Frequently Asked Questions (FAQ) 

General Home Loan Questions 

What does a mortgage broker do?

A mortgage broker acts as an intermediary between borrowers and lenders. Instead of approaching a single bank, a broker compares loan products from multiple lenders to help find a suitable option for your financial situation.

A broker can help you:

• Understand how much you may be able to borrow

• Compare loan options from different lenders

• Explain interest rates, loan features and fees

• Prepare and submit your home loan application

• Manage the process through to settlement

Many borrowers choose to work with a broker because it simplifies the lending process and provides access to a wider range of loan options.

Does it cost anything to use a mortgage broker?

In many cases, borrowers do not pay a fee to use a mortgage broker. Brokers are often paid a commission by the lender once the loan settles.

However, fee structures can vary between brokers and lenders, so it is always important to confirm this upfront before proceeding with an application.

How much can I borrow for a home loan?

Your borrowing capacity depends on several factors, including:

• Your income

• Your employment type

• Existing debts

• Living expenses

• Credit history

• Deposit amount

Lenders assess these factors to determine how much you may be able to borrow. Speaking with a mortgage broker can help you estimate your borrowing capacity before you begin searching for a property.

How much deposit do I need for a home loan? 

• Deposit Amount of 20%: No Lenders Mortgage Insurance (LMI) required; lowest risk; easier approval process.  

• Deposit Amount of 5% – 19.99%: LMI is typically required, unless a government scheme or lender waiver applies.

• Deposit Amount of 5% with Government Guarantee: Eligible first home buyers can avoid LMI.

• Deposit Amount of 2% for Single Parents/Legal Guardians: No LMI is required under the Family Home Guarantee program.

• Guarantor/Equity Options: These can help reduce or eliminate the need for a cash deposit.

How long does it take to get home loan approval?

Approval times vary depending on the lender and the complexity of the application.

• Generally, the process includes:

• Initial consultation and assessment

• Pre-approval application

• Formal loan application

• Valuation and lender assessment

• Loan approval and settlement

In many cases, pre-approval may be obtained within a few days once all required documents are provided.

What documents are needed for a home loan application?

Common documents lenders require include:

• Identification (passport or driver’s licence)

• Recent payslips or proof of income

• Bank statements

• Evidence of savings or deposit

• Details of existing debts or liabilities

Additional documents may be required depending on your employment type or financial situation.

What is loan pre-approval?

Pre-approval (also called conditional approval) is an indication from a lender that they may be willing to lend you a certain amount, based on your financial information.

Pre-approval can help you:

• Understand your budget/

• Search for properties with confidence

• Strengthen your position when making an offer

However, final approval is still subject to lender checks and property valuation.

What is refinancing?

Refinancing means replacing your current home loan with a new one. Borrowers refinance for several reasons, including:

• Reducing their interest rate

• Accessing equity in their property

• Consolidating other debts

• Changing loan features or terms

Refinancing can help improve your loan structure, but it is important to consider costs such as discharge fees or new loan fees.

When should I consider refinancing?

You may consider refinancing if:

• Interest rates have dropped since you took out your loan

• Your financial situation has changed

• You want to access equity for renovations or investment

• Your fixed loan term is ending

A mortgage broker can review your current loan and determine whether refinancing may benefit your situation.

What is the difference between owner-occupied and investment loans?

Owner-occupied loans are for properties you intend to live in. Investment loans are used to purchase properties intended to generate rental income or capital growth.

Lenders may apply different interest rates, lending policies, and deposit requirements depending on the loan purpose.

Why should I use a mortgage broker instead of going directly to a bank?

Banks can only offer their own loan products. Mortgage brokers typically work with multiple lenders and can compare different loan options.

This allows borrowers to explore a wider range of products and potentially find a loan that better suits their financial goals.

What government schemes are available for home buyers?

Commonwealth and state governments offer several schemes designed to help eligible buyers enter the property market sooner.

Some of the most common programs include:

• First Home Guarantee

• Family Home Guarantee

• Regional First Home Buyer Guarantee

• Help to Buy Scheme

• First Home Super Saver Scheme

• First Home Owner Grant

These programs are designed to help buyers with smaller deposits, reduce upfront costs, or improve borrowing accessibility.

What is the Home Guarantee Scheme?

The Home Guarantee Scheme is an initiative administered by Housing Australia to help eligible home buyers purchase property with a smaller deposit.

Normally, lenders prefer a 20% deposit. If your deposit is lower, you may need to pay Lenders Mortgage Insurance (LMI). Under the scheme, the government provides a guarantee to participating lenders, allowing eligible buyers to purchase a property with a smaller deposit without paying LMI.

The scheme includes several guarantees tailored to different borrower situations.

What is the First Home Guarantee?

The First Home Guarantee helps eligible first home buyers purchase property with a deposit as low as 5% without paying Lenders Mortgage Insurance.

Under this scheme:

• Buyers may purchase a property with a 5% deposit

• The government guarantees up to 15% of the loan to the lender

• The property must be owner-occupied

• Income caps and property price limits apply

The guarantee does not provide cash to the buyer; it simply supports the lender in case of default.

What is the Family Home Guarantee?

The Family Home Guarantee is designed to help eligible single parents with at least one dependent child purchase a home.

Key features include:

• Deposit requirement from as little as 2%

• No Lenders Mortgage Insurance required

• Must live in the property as an owner-occupier

This scheme aims to make home ownership more accessible for single-parent households.

Can I avoid Lenders Mortgage Insurance (LMI)?

Yes, in some cases you may be able to avoid paying Lenders Mortgage Insurance (LMI) even if your deposit is less than 20%.

Many lenders offer LMI waiver policies for certain professions and essential workers. This allows eligible borrowers to purchase a property with a smaller deposit (often 10% or sometimes less) without paying the LMI premium, which can save tens of thousands of dollars.

Eligibility requirements vary between lenders and may depend on your profession, income level, employment status and registration with the relevant professional body.

Who may qualify for an LMI waiver?

Depending on the lender, the following professionals may be eligible for LMI waivers or reduced LMI if they meet specific criteria.

Medical Professionals:

Accredited under recognised Australian registration boards, including:

• Medical Board

• Chiropractic Board

• Dental Board

• Medical Radiation Practice Board

• Nursing and Midwifery Board

• Optometry Board

• Occupational Therapy Board

• Osteopathy Board

• Paramedicine Board

• Pharmacy Board

• Physiotherapy Board

• Podiatry Board

• Psychology Board

Other recognised professionals may include:

• Pathologists

• Veterinarians

• Psychiatrists

Finance & Accounting Professionals Eligible professionals may include:

• Chartered Accountants (CA)

• Certified Practising Accountants (CPA)

• Actuaries (FIAA)

• Chartered Financial Analysts (CFA)

• Financial Planners holding a valid AFSL

Legal Professionals

• Solicitors registered with their relevant State Law Society

• Barristers registered with the relevant State Bar Association

Aviation Professionals:

• Commercial Pilots

• Air Traffic Controllers

Must hold a valid licence issued by the Civil Aviation Safety Authority (CASA).

Construction & Built Environment Professionals:

• Construction Project Managers registered with Australian Business and Licence Information Service

• Quantity Surveyors registered with the Australian Institute of Quantity Surveyors

• Urban and Regional Planners registered with the Planning Institute of Australia

• Land Surveyors registered with the relevant State Surveyors Board

• Architects registered with the relevant State Registration Board

Technology Professionals:

Accredited Cyber Security Professionals with certifications such as CISM,  CISA, CISSP, or equivalent recognised qualifications.

Essential Service Professionals:

Some lenders may also offer LMI waivers or discounts for essential workers, including:

• Registered Teachers with valid state accreditation

• Police Officers with membership in a State Police Association

• Firefighters with membership in a State Firefighters Association

• Australian Defence Force personnel with valid ADF identification

How much deposit do I need if I qualify?

If eligible for an LMI waiver, some lenders may allow borrowing up to 90% of the property value without paying LMI.

The exact loan amount, deposit requirement and eligibility criteria vary depending on the lender and the borrower’s financial position.

Important to know

LMI waiver policies are lender specific and subject to change. Not all banks offer the same professions or borrowing limits, and additional criteria such as minimum income thresholds may apply.

A mortgage broker can help identify lenders that provide LMI waivers for your profession and structure the loan appropriately.