Mortgages & Home Loans Australia — Guides and Calculators
This article provides general information only and does not constitute financial advice. For advice tailored to your situation, consult a licensed financial adviser. Learn more.
Contents
Buying a home in Australia is one of the largest financial decisions most people will make. This section covers everything from understanding home loan types and comparing lenders, to stamp duty calculators, first home buyer schemes, lenders mortgage insurance, and refinancing strategies.
Whether you are buying your first home, upgrading, investing in property, or looking to refinance to a lower rate, these guides cover the Australian-specific rules, government schemes, and financial frameworks you need.
Australian Mortgage Basics
A mortgage (or home loan) is a loan secured against a property. In Australia, home loans are regulated by APRA (prudential regulation) and ASIC (consumer protection). Most Australian home loans are variable rate, fixed rate, or a split between the two.
Key Australian mortgage features:
- Variable rate: interest rate moves with the RBA cash rate and lender decisions; typical rate as of 2026: 5.5–7.0% p.a. depending on loan-to-value ratio (LVR) and lender
- Fixed rate: locked for a term (1–5 years); provides repayment certainty; break costs apply if repaid early
- Offset account: a linked savings account where balances reduce the mortgage principal for interest calculation purposes — a powerful strategy for reducing interest
- Redraw facility: allows you to withdraw extra repayments made; less flexible than an offset account
Stamp Duty in Australia
Stamp duty (also known as transfer duty) is a state government tax payable when purchasing property. It varies significantly by state and territory.
Approximate stamp duty on a $700,000 property (no concessions):
| State/Territory | Approximate stamp duty |
|---|---|
| NSW | ~$26,000 |
| VIC | ~$37,000 |
| QLD | ~$12,000 |
| WA | ~$23,000 |
| SA | ~$34,000 |
| TAS | ~$25,000 |
| ACT | ~$26,000 |
| NT | ~$35,000 |
Note: Rates and thresholds change — check your state revenue office for current figures.
First home buyer concessions: Most states offer stamp duty exemptions or concessions for first home buyers under specified price thresholds.
First Home Buyer Schemes
The Australian government and state governments offer several schemes to help first home buyers enter the market:
| Scheme | What it does |
|---|---|
| First Home Guarantee | Buy with 5% deposit, no LMI (income and price caps apply) |
| Regional First Home Buyer Guarantee | 5% deposit for regional buyers |
| First Home Owner Grant (FHOG) | State-based cash grant for eligible first home buyers of new or substantially renovated homes |
| First Home Super Saver Scheme (FHSS) | Save extra super contributions and withdraw for a first home deposit (up to $50,000) |
| Help to Buy (proposed) | Shared equity scheme — government co-purchases up to 40% of home |
Details, eligibility, income caps, and property price caps vary by scheme and state. Check the Housing Australia website for current First Home Guarantee details and your state revenue office for FHOG.
Lenders Mortgage Insurance (LMI)
If your deposit is less than 20% of the property value, most lenders require you to pay lenders mortgage insurance (LMI). LMI protects the lender (not you) if you default on the loan.
LMI costs for a $600,000 property:
| Deposit | LVR | Approximate LMI |
|---|---|---|
| $30,000 (5%) | 95% | $18,000–$25,000 |
| $60,000 (10%) | 90% | $9,000–$13,000 |
| $90,000 (15%) | 85% | $3,000–$6,000 |
| $120,000 (20%) | 80% | $0 |
LMI is typically added to the loan amount (capitalised), meaning you pay interest on it for the life of the loan.
How Much Can I Borrow?
Australian banks use debt-to-income (DTI) ratios and serviceability tests to determine borrowing capacity. The standard serviceability buffer (set by APRA) requires lenders to test whether you can afford repayments at 3% above the current rate.
Key factors affecting borrowing capacity:
- Gross income (individual and joint)
- Existing debts (car loans, credit cards, HECS-HELP)
- Number of dependants
- Living expenses
- Proposed deposit size and LVR
Use the MoneySmart mortgage calculator to estimate repayments.
Refinancing Your Mortgage
Refinancing — switching to a new lender or loan product — can reduce your interest rate and total loan cost. The Australian mortgage market is competitive; many homeowners save $3,000–$10,000+ per year by switching from a loyalty rate to a competitive market rate.
When refinancing makes sense:
- Your current rate is significantly above market rates (check comparison sites — Canstar, RateCity)
- You have built equity above 20% (LVR <80%) and can now avoid LMI
- Your financial situation has improved since the original loan
Costs of refinancing: discharge fee ($150–$400), application fee on new loan, legal/settlement fees. Break costs apply if exiting a fixed rate loan during the fixed period.
Key Mortgage Topics
- Australian Mortgage Calculator
- Stamp Duty Calculator
- First Home Buyer Guide
- How Much Can I Borrow?
- Lenders Mortgage Insurance Explained
- Negative Gearing Explained
- Refinancing Your Mortgage
For advice tailored to your situation, speak with a licensed mortgage broker or financial adviser. You can find a licensed mortgage broker through the Mortgage and Finance Association of Australia (MFAA) or ASIC’s MoneySmart.