Trying to wrap your head around deposits, interest rates and loan options for the first time? It’s easy to feel stuck before you’ve even begun. But in 2025, getting into the market is more doable than it feels if you’ve got the right facts on your side.
Let’s bust the biggest myths holding first-home buyers back and reveal the truths that could get you moving sooner than you think.
Myth #1: You need a 20% deposit to get a home loan.
Many first-home buyers assume they need to save a 20% deposit before considering buying. Sure, a bigger deposit can help you avoid extra costs like lenders' mortgage insurance (LMI). But here's the truth: it's not a hard rule. Many Aussies are getting into their first home with as little as 5%.
The truth? A 20% deposit is helpful, but not essential. If you have 20% saved, that's great. It can reduce your repayments and give you more negotiating power. But waiting for that perfect number can also keep you out of the market longer, especially when property prices shift.
If you're paying rent at the same time, it can feel like you're going nowhere fast.
First-home buyers also have the 5% deposit option or the First Home Guarantee. The government's First Home Guarantee (part of the broader Home Guarantee Scheme) is helping eligible buyers purchase a home with just a 5% deposit and skip LMI entirely.
That's because the government is the guarantor for the other 15%. That can mean getting in sooner and potentially saving tens of thousands. The number of spots is limited but an Aussie Broker can help you determine eligibility and guide you through the application.
Not eligible for the First Home Guarantee? Don't stress. Some lenders offer:
Loans with deposits as low as 5–10%.
LMI waivers for certain jobs (like teachers, nurses and other key workers).
Tiered discounts on LMI depending on your deposit and risk profile.
Every lender is different, and having an expert on your side helps. At Aussie, we have access to over 25+ lenders, many of which offer smart low-deposit options.
Buying your first home is still within reach even if your deposit isn't 20%. The key is knowing what options are out there and having someone in your corner to help you make the most of them.
You might also be interested in: How do rent to buy schemes work?
Myth #2: A bad credit score means you'll be rejected.
If you've missed a few bills or haven't had credit for long, it's easy to assume you'll be ruled out. But here's the truth: your credit score is only one part of the picture. Your credit score gives lenders a snapshot of how you've handled money. But most don't stop there. They also consider:
Your income and job security: Are you earning steadily? Is your employment stable?
Your savings habits: Even small, regular savings show discipline and responsibility.
Your expenses and debts: Lenders want to know you can manage your repayments.
Remember, your application isn't just numbers; it's a combination of who you are, what you earn, and where you're going.
In short? A single number won't decide your future.
Yes, some lenders are also more flexible than others. Not all lenders treat credit history the same way. Some are more open to applicants who've had setbacks, especially if you can show you're back on track. Some lenders specialise in supporting buyers with non-perfect credit, and others weigh up your current position more than your past.
You can improve your score. If your score isn't where you'd like it to be, don't stress. You can take simple steps to build it up, including:
Tidying up credit card debts
Avoiding too many credit applications in a short time
Paying bills on time
Staying away from pay-later programs
Keeping an eye on your credit report.
Wondering how much you could borrow for a home loan? Use our free calculator to find out.
Myth #3: You should stick with “your” bank for a loan.
It’s what many people do first, and we get why. Your bank feels familiar. You’ve probably been with them since high school. It feels easier to start there. But here’s the thing: banks can only offer their loans. It's not necessarily the one that suits you best. And when every dollar counts (especially in today’s market), having more choices can mean more savings.
Now, lender policies are changing fast. Some banks are stricter than others, especially if you’re self-employed, have a smaller deposit, or took time off work. But just because one bank says no doesn’t mean they all will. Knowing where to apply (and where to avoid wasting time) can be the difference between getting stuck and moving forward.
That’s where brokers are different. Aussie Brokers are here to help you make a confident decision with someone in your corner, from your first question to the final settlement. We compare loans from over 25+ lenders, including the big and non-bank lenders, to find one that fits your situation.
We’ll explain your options clearly, handle the paperwork, and support you through every step.
Myth #4: You can't buy a home without help from your family.
There's this idea floating around that if your parents can't chip in, you're locked out of homeownership. And while family help can make things easier, it's not the only way in. More and more first-home buyers are getting on the property ladder without financial help from family, with no inheritance, guarantee, or handout, just good planning and the right support.
Government support is changing the game. If you've ruled yourself out because you don't have someone to gift you a deposit, it's worth checking what's already available to first-home buyers. You might be eligible for:
First Home Owner Grant (FHOG): A one-off payment for new builds.
Stamp duty concessions: Many states offer reduced or even waived stamp duty.
First Home Guarantee: Buy with a 5% deposit, no LMI, and no family guarantee required.
These schemes are designed to support everyday Aussies, not just high-income earners or those with cash from parents.
Guarantor loans are also changing the game. If someone close to you does want to help, it doesn't have to mean handing over money. A guarantor loan lets someone (usually a parent, but not always) use the equity in their property as extra security for yours.
Here's what you should consider:
No cash changes hands; it's about offering backing, not a bank transfer.
It could help you avoid Lenders Mortgage Insurance (LMI).
Once you've built enough equity, the guarantor can usually be released.
It's not for everyone, but for those with this option, it can fast-track a purchase without needing a 20% deposit. Deposit bonds are also helpful when your savings need a little time. Not quite ready with the deposit, but your income is solid? A deposit bond might help you secure a property now while you finish saving. Here's how it works:
It acts as a guarantee to the seller that your deposit will be paid at settlement.
You don't have to hand over your deposit upfront.
It's especially useful for off-the-plan or long-settlement purchases.
However, not all lenders accept them, but an Aussie Broker can tell you if it fits your situation.
The bottom line? Family help is helpful but not essential. You don't need a safety net to start climbing. Buying a home without family support is possible, and it happens every day.
Myth #5: Paying rent is cheaper than paying off a mortgage.
It might seem cheaper week to week, but what about the big picture?
Taking on a mortgage can feel overwhelming if you're already shelling out $500 or $600 a week in rent. Depending on where you live, rent might look cheaper on paper. But the real question isn't just what's cheaper today; it's where that money takes you.
When you rent, you're paying for the roof over your head, and that's it. It doesn't build ownership. It doesn't create equity. It just disappears each month. However, with a mortgage, every repayment helps you own more of your home. You're building something that's yours and can grow in value.
Here’s an example. Rent is $600/week (or approximately $2,600/month) and mortgage on a $550K house with 5.5% interest rate over 30 years is approximately $3,125/month. The gap isn't huge. With a 5% deposit, you could own that property.
Also, in some areas, buying is already cheaper than renting. In many regional areas and emerging suburbs, repayments on a modest home already match or beat average rents. Add government support like low-deposit home loans, stamp duty exemptions, or the First Home Guarantee scheme (no LMI with 5% deposit), and buying might be closer than you think.
Love your current lifestyle but can't afford to buy in your postcode? How about rentvesting?
Through it, you can buy an affordable investment in a growth suburb, keep renting in a location that suits your work or lifestyle, and use the rental income to help cover your loan repayments. It's a smart way to step onto the property ladder without stepping away from the life you've built.
Renting might be familiar but owning builds freedom. You don't need to give up your lifestyle, brunches, or flexibility to own a home. But it's worth asking: What could your rent be doing for you if it went toward something you own?
Myth #6: All home loans are the same.
Think all home loans are created equal? Think again. On the surface, it might seem like a loan is a loan. You borrow the money, you pay it back; job done. But scratch the surface, and you'll find big differences in rates, features, flexibility, and costs. For first-home buyers, choosing the wrong loan can quietly cost you thousands over time.
Sure, the interest rate matters. But so do the structure and features behind it. Remember, what works for your friend, your parents, or your bank's default product might not work for you. Let's break it down.
Your repayments stay the same for a set period (usually 1–5 years). | Your rate can move up or down with the market. | A combination of both: stability on one side, flexibility on the other. |
This is good if you want stability and easy budgeting. | You'll often get more flexible features and benefit when rates drop. | Repayments are also a mix of fixed and variable. |
Remember, a low rate isn't always the best rate. It's about how the loan fits into your life.
Loan features aren't just 'nice to have' extras; the right ones can help you save money, pay off your loan sooner, or give you breathing room when life changes.
An offset account reduces the interest charged on your loan using your savings.
The redraw facility allows you to access any extra repayments you've made.
Flexible repayment options match your repayments to your pay cycle.
Loan portability takes your loan with you if you move.
Some lenders include these, while others charge for them. An Aussie Broker can help you compare what you're getting, not just what sounds good on paper.
Your home loan repayment types don’t also have to follow a one-size-fits-all path.
Principal and interest | |
|---|---|
You pay down the loan and interest together. | You cover the interest for a set period (common for investors or short-term goals). |
This builds equity faster. | This lowers repayments upfront but higher long-term costs. |
The right home loan keeps working in the background for years. Get it right at the start, and you're setting yourself up for more flexibility, smarter savings, and fewer headaches.
Myth #7: Getting pre-approved means you're guaranteed a home loan.
That triumphant feeling when you get pre-approved? It's valid. You should feel confident enough to start house-hunting. But here's the catch: pre-approval isn't the same as final approval. It's more like a strong head start, not the finish line. So, what does pre-approval mean?
Also called conditional approval, pre-approval means a lender has examined your financial situation, including your income, savings, debts, and expenses. If nothing changes and your chosen property meets its criteria, it will likely approve your loan.
It's your green light to get serious with inspections and offers with more confidence. But the final thumbs-up only comes once the lender has all the details and gives your chosen property the all-clear. Unfortunately, a few things can change the outcome, even if you're pre-approved.
The property doesn't stack up. Some homes won't pass a lender's criteria, especially if they're in poor condition, in high-risk areas like flood zones, or are valued below the sale price.
Your financial situation changes. Switched jobs? Took out a new loan or missed a payment? Lenders will reassess your risk if anything material changes before settlement.
Your pre-approval expires. Most are only valid for 60 to 90 days. If you're still looking after that, the lender may need updated documents before continuing.
Pre-approval is important, but it's just one step to full approval.
So, how can Aussie Brokers help you stay on track? They know pre-approval can feel like a green light, and they'll help ensure it stays that way. Your Aussie Broker can:
Explain exactly what your pre-approval covers (and what it doesn't).
Flag any properties that might raise issues with the lender.
Help you stay financially steady between now and settlement.
Manage the paperwork and timelines so there are no last-minute surprises.
If something changes? They're already in your corner with a plan B.
Pre-approval is the start of the plan, not the end. It's a huge step and one worth celebrating. But don't stop there. With the right support, you can move from pre-approval to picking up the keys.
Myth #8: You should always choose the home loan with the lowest interest rate.
A low rate might catch your eye, but it doesn't tell the whole story. When comparing home loans, interest rates are usually front and centre. Sure, a lower rate should mean lower repayments. But in practice? That headline number can be misleading.
Because when it comes to home loans, the cheapest rate isn't always the smartest deal. That rate you saw online might look appealing until you read the fine print. It could come with:
Ongoing account or package fees that add up fast.
Higher revert rates after a short honeymoon period.
Exit or break costs if you want to refinance later.
No offset account or redraw options, which can limit flexibility.
Sometimes, the rate is low because the loan lacks features that matter to you.
Your first loan might also not be your last, and life rarely stays the same for 30 years. You might want to make extra repayments after a pay rise, redraw funds for unexpected expenses, offset your savings to reduce interest, or refinance to a sharper deal. If your "cheapest" loan locks you into rigid terms, you could miss out on thousands in long-term savings or flexibility.
Also, those eye-catching rates are often fixed, which is great for certainty, but you may not be able to pay extra, you could face fees if you exit early, or you won't benefit if rates drop.
On the contrary, variable rates usually offer more flexibility, and a split loan could give you both security and control. The right structure depends on your income, plans, and comfort with change.
A home loan is one of the biggest financial commitments you'll ever make. And while a sharp rate is nice, the real win is getting a loan that works for your life now and in the future.
Myth #9: Government schemes are too hard to access.
Let's clear this one up. Many first-home buyers assume government support is too confusing or unsuitable. But in reality, these schemes exist to make buying more achievable, especially if you're not sitting on a 20% deposit or a six-figure salary.
Here's what's available and how Aussie can help you use it.
Firstly, the First Home Owner Grant (FHOG)—a cash grant from your state government to help with the cost of buying or building your first home, usually for brand-new homes.
To qualify, you must be an Australian citizen or permanent resident, it must be your first time owning property in Australia, and you must live in the home, not rent it out. Depending on your state, this could mean $10,000 or more in your pocket.
The funds can go directly toward your deposit or settlement costs.
Next, there is the First Home Guarantee (FHG). This federal scheme helps eligible buyers purchase a home with as little as a 5% deposit without paying lenders' mortgage insurance (LMI), meaning you could save $10,000–$30,000 in LMI.
However, you need to be a first-home buyer (or not owned in the last 10 years), your income must be under $125K (for single applicants) or $200K (for couples), and the home needs to be under your area’s price cap. Spots are limited, but Aussie can check your eligibility and apply on your behalf.
Lastly, you can apply for stamp duty concessions. Stamp duty is one of the biggest upfront expenses when buying, but most states offer discounts or exemptions for first-home buyers.
In NSW: Pay no stamp duty on homes under $800,000.
In VIC: Full exemption under $600,000.
Other states offer their versions based on location and value.
These savings can help fast-track your deposit and reduce your overall loan size.
Too many buyers assume these schemes are inaccessible or miss out on thousands in support because no one told them what's available. At Aussie, we're here to make the process simpler. We'll help you get every dollar of help you're entitled to so you can move in sooner, with less stress.
Myth #10: Once you've got a home loan, you're locked in.
Many first-home buyers think their loan is a lifelong lock-in; once it's done, that's it for the next 30 years. But here's the truth: your home loan should move with you, not hold you back.
Life changes. Rates shift. Goals evolve. And the good news? Your loan can, too.
It's easy to leave your loan untouched once it's in place. But doing nothing for years might mean paying thousands more in interest than you need to, missing out on better features or sharper rates, and not using the equity you've already built.
So, how can you score a better deal? Enter refinancing. But that's just one part of the story. When you refinance, you can lower your repayments, tap into your equity for renos, investing, or major life moves, add smart features like an offset or redraw, consolidate debts, and simplify your finances.
It's not just about saving; it's about making your loan work harder for your future.
So, when should you check in on your loan? Here are some good signs it's time for a review:
You've had your loan for over 2 years.
Rates have dropped since you signed up.
Your income, expenses, or goals have changed.
You're curious about what your equity could unlock.
You're just not sure your current loan stacks up anymore.
The takeaway? Your home loan should move with you, not hold you back. Whether you're a couple of years in or a decade down the track, it's never too late to check if you could be in a better spot.
Final word: You might be closer than you think.
If you've ever felt like homeownership isn't in the cards for you, you're not alone. In 2025, there are more paths to buying your first home than ever.
It's not about ticking old-school boxes; it's about finding a way that works for you, whether that's buying with just a 5% deposit, tapping into government schemes, exploring alternative paths like rentvesting or co-buying, or finding a loan that fits your life and goals.
The door's not closed; you just need the right key.
At Aussie, we help make the myths disappear. We're not here to sell you a dream; we're here to help you make a plan. When you sit down with an Aussie Broker, you'll get:
A personal look at what's possible based on your real situation.
Clear guidance through lenders, schemes, and strategy.
Ongoing support, from pre-approval to the moment you get the keys.
Let's bust the biggest myth: that homeownership isn't for you.
