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First home buyers could benefit from a home loan package

First home buyers could benefit from a home loan package

September 7, 2010

If you are a first home buyer, considering one of the major lenders through to the smaller brands is one of the toughest choices you will make when choosing a home loan. So why do so many Australians shop with one of the major banks, namely ANZ, Commonwealth Bank, NAB and Westpac?

According to data from the Australian Prudential Regulation Authority (APRA), in July the major four banks (Westpac, Commonwealth Bank, ANZ and NAB) had 83 percent of the market share of loans for owner-occupied properties.

Westpac was reported to have the largest portion of the home loan market at around 27 percent, followed by Commonwealth Bank with 25 percent.

Bundle it together in a package deal
One reason why the major four banks hold such a large percentage of the home loan market is because they are able to offer package deals. Due to their sheer size, they are able to combine a range of different products into the one package at a discount rate. Some smaller financial institutions are unable to do this because they only offer one or two products, such as home loans or savings account, so they may not have the facilities or the ability to offer package deals.

Package deals can be handy especially for first home buyers who may be entering the market this mortgage season. For a discounted rate, package deals combine a number of different products such as a home loan, credit card and transaction accounts into the one package with the one financial institution.

Some lenders may offer up to 0.7 percent discount on your home loan interest rate alone. Some may also offer discounted interest rates on your credit card, reduced account fees, higher interest rates on your transaction account as well as discounts on other products such as home and contents insurance.

While some package deals can be good, there could be other home loans on the market they may offer a lower rate, so if you are a first home buyer who is looking at entering the property market this mortgage season, compare home loans online. Don’t forget to crunch numbers, remember to look at the fees included, and work out if you will save more with a package deal or with a regular home loan.

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Learn more about home loans

How do I apply for Westpac’s first home buyer loan?

If you’re a first home buyer looking to apply for a home loan with Westpac, they offer an online home loan application. They suggest the application can be completed in about 20 minutes. Based on the information you provide, Westpac will advise you the amount you can borrow and the costs associated with any possible home loan. 

You can use Westpac’s online mortgage calculators to estimate your borrowing power. You can also work out the time it might take to save up for the deposit, and the size of your home loan repayments

When applying for a home loan with Westpac, you’re assigned a home finance manager who can address your concerns and provide information. The manager will also offer guidance on any government grants you may be eligible for. 

Can first home buyers apply for an ING home loan?

First home buyers can apply for an ING home loan, but first, they need to select the most suitable home loan product and calculate the initial deposit on their home loan. 

First-time buyers can also use ING’s online tool to estimate the amount they can borrow. ING offers home loan applicants a free property report to look up property value estimates. 

First home loan applicants struggling to understand the terms used may consider looking up ING’s first home buyer guide. Once the home buyer is ready to apply for the loan, they can complete an online application or call ING at 1800 100 258 during regular business hours.

How can I apply for a first home buyers loan with Commonwealth Bank?

Getting a home loan requires planning and research. If you are considering a home loan with the Commonwealth Bank, you can find the information you need in the buying your first home section of the bank’s website.

You can see the steps you should take before applying for the loan and use the calculators to work out how much you can borrow, what your monthly repayments would be and the upfront costs you’d likely pay.

You can also book a time with a Commonwealth first home loan specialist by calling 13 2221.

CommBank publishes a property report that may help you understand the real estate market. The bank has also created a CommBank Property App that you can use to search for property.  The link to download this app is available on the same webpage.

If you are eligible for the First Home Loan Deposit Scheme, CommBank will help you process your application. The scheme helps first home buyers to purchase a home with a low deposit. You can read details about this scheme here and speak with a CommBank home lending specialist to understand your options.

How do I apply for a home improvement loan?

When you want to renovate your home, you may need to take out a loan to cover the costs. You could apply for a home improvement loan, which is a personal loan that you use to cover the costs of your home renovations. There is no difference between applying for this type of home improvement loan and applying for a standard personal loan. It would be best to check and compare the features, fees and details of the loan before applying. 

Besides taking out a home improvement loan, you could also:

  1. Use the equity in your house: Equity is the difference between your property’s value and the amount you still owe on your home loan. You may be able to access this equity by refinancing your home loan and then using it to finance your home improvement.  Speak with your lender or a mortgage broker about accessing your equity.
  2. Utilise the redraw facility of your home loan: Check whether the existing home loan has a redraw facility. A redraw facility allows you to access additional funds you’ve repaid into your home loan. Some lenders offer this on variable rate home loans but not on fixed. If this option is available to you, contact your lender to discuss how to access it.
  3. Apply for a construction loan: A construction loan is typically used when constructing a new property but can also be used as a home renovation loan. You may find that a construction loan is a suitable option as it enables you to draw funds as your renovation project progresses. You can compare construction home loans online or speak to a mortgage broker about taking out such a loan.
  4. Look into government grants: Check whether there are any government grants offered when you need the funds and whether you qualify. Initiatives like the HomeBuilder Grant were offered by the Federal Government for a limited period until April 2021. They could help fund your renovations either in full or just partially.