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Home Loans Brisbane
Make your property dream a reality with the best home loans in Brisbane.
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Savvy Editorial TeamFact checked
If you’re living in Brisbane and have determined that now is the time for you to buy a home and take up your position on the property ladder, then finding the right home loan will be an important step for you.
Here, we will look at how you can find the most suitable home loan in Brisbane to suit your needs and to make your goals of purchasing property a reality.
What should I look for when searching for a home loan in Brisbane?
There are a variety of details in a home loan that can make it more or less suited to your individual needs. Some of the details you should consider include:
Your LVR
This stands for ‘loan-to-value ratio’ and represents the total percentage of the purchase amount that you will borrow after accounting for your deposit. It is important to consider what LVR you are comfortable taking on, because a higher LVR can result in greater long-term interest payments and other fees associated with your loan.
Interest rates
This determines what percentage of the total loan amount outstanding you will need to repay per annum in addition to the principal (the difference between the value of your property and fees minus your deposit) of your loan. Interest rates can be either fixed, meaning they will remain the same for a set amount of time, or variable, meaning that you are happy to let rates fluctuate over time in exchange for certain benefits.
Loan structure
Mortgages can be structured in a great variety of ways. Aspects of your loan structure you will want to consider include the total span of your loan repayments, whether you can utilise an interest-only period at the beginning of your loan, or whether you would like a built-in offset account.
Comparison rates and fees
By taking note of a home loan’s comparison rate rather than only the interest rate by itself, you can gain an idea of what the true cost of repayments will be once fees are taken into account. For example, an interest rate of 2% might have a comparison rate of 2.5% after fees have been accounted for.
Who in Brisbane should be my first point of contact when considering exploring home loan options?
Online home loan comparison tools such as Savvy’s are excellent first stops in exploring your home loan options for buying your first home in Brisbane. These can easily return multiple options based on inputs unique to your situation and can provide quick alternative solutions as well, depending on the variables which you enter, such as your deposit amount, total property value, total home loan term and more.
This way you will be able to form a short-list of lenders which appear suitable for your needs with minimal effort. Once you have a clearer idea of the lenders you think is right for you, the rest of the process becomes much more manageable.
If you wish, you might also choose to consult a mortgage broker, many of whom can be found in the Brisbane area. These services are free of charge to the property buyer and can provide a different insight into what home loan options might work for you.
Your home loan options
Making your first big step towards buying a home? It's crucial to be across your mortgage options as a first homebuyer.
Opting for a variable interest rate on your home loan means it'll fluctuate as the market moves throughout your repayment term.
On the other hand, fixing your rate locks it in for a pre-defined period. This can bring with it greater certainty around your budget.
It's important not to set and forget when it comes to your home loan. If you find a more competitive offer, it may be worth refinancing.
If you're looking to build a new house, construction loans are specifically designed to cater to the different needs associated with doing so.
A guarantor essentially acts as a safety net for your lender, as they sign onto your loan to agree to pay it off should you become unable to do so.
Purchasing a property as an investment brings with it different specifications from a lender. It's crucial to know what your options are.
Businesses big or small may wish to purchase a property for commercial purposes, which are also different from a standard loan.
Your home loan may give you an interest-only option, which allows you to exclusively pay interest on your loan for a set period.
Just because your finances may be slightly more complicated as a self-employed individual doesn't mean you can't take out a home loan.
Some lenders may allow you to apply for a home loan with alternative documents, such as tax returns, BAS and ABN registration.
There are several options for purchasing a property without a cash deposit, such as equity in another property if you or your guarantor own one.
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The home loan process in Brisbane
Think about what kind of property you would like to purchase, what your budget might be, and what part of Brisbane you would like to buy in. For example, with the price of free-standing homes currently appreciating rapidly, you might find that for the purposes of your first home, a townhouse or apartment will suffice. Furthermore, depending on your needs and lifestyle, you may determine that living on the South or North sides of Brisbane are an absolute must for you. Another factor that might impact your decision making here is the first home buyers’ grant, which typically leads to buyers looking at Brisbane’s outer suburbs where new builds are more common.
You should also consider applying for pre approval from your preferred lender once you have established your budget. By obtaining pre approval, you can speed up the settlement process for any property you are interested in buying and streamline your acquisition.
With your budget and need parameters established, your search for the right home will become vastly more manageable. Online platforms can offer a useful means to examine Brisbane’s property market, but most people consider it necessary to inspect multiple prospective properties for purchase in person.
Brisbane is a fastly gentrifying city where in inner-city suburbs free-standing homes commonly sell for over $1 million. If living in or near the inner city is important to you for work or lifestyle reasons, then an apartment or townhouse will likely be your best option for a first home.
On Brisbane’s outskirts, in areas such as North Lakes and Forest Lakes, homes can be found at much more affordable prices.
The cost of stamp duty in Queensland varies depending on the price of the property being purchased, whether or not the buyer is a first time home buyer, and also what the intended use of the property is. For example, if a first time home buyer purchases a property under the price of $550,000 then no stamp duty will apply. However, if a home is purchased as an investment property, then stamp duty applies at rates increasing as the price of the property passes certain thresholds, much like marginal income tax rates.
In late 2020, the median house price in Brisbane was $577,644 after an increase of 4.4% over the year. The median price for an apartment during the same period was $377,349.
Assuming that a 10% deposit and loan principal equivalent to the median house price, a 1.89% interest rate, and a repayment period of 25 years (as is usual), then weekly repayments including interest and fees will be approximately $544.
For an apartment under the same conditions, weekly repayments will be $355.