dsl-logo

Home Loans

Personal Loans

Car Loans

Business Loans

Credit Cards

Banking

Health Insurance

dsl-logodsl-logo
dsl-logo

Home Loans

Personal Loans

Car Loans

Business Loans

Credit Cards

Banking

Health Insurance

Background

How to Apply for a Home Loan Step-by-step

  • We analysed 10 of Australia's biggest lenders and break down the most common requirements when applying for a home loan
  • Plus, a mortgage broker with over 20 years of experience in real estate offers practical tips for each stage of the application process

Enter loan amount

$

A father and daughter celebrating in the living room of their new house

Applying for a home loan can be straightforward when you know how the process works from start to finish. Our guide covers everything you need to know.

What to do before you apply for a home loan

It’s important to get your finances in order before you apply for a home loan. This includes building a history of savings, paying down debts and doing initial research on home loan options that may be suitable for you.

Here’s what to do before you apply for a home loan:

1

Save for a deposit

You’ll generally need a deposit saved before a lender considers your home loan application, unless you apply with a guarantor (in which case you may be eligible for a no deposit home loan). You can use a high interest savings account or term deposit with a high rate to help you grow your savings faster.

The bigger your deposit, generally the more you can borrow. Most lenders require a minimum deposit of 10%, but the standard is 20% of the value of the property to avoid lender’s mortgage insurance (LMI). There are government grants and initiatives, like the Home Guarantee Scheme (HGS), which can help eligible home buyers buy a home with a deposit of as little as 5% (or 2% for single parents) without paying LMI. It’s available through participating banks.

2

Pay down your debts (if any)

You should aim to pay down any outstanding debts and reduce any credit limits at least 12 months before you apply for a home loan. Every $10,000 of debt you clear can increase your borrowing capacity by $100,000, according to Mansour Soltani, Money's home loan expert. This can show financial responsibility which lenders look for in borrowers. Avoid taking out unnecessary credit in the meantime.

3

Check your credit score

Check your credit file for any red flags or errors that could potentially impact your credit score or affect your ability to secure a home loan with a competitive interest rate. You can request a free copy of your credit report from any of the main credit bureaus in Australia (e.g. Equifax, illion and Experian) every three months.

4

Estimate your borrowing capacity

This is how much a lender may be prepared to lend you based on your income and broader financial situation. Understanding your borrowing capacity can help you set a realistic budget and expectations when shopping for a home. You can use an online calculator from any lender to estimate your borrowing capacity. According to the ABS, the average size of new home loans in Australia is $599,000 for owner-occupiers.

5

Know your potential LVR and how it can impact your mortgage rate

Your loan-to-value ratio (LVR) is your loan amount as a percentage of your property's value. For example, if you want to buy a home for $600,000 with a deposit of $120,000, you’d need to borrow $480,000 from the bank, resulting in an 80% LVR. An LVR above 80% will generally incur LMI. LVR is lenders' most important metric when assessing your home loan application and home loan interest rate, according to Mansour Soltani, Money's home loan expert.

6

Compare different lenders

Do a home loan comparison of different banks and non-bank lenders and their products. Which lenders offer the lowest rates? Which have first-home buyer incentives or cashback offers if you’re refinancing? Be sure to compare the different home loan features, terms and conditions of each product. Being informed about what’s available from multiple providers may empower you to negotiate with your lender during your application.

Consider seeking professional advice when applying for a home loan

Mansour Soltani home loan expert

Mansour Soltani , Money.com.au's Home Loans Expert

“Work with a professional who’s up to date with all home loan types available and the banks’ changing appetite for certain risks. Otherwise, you could end up contacting the wrong lender, getting rejected or ending up with a rate that’s not competitive. Alternatively, you could end up with a financial product that’s not suited to your life stage and that can put you years behind.”

Mansour Soltani , Money.com.au's Home Loans Expert

4 documents you need when applying for a home loan

When applying for a home loan, you’ll need to provide some paperwork to verify your personal and financial information. Here are some of the documents lenders will ask you for during your home loan application:

1. Identification documents

You’ll be required to satisfy the 100 points of ID system when applying for a home loan. You’ll be asked to provide at least one primary photographic form of ID (e.g. passport or driver’s licence), and one non-photographic form (e.g. birth certificate), as well as secondary documents like a Medicare card, bank statements and utility bills.

Home loan 100-point personal identification system

    circle-green-tick
  • Australian passport
  • circle-green-tick
  • Birth certificate
  • circle-green-tick
  • Australian citizenship certificate
    circle-green-tick
  • Driver’s licence
  • circle-green-tick
  • Student ID
  • circle-green-tick
  • Government employee ID
  • circle-green-tick
  • Photo identification card issued for Australian regulatory purposes (e.g. aviation/maritime security)
  • circle-green-tick
  • Defence Force identity card
    circle-green-tick
  • Department of Veterans Affairs (DVA) card
  • circle-green-tick
  • Centrelink card
    circle-green-tick
  • Medicare card
  • circle-green-tick
  • Property lease agreement (current address)
  • circle-green-tick
  • Taxation assessment notice
  • circle-green-tick
  • Bank statements
  • circle-green-tick
  • Council rate notice
  • circle-green-tick
  • Utility bills

2. Proof of income

Your lender will require some proof of income to assess your borrowing power. You may be asked to provide:

    check-circle
  • Two payslips for the year to date or tax returns for the year to date if self-employed
  • check-circle
  • A contract of employment which states your annual salary (optional)

If you're self-employed:

    check-circle
  • A tax return for the year to date (some lenders may require two latest returns)
  • check-circle
  • Up to two years of financial statements, including profit and loss (P&L) statements

First-home buyers with a deposit of less than 20% may be asked to submit additional paperwork, including:

    check-circle
  • Bank statements showing your deposit has been accrued over time and sitting in a bank account for at least three months.

OR

    check-circle
  • A tenant ledger or rental reference letter signed by a real estate or property manager confirming you’ve always paid rent on time. The letter should show your name, start lease date and weekly rent sum.

3. Bank statements

Most lenders will ask for three months of bank statements to verify your income against your living expenses. If you’re a first-home buyer, they will also check that your deposit has been accrued over time.

What lenders want to see is a genuine history of savings and responsible spending. Any late fees will be a red flag. If you want to know how your bank statements might look to a lender, try our Free Bank Statement Health Check.

Be prepared to have to explain any mismatch in your earnings and expenditures. Whether it’s a recent car purchase or a cash gift from family (in which case you’ll need a letter from your benefactor), it’s important to indicate this to your lender for full transparency.

4. Proof of your assets and liabilities

Your lender will also ask for a summary of your debts and assets to calculate your debt-to-income ratio (the percentage of your monthly gross income going towards debts) and assess your ability to repay a home loan.

Here’s a snapshot of what’s considered a debt or an asset:

DebtsAssets

Money in a savings account or term deposit

Investments (e.g. shares, mutual funds, bonds)

An existing home loan

Cars and other vehicles

Buy now, pay later (BNPL) accounts

Real estate

Student debt

Plant, machinery, livestock, etc

Step-by-step guide on how to apply for a home loan

1. Fill out the lender’s home loan application form

You’ll be asked some basic questions about your finances, deposit or equity (if you’re refinancing) and the type of property you want to buy. Based on this information, your lender will estimate how much you can borrow and at what rate.

It’s usually quicker to apply for a home loan online via the lender’s website, but you can alternatively book an appointment with a home lending specialist if you prefer to speak to a person, are self-employed (different eligibility requirements apply), or generally have questions about the process. You can apply for a home loan directly with a lender or through a mortgage broker.

ANZ home loan application
moneyLogo

Mansour's tip: Every bank has a slightly different home loan application process and credit underwriting standards. Don't get overwhelmed with the required information and take it step by step. Remember, communication with your lender is key throughout the process.

2. Submit your documents

The lender will give you a list of paperwork you need to submit, including payslips, bank statements, identification documents, etc. A home loan specialist will verify your income against your expenses and liabilities to more accurately assess your borrowing capacity. They will apply an additional serviceability buffer of 3% (to ensure you can still afford your mortgage if interest rates rise). It’s best to collect all necessary documents in advance to help speed up the process.

Megan is a Finance Writer and Head of PR at Money with over a decade of industry experience. She keeps her finger on the pulse of financial trends, providing journalists and media with data, insights, and news that help Australians navigate complex topics and concepts. She's certified in Finance & Mortgage Broking and is compliant to provide general advice in Tier 1 General Insurance.

Mansour Soltani is Money.com.au’s home loans expert. He’s a mortgage broker with more than 20 years of experience in the finance and real estate industry. Mansour is the Director of Soren Financial and has been featured in publications such as the ABC, Domain.com.au and Australian Broker.

Divider
logo

Our Money Promise

Money Pty Ltd (trading as Money) (ABN 42 626 094 773) Australian Credit Licence 528698 provides information about credit products. Money does not compare all products or issuers available in Australia. We are not a broker or credit provider and when we provide information via this website, we are not providing you with a recommendation or suggestion about a particular credit product. We may receive a commission when you apply for a home loan as a result of outbound links on this website.

This material has been prepared by Money Pty Limited (ABN 40 664 954 536) (Money, ‘us’ or ‘we’). Money is a corporate authorised representative (CAR 001307399) of 62 Consulting Pty Limited (ABN 88 664 809 303) (AFSL 548573) (62C). The material is for general information only and is not an offer for the purchase or sale of any financial product or service. The material is not intended to provide you with financial or tax advice and does not take into account your objectives, financial situation or needs. Although we believe that the material is correct, no warranty of accuracy, reliability or completeness is given, except for liability under statute which cannot be excluded. Please note that past performance may not be indicative of future performance and that no guarantee of performance, the return of capital or a particular rate of return is given by 62C, Money, any of their related body corporates or any other person. To the maximum extent possible, 62C, Money, their related body corporates or any other person do not accept any liability for any statement in this material.

The information on this website is intended to be general in nature and has been prepared without considering your objectives, financial situation or needs. You should read the relevant disclosure statements or other offer documents prior to making a decision about a credit product and seek independent financial advice. Whilst Money.com.au endeavours to ensure the accuracy of the information provided on this website, no responsibility is accepted by us for any errors, omissions or any inaccurate information on this website.

Interest rates, fees and charges are subject to change without notice. Before acting on any information, you should confirm the interest rates, fees, charges and product information with the provider. For clarity, where we have used the terms “lowest” or “best” these relate solely to the rates of interest offered by the provider and not on any other factor. The application of these terms to a particular product is subject to change without notice if the provider changes their rates.

The calculator provided on money.com.au is intended for informational and illustrative purposes only. The results generated by this calculator are based on the inputs you provide and the assumptions set by us. These results should not be considered as financial advice or a recommendation to buy or sell any financial product. By using this calculator, you acknowledge and agree to the terms set out in this disclaimer. For more detailed information, please review our full terms and conditions on the website.

Assumptions:

  • The calculations do not account for changes in interest rates or other market conditions that may occur.
  • Results are approximations and may differ from actual payment schedules or amounts.
  • The calculator does not include all fees and charges that you may incur in relation to a financial product.

Limitation

  • This calculator does not guarantee the availability of any financial product or the accuracy of the calculations. Please consult a financial advisor or the relevant product provider to obtain specific advice tailored to your circumstances.
  • money.com.au does not accept any liability for errors or omissions, or for any loss you may suffer as a result of relying on these calculations.
Money Pty Ltd trading as Money

ABN: 42 626 094 773 / ACL: 528698 / AFCA: 83955
Money is a corporate authorised representative (CAR 001307399) of 62 Consulting Pty Limited (ABN 88 664 809 303) (AFSL 548573) (62C)
aboriginal-and-torres-strait

Money acknowledges Aboriginal and Torres Strait Islanders as the traditional custodians of country throughout Australia and their continuing connection to land, waters and community.

© Copyright 2025 Money Pty Ltd.