There’s a lot to think about when buying your first home—saving for a deposit, deciding on the right suburb, and understanding loan types. But one decision that often gets overlooked is choosing the right lender. It’s easy to assume all banks and lenders are the same, but the truth is, who you borrow from can have a lasting impact on your financial journey.
If you’re first-time home buyer, here’s what you should know before signing on the dotted line.
Understand What You’re Really Paying For
Most people focus on the interest rate—and while that’s definitely important, it’s not the only thing that matters. Lenders often have different fee structures, from upfront application fees to ongoing account keeping fees. Some also charge for making extra repayments or closing your loan early.
Looking beyond the advertised rate and comparing the comparison rate (which includes most fees and charges) will give you a more realistic picture of what the loan will cost over time.
Look at Flexibility and Features
As a first-time buyer, it might be tempting to go with the simplest loan. But features like redraw facilities, offset accounts, or the ability to split your loan between fixed and variable interest can offer real long-term value.
The right lender will offer features that align with your financial goals. If you’re planning to make extra repayments or want flexibility to refinance later, choosing a loan that supports that from day one is a smart move.
Consider Customer Service and Support
Buying a home can be stressful, and having a lender who picks up the phone, explains things clearly, and follows through on their promises makes a big difference. Some of the big banks have strong reputations but may offer a more impersonal experience. Smaller lenders and credit unions, on the other hand, often provide more personalised support but may have more limited products.
Reading reviews or asking others about their experience can give you some insight into how each lender treats their customers—something that won’t show up on a rate comparison website.
Don’t Just Look at Banks
There’s a wide range of lenders in Australia, from the Big Four banks to second-tier lenders, online-only lenders, credit unions, and building societies. Each type comes with its own pros and cons.
Non-bank lenders, for example, may be more flexible with lending criteria or offer lower rates for certain borrowers. On the flip side, they may not have branches or face-to-face service, which matters to some buyers.
First-time buyers often assume they’ll be limited in their options, especially if their deposit is small, but that’s not always the case. The trick is knowing where to look—or working with someone who does.
Why Loan Approval Criteria Matter
Not all lenders assess your application the same way. Some are more conservative when it comes to income from casual work or bonuses. Others might be more lenient with credit history or debt-to-income ratios.
This is where a mortgage broker Sydney can really help. Brokers understand the approval criteria across a range of lenders and can match you with one more likely to say yes based on your specific circumstances. That means fewer credit checks, faster approval, and a higher chance of getting the loan terms you want.
Government Incentives and Lender Participation
Some lenders work closely with government schemes like the First Home Guarantee or shared equity programs. If you’re planning to use one of these, you’ll need to choose a lender that participates. Not all do, so it’s worth checking early on or asking your broker for a list of eligible lenders.
Missing out on a grant or support program because of your lender choice can mean losing thousands of dollars in assistance—or needing to save a bigger deposit.
Compare Responsibly—Not Just on Price
There are dozens of loan comparison sites out there, and while they can be useful, they’re not always comprehensive. Some only show lenders who pay to be listed, while others exclude smaller or niche lenders altogether.
Use them as a starting point, but be cautious about basing your decision purely on interest rate. Look at the full loan product, including terms, service, flexibility, and your long-term plans.
Trust Your Instincts (and Ask Questions)
Choosing a lender isn’t just about ticking boxes. It’s about trusting that your lender has your back as you enter one of the biggest financial commitments of your life. If a deal seems too good to be true or you feel pressured, it’s okay to walk away.
Ask questions. Request clear explanations. If a lender or broker can’t provide simple, honest answers, they might not be the right fit for you.
Final Thoughts
The right lender for your first home loan isn’t necessarily the one with the lowest rate on a billboard. It’s the one that offers fair terms, suits your financial goals, and supports you through the process.
Take your time, do your homework, and don’t be afraid to get expert help. Speaking with a qualified mortgage broker sydney can take a lot of the guesswork out of the process, especially when you’re still learning the ropes.
After all, choosing the right lender isn’t just about buying a home—it’s about building a solid financial foundation for the years ahead.