but in simple words, it can be said that it will depend on your personal circumstances and preferences which first home buyer home loans option is better for you.

If you have a low budget and you’d choose the security of knowing how much your repayment will be each month, then a fixed rate home loan will be preferred and set for a specific time period.

On the flip side, if you don’t have any issue regarding interest rate whether it goes up or down, then you can choose a variable rate home loan. If you are confused about what you should choose, then you can take help from a home loan broker.

  • Deposit Requirements
    When you apply for a home loan as a first home buyer, then saving up a deposit might be challenging for you. Some lenders may allow you a little deposit of 10% or even 5% of the property’s worth. As a result, it can save you time and allow you to buy your first home soon. However, the thing that you need to keep in your mind is that the smaller your deposit, the larger your home loan that could take a longer time to pay off the home loan.

First Buyers Home Loan Grants

If you are a first-home buyer, then you can access various government grants and concessions. You can access those grants and concessions, but only if you are eligible for those grants. Every state and territory has different eligibility criteria to access those grants. The following are the most common government grants:

  1. Stamp Duty Exemptions
  2. First Home Owners Grant (FHOG)
  3. Home Guarantee Scheme
    1. First Home Guarantee Scheme (FHBG)
    2. Family Home Guarantee Scheme
    3. Regional Home Guarantee (RHG)


When you are looking to purchase your first home by taking a home loan, and then make sure to consider all of the above points. Despite this, you can also look for first buyers home loan grant as government offers different grants and concessions for first home buyers. For more details, you can also contact Star Homeloans.

Other Useful Links
1) Personal Loan Finance Broker Sydney

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