The ten ideas, written out
What's LVR?
LVR is your loan-to-value ratio: how much you're borrowing compared with what the property is worth. Borrow 80 of every 100 the property is worth and your LVR is 80%. Past 80%, most lenders add lenders mortgage insurance, and a lower LVR can often get you a sharper rate. The value is the lender's valuation, which can come in under the price you're paying, and that pushes your LVR up.
What's LMI?
Lenders mortgage insurance usually applies when you borrow more than 80% of the property's value. It protects the lender if the loan goes bad, not you, but you pay for it, and it's often added to the loan rather than paid in cash. Some lenders waive it for certain professions, and eligible buyers using the 5% Deposit Scheme don't pay it. Paying LMI can get you into a home sooner than saving a full 20% deposit, so it's a cost to weigh, not a dead end. The LMI waivers guide lists the professions that can qualify.
What's servicing?
Servicing is whether your income can carry the loan. The bank takes your income, subtracts your living costs and your other debts, and looks at what's left. It checks the repayments at a higher rate than you'll actually pay, and it counts credit card limits even when the balance is zero. Every lender counts these a little differently, so the most one bank will lend can differ from the next, and the most a bank will lend isn't always the number that's comfortable for you.
Cash to complete
The cash you need is more than the deposit. Stamp duty, legal fees, inspections and lender fees sit on top, and together they make your cash to complete: the gap between what the bank lends and the full cost of buying. It's worth keeping a buffer for moving costs and surprises too, and knowing the number before you make an offer. The Cost to Complete calculator works it out for a price you're looking at.
Stamp duty
Stamp duty is a state or territory tax on buying property. Most buyers pay it at settlement, though the deadline and how it's worked out vary by state. The rate generally steps up as the price climbs. First home buyers can get a concession or an exemption below a price threshold, and crossing that threshold can mean the discount drops away quickly. Each state and territory sets its own rules, so it's worth checking the thresholds before you settle on a price range. The grants and schemes guide covers each state.
The 5% Deposit Scheme
The Australian Government's 5% Deposit Scheme, which grew out of the First Home Guarantee, lets eligible buyers purchase with a deposit from 5% without paying LMI, because the government guarantees the gap up to 20%. Under the Family Home Guarantee, eligible single parents and single legal guardians can buy with a deposit from 2%. Property price caps, eligibility rules and the lender's own assessment still apply. A smaller deposit means a bigger loan, so you still need the income to service it. The first home buyer walkthrough goes through it step by step.
Help to Buy
Help to Buy is the government's shared equity scheme. The government buys a share of the home with you: up to 30% of an existing home, or up to 40% of a new one. You need at least a 2% deposit and you service a smaller loan. You can buy back the government's share later, at its value at the time. Income caps, property price caps and other eligibility rules apply. The Help to Buy calculator checks the caps and shows what it could mean for you.
Pre-approval
Pre-approval is a lender's conditional yes before you've found the property. I think of it in three steps: a rough estimate of what you could borrow, then your documents properly assessed, then the formal pre-approval. Not every pre-approval gets that full assessment, so it's worth asking whether yours has. Even then it isn't a guarantee: the property still has to be approved, usually through a valuation, and your details are checked again before the loan goes unconditional. It lets you shop with confidence, not certainty.
Offset accounts
An offset account is a transaction account linked to your home loan. Its balance is taken off the loan when interest is worked out, so with a full offset, a loan of 100 and 20 in the offset means you pay interest on 80. Most offsets work that way, but some only offset part of the balance. The money stays yours and you can use it any time. Offsets usually come with variable loans, and some packages charge a fee, so it's worth checking the offset pays its way.
Fixed or variable?
A variable rate can move up or down over the life of the loan. It often follows the market, but the lender sets it. A fixed rate locks your rate for a set time, which buys certainty, but fixed loans usually limit extra repayments and can charge break costs if you leave early. If you can't choose, you can split the loan so part is fixed and part is variable. It comes down to certainty against flexibility, and choosing what lets you sleep at night.