⏱ Estimated reading time: 15 min read
Buying your first home is one of those milestones you’ve probably thought about for years. You might have spent months saving for a deposit, browsing property listings and trying to work out which suburbs fit your budget.
Then comes the finance.
How much can you borrow? Do you need a 20% deposit? Which bank should you choose? Could you qualify for government assistance? And how do you know whether you’re getting a suitable home loan?
These are questions many Australians face when buying their first property.
A mortgage broker can help you understand the lending process, compare suitable loan options and prepare for your application. But choosing the right broker is just as important as choosing the right home loan.
If you’re looking for a mortgage broker for first home buyers, here’s what to consider before making your decision.
What Does a Mortgage Broker Actually Do?
A mortgage broker acts as an intermediary between you and potential lenders.
Rather than approaching individual banks and comparing their products yourself, you can work with a broker who assesses your circumstances and researches suitable loans from their available lender panel.
A mortgage broker may help you:
- Understand how much you could potentially borrow
- Assess your deposit and savings position
- Compare home loan products and features
- Understand lender eligibility requirements
- Explore government assistance for first home buyers
- Prepare documents for pre-approval
- Submit and manage your home loan application
- Coordinate with your lender through to settlement
A mortgage broker does not approve your home loan. That decision rests with the lender.
The broker’s role is to help you understand your options, recommend suitable products and assist you through the process.
For first home buyers who have never applied for a mortgage, that guidance can be particularly useful.
Why First Home Buyers May Benefit From Using a Mortgage Broker
When you apply directly to a bank, you generally receive information about that bank’s lending products.
A mortgage broker can compare products from multiple lenders on their panel.
This can be helpful because lenders do not always assess borrowers in the same way.
One lender might have a different approach to casual employment income. Another might have specific requirements for self-employed applicants. Some may offer different loan features or have different policies for particular property types.
A broker can help identify these differences before you apply.
They can also explain terms you may be unfamiliar with, such as Lenders Mortgage Insurance, loan-to-value ratio, comparison rate and conditional approval.
However, using a broker does not automatically guarantee a lower interest rate or loan approval.
The value comes from receiving informed guidance, understanding your choices and having support throughout the application.
1. Look for Experience With First Home Buyers
Not every home loan application is the same.
Someone refinancing an existing property may have substantial equity and an established repayment history.
A first home buyer may be working with a smaller deposit, limited borrowing experience and uncertainty about the costs involved.
Look for a broker who regularly assists first home buyers and understands these challenges.
Ask how they approach situations involving:
- Deposits below 20%
- Casual or contract employment
- Multiple income sources
- Government grants and concessions
- Family guarantees
- Buying an apartment
- Purchasing a new home or building
- Applying for pre-approval before an auction
You should also feel comfortable asking basic questions.
A good broker will explain unfamiliar terms clearly and make sure you understand the implications of your decisions.
If you’re leaving a conversation feeling more confused than when you started, that may be a sign to explore other options.
2. Check Their Qualifications and Licensing
Mortgage brokers providing credit assistance in Australia must operate under the appropriate Australian credit licensing arrangements.
You can ask for the broker’s Australian Credit Licence details or the licence holder they represent.
ASIC maintains registers that can help you check licensing information.
A mortgage broker also has a legal obligation to act in your best interests when providing credit assistance.
This means they must prioritise your interests when recommending suitable credit products.
It does not mean every broker will recommend the same loan, but they should be able to explain their recommendations and the alternatives considered.
Before proceeding, ask:
- Who holds the Australian Credit Licence?
- What experience do you have arranging first home buyer loans?
- How do you assess which loan is suitable?
- What information will you provide about the products you recommend?
You should never feel pressured to sign documents you do not understand.
3. Find Out How Many Lenders They Can Access
A mortgage broker’s lender panel is important because it determines the range of products they can directly compare and arrange.
Some brokers work with a smaller group of lenders, while others have access to larger panels.
However, the number of lenders is not the only consideration.
A broker with access to many lenders still needs to understand which products are appropriate for your circumstances.
Ask which lenders are on their panel, whether they have access to participating lenders for relevant government schemes and whether any important lenders are outside their panel.
At NMC Finance, we work with a panel of more than 50 lenders, helping clients compare finance options based on their individual circumstances.
The aim is to identify a suitable loan, not simply present the largest possible list.
4. Make Sure They Understand Your Deposit Position
Many first home buyers assume they need a 20% deposit before they can purchase a property.
While a larger deposit can provide more lending options and may reduce borrowing costs, some buyers may be able to purchase with less.
Your options depend on your financial circumstances, the lender’s requirements and any government assistance for which you qualify.
For example, if you’re considering a $650,000 property:
| Deposit percentage | Deposit amount |
| 5% | $32,500 |
| 10% | $65,000 |
| 15% | $97,500 |
| 20% | $130,000 |
These figures show the deposit only. They do not include stamp duty, conveyancing, inspections, lender fees or other purchasing costs.
A broker should help you understand how much money you need in total, rather than focusing only on the deposit percentage.
They should also explain whether your savings meet the lender’s genuine savings requirements.
5. Ask About Low Deposit Loans and Government Assistance
Government assistance can make home ownership more accessible for eligible first home buyers.
Depending on your circumstances and location, you may be able to access the Australian Government 5% Deposit Scheme, a state-based First Home Owner Grant or stamp duty concessions.
Under the Australian Government 5% Deposit Scheme, eligible buyers may be able to purchase with a minimum 5% deposit without paying Lenders Mortgage Insurance.
The scheme has eligibility requirements, property price caps and participating lender arrangements.
Importantly, government scheme eligibility does not replace the lender’s normal assessment of your ability to repay the loan.
A mortgage broker should help you understand:
- Which schemes may apply to your situation
- Whether your preferred property meets the relevant requirements
- Which participating lenders are available
- How the scheme affects your deposit
- What additional savings you may still need
- Whether other assistance could apply
Government schemes change over time, so always confirm the current requirements before relying on a particular benefit.
6. Understand How Your Borrowing Capacity Is Calculated
Your borrowing capacity is the amount a lender may be willing to lend based on its assessment of your financial position.
Lenders generally consider factors such as your income, employment, living expenses, existing debts, credit history and dependants.
They also assess your ability to make repayments if interest rates increase.
For example, two buyers earning the same salary may have very different borrowing capacities if one has a car loan, several credit cards and higher living expenses.
A broker should review your actual financial position rather than giving you an estimate based only on income.
It’s also important to distinguish between the maximum amount you may be approved to borrow and the amount you would feel comfortable repaying.
Buying your first home should leave room for everyday expenses, maintenance, savings and unexpected costs.
7. Compare More Than the Interest Rate
Interest rates matter, but the lowest advertised rate is not necessarily the most suitable loan.
Home loans can differ in their fees, features and repayment flexibility.
When comparing options, ask your broker to explain:
Interest rate: The rate used to calculate interest on your loan.
Comparison rate: A rate designed to help compare the interest rate and certain fees on a standardised basis.
Offset account: An eligible linked account where the balance may reduce the amount of interest calculated on your home loan.
Redraw facility: A feature that may allow you to access eligible extra repayments, subject to the lender’s conditions.
Fixed interest rate: A rate that remains fixed for an agreed period, subject to the loan terms.
Variable interest rate: A rate that may change over the life of the loan.
Repayment flexibility: Whether you can make additional repayments or adjust payment arrangements.
Ask your broker to explain the trade-offs.
For example, a loan with an offset account may offer flexibility, but it could also have higher fees than a simpler product.
The right choice depends on how you expect to manage your money.
8. Ask How the Mortgage Broker Gets Paid
Many mortgage brokers receive commissions from lenders when a home loan settles.
Some brokers may also charge clients directly for particular services.
Before proceeding, ask for a clear explanation of any fees you may need to pay.
You should understand:
- Whether the broker charges an upfront fee
- Whether any fee is payable if the loan does not proceed
- How lender commissions work
- Whether the broker receives ongoing commissions
- Whether there are other costs associated with the recommended loan
A broker should also explain why a recommended product is suitable for your circumstances.
Transparency matters, particularly when you’re making a long-term financial commitment.
9. Look for a Broker Who Explains Pre-Approval Properly
Home loan pre-approval can help you understand your potential borrowing position before you make an offer.
It can also help you focus your property search on a realistic price range.
However, pre-approval is not the same as final loan approval.
Depending on the lender, pre-approval may be conditional on further checks, updated financial information, a satisfactory property valuation and other requirements.
Your broker should explain what the approval covers, how long it remains valid and what could cause it to change.
This is particularly important if you’re planning to bid at auction, where contracts are generally unconditional.
Never assume that pre-approval guarantees you can purchase any property within the approved amount.
10. Check How They Communicate
Buying your first home often involves several people, including your mortgage broker, lender, real estate agent, conveyancer and sometimes a building inspector.
Good communication helps keep everyone informed.
Ask who will manage your application and how frequently you can expect updates.
You should also know whom to contact if your circumstances change or a document is urgently required.
A responsive broker can help you understand what is happening during the application process, especially when settlement deadlines are approaching.
11. Consider Whether They Offer Support After Settlement
Your first home loan may suit you when you purchase your property, but your financial circumstances can change.
You might receive a salary increase, change jobs, start a family or decide to renovate.
Interest rates and lending products can also change.
Ask whether your broker offers ongoing loan reviews and how they approach future refinancing discussions.
Ongoing support can be useful, although refinancing should only be considered after weighing the potential benefits against fees, loan terms and other costs.
Mortgage Broker Versus Going Directly to a Bank
Both approaches are available to first home buyers.
| Consideration | Mortgage broker | Direct bank application |
| Lender options | Products from the broker’s lender panel | Products offered by that bank |
| Application support | Broker assists with preparation and lender communication | Bank staff assist with the bank’s process |
| Government schemes | Depends on participating lenders available | Depends on the bank’s participation |
| Product comparison | Multiple lenders may be compared | Generally limited to that bank |
| Fees | Broker fees and lender charges should be disclosed | Applicable bank fees and charges |
| Loan approval | Decided by the lender | Decided by the bank |
Neither approach is automatically better for every borrower.
What matters is understanding the options available and choosing an arrangement that suits your circumstances.
Common Mistakes First Home Buyers Make When Choosing a Broker
Choosing Solely on the Advertised Interest Rate
A low rate may look attractive, but you should also understand fees, features and eligibility conditions.
Not Asking About the Lender Panel
A broker can only arrange products through the lenders they have access to. Ask about the range of lenders considered.
Overlooking Upfront Purchasing Costs
Your deposit is only one part of the amount you’ll need. Allow for conveyancing, inspections, applicable stamp duty and other expenses.
Applying for Multiple Loans Without a Clear Strategy
Multiple credit applications can create unnecessary credit enquiries. Discuss your application approach with your broker before proceeding.
Assuming Government Assistance Is Guaranteed
Grants, concessions and deposit schemes have eligibility requirements. Check these before committing to a property.
Not Reviewing Your Budget
A lender’s maximum approval amount may be higher than the amount you feel comfortable borrowing.
Waiting Until You’ve Found a Property
Speaking with a broker early can help you understand your options before making an offer.
A Practical Example: Comparing Two First Home Buyer Situations
Consider two buyers looking at properties around $700,000.
Buyer A has a stable salary, a 20% deposit and no existing debts.
Buyer B has a 5% deposit, earns a base salary plus overtime and is exploring government assistance.
Both buyers are purchasing their first home, but their lending options may differ.
Buyer A may have a wider range of standard lending options because of the larger deposit.
Buyer B may need a lender that accepts the relevant overtime income and participates in a suitable low deposit scheme.
A mortgage broker should assess each buyer individually rather than recommending the same product to both.
This is why experience with first home buyers matters.
How to Prepare for Your First Mortgage Broker Appointment
You don’t need to know everything about home loans before speaking with a broker.
However, having some basic information ready can make the conversation more productive.
Consider preparing:
- Recent payslips or income evidence
- Employment details
- Savings account statements
- Information about existing loans and credit cards
- An estimate of your regular living expenses
- Details of your deposit
- Your preferred property location and budget
- Any questions about government assistance
Self-employed borrowers may need additional business and tax documents.
Your broker can explain exactly what is required based on your situation.
Questions to Ask Before Choosing Your Mortgage Broker
Use this checklist during your first conversation.
- How often do you work with first home buyers?
- Which lenders can you compare?
- Are there lenders outside your panel I should know about?
- How will you assess my borrowing capacity?
- What deposit will I need?
- Could I qualify for government assistance?
- What are the total upfront costs of buying?
- Which loan features would suit my circumstances?
- How do you get paid?
- Can you help me obtain pre-approval?
- Who will manage my application?
- Will you help me after settlement?
A broker should be willing to answer these questions clearly.
Choosing a Mortgage Broker in Your City
While many lending requirements apply nationally, government assistance and property considerations vary between states.
If you’re buying in a major Australian city, our local guides explain the issues worth discussing with your broker.
- Mortgage Broker for First Home Buyers in Melbourne
- Mortgage Broker for First Home Buyers in Sydney
- Mortgage Broker for First Home Buyers in Brisbane
- Mortgage Broker for First Home Buyers in Adelaide
Frequently Asked Questions
Is a mortgage broker worth using for a first home?
A mortgage broker can help you compare suitable home loans, understand lender requirements and manage the application process. Whether using one is worthwhile depends on your needs and the service provided.
Do mortgage brokers charge first home buyers?
Many brokers are paid commissions by lenders, but some charge client fees. Ask for a full explanation of costs before proceeding.
Can a mortgage broker help with a small deposit?
Yes. A broker can help you explore lenders and government schemes that may be available to eligible borrowers with smaller deposits.
Can a mortgage broker guarantee approval?
No. Loan approval is always subject to the lender’s assessment and applicable conditions.
Should I speak to more than one mortgage broker?
You can speak with more than one broker before deciding. Compare their experience, communication, lender access and recommendations.
Can a broker help if I’m self-employed?
Yes. Brokers can help identify lenders whose policies may suit self-employed borrowers, although income evidence and other requirements still apply.
How long does mortgage pre-approval take?
Timeframes vary depending on the lender, application complexity and completeness of the documentation. Your broker can provide an estimate for your circumstances.
Can I use a mortgage broker when buying at auction?
Yes. It is sensible to discuss finance and pre-approval before bidding, although pre-approval does not guarantee final loan approval.
Can a mortgage broker help me refinance later?
Yes. Many brokers also assist existing homeowners with loan reviews and refinancing.
When should I contact a mortgage broker?
Ideally, before you begin seriously searching for properties. Early advice can help you establish your budget and understand your deposit requirements.
Speak to NMC Finance About Your First Home
At NMC Finance, we understand that buying your first home can raise plenty of questions.
Our team helps first home buyers understand their borrowing position, compare suitable lending options and prepare for the home loan process.
We take the time to understand your income, savings, goals and circumstances before exploring potential loan options.
Whether you’re just starting to save or getting ready to purchase, we’re here to help you make informed decisions.
Explore First Home Buyer Loans and Speak to NMC Finance
This article provides general information only and does not take into account your individual financial circumstances. Government assistance, lending policies and loan eligibility are subject to applicable conditions.
