First Home Buyers FAQs

Q. How much money can I borrow?
A.
The amount that you can borrow, commonly known as your borrowing power, will depend on your income, existing debts and other regular expenses. Use our online calculators to calculate your borrowing power.

Q. How much deposit do I need?
A. You can start to look at buying once you have around 5% of the purchase price.

With our home loan, you typically need a deposit of at least 5% of the property’s value – plus enough to cover stamp duty & other costs associated with buying your home. If your deposit is less than 20% of the property value then you may have to pay for Lenders Mortgage Insurance.

The estimates below do not take into account the money you need for upfront costs.

Purchase Price              
Minimum Deposit
With Mortgage Insurance      
Minimum Deposit
Without Mortgage Insurance     
$200,000
$10,000 $40,000
$300,000
$15,000
$60,000
$400,000
$20,000
$80,000
$500,000
$25,000
$100,000
% of purchase price
5%
20%


If you have a deposit of over 20%, you can avoid the extra costs of Lenders Mortgage Insurance. Alternatively you can use our Get Ahead Start option to bridge the deposit gap.


Q. What is First Home Owner Grant and how can I get it?
A.
The Australian NSW Government’s First Home Owner Grant (New Homes) (FHOG) scheme (the Scheme) was established to assist eligible first home owners to purchase or build a new home. Under the Scheme, eligible first home owners receive a $15,000 government grant. Other states, including Victoria, have similar schemes. Click here to view scheme in other states.

The Scheme applies to new homes only and will reduce to $10,000 on 1 January 2016.

To be eligible for the FHOG:

  • the contract date must be on or after 1 October 2012
  • the purchased or built home must be a brand new home
  • you must be over 18 years old
  • the value of the property must not exceed the First Home Owner Grant Cap of $650,000 for contracts dated between 1 October 2012 to 30 June 2014
  • the value of the property must not exceed the First Home Owner Grant Cap of $750,000 for contracts dated on or after 1 July 2014
  • Click here to view more eligibility criteria

You can apply for the grant directly through us or by submitting a First Home Owner Grant (New Homes) Application form (OFH001) (PDF) at NSW Office of State Revenue. As G&C Mutual Bank is a registered agent for the FHOG, you can apply for your grant when you apply for a loan to buy or build your first home.

Applications must be lodged within 12 months of completion or settlement of your new home.

Q. Can I use the FHOG proceeds to help fund the deposit?
A.
Yes

Q. What costs do I need to be aware of when buying a home?
A. There are several costs associated with buying a home. The deposit for your home purchase, which is usually at least 5% of the purchase price, will be one of your biggest initial outlays. You should also allow approximately 5% for taxes, legal costs and insurance associated with buying a property. These costs include:
  • Stamp duty on a property purchase
  • Stamp duty on a mortgage
  • Transfer registration fees
  • Registration of mortgage fees
  • Title search fee
  • Solicitors/conveyancers fee
  • Loan approval fee
  • Lenders Mortgage Insurance premium (LMI)
  • Pest inspection costs
  • Building report costs
  • Strata search fees

These costs vary depending on the type and value of property or land being purchased. First home buyers purchasing a new property up to $550,000 are exempt from paying stamp duty. Buyers paying between $550,000 and $650,000 pay stamp duty on a sliding scale, and the exemption cuts out after $650,000.

Q. How much does stamp duty cost me and when do I have to pay it?
A.
The stamp duty total cost varies from state to state and depends on the type and value of property or land being purchased. You can obtain an estimate on your potential stamp duty using our Stamp Duty Calculator. Some states require the stamp duty to be paid prior to settlement of the property purchase. Your solicitor/conveyancer can provide advice on this.

Q. Are there ongoing fees?
A. Certain fees apply throughout the life of your loan. These include fees for redrawing or increasing your loan, or for breaking a fixed rate mortgage before the end of the fixed rate period. Other fees may also apply and should be discussed with your G&C Mutual Bank lender. Our Solutions Home Loan has an annual fee for the life of the loan.

Q. How do I apply for a loan?
A.
You can enquire online and one of our Mortgage Consultants will call you or arrange a workplace or home visit at a time convenient for you. Or you can visit any of our Service Centres or give us a call on 1300 364 400.

Q. What documents will I need to apply for a loan?
A.
Basic documentation requirements include proof of income (for example, salary statements, rent received, etc.) and evidence of savings. Self-employed and company applicants need to provide copies of recent tax returns and financial statements. Copies of the Contract of Sale or Building Contracts for new homes are required.

Q. What is the length of the mortgage?
A.
The length of a G&C Mutual Bank mortgage is generally up to 30 years. You can choose a shorter period which will result in  higher monthly loan repayments.

Q. What’s the difference between a fixed rate loan & a variable rate loan?

A.
With a fixed rate loan, your loan interest rate is fixed for a specified period of time, usually between 1 and 5 years. For example, if a 2 year fixed loan rate is 5.74%pa, you will pay interest at 5.74%pa for two years – even if the interest rates change within those two years. This ensures you are paying the same amount in repayments each month for the 2 year period.

However, the interest rate for a variable rate loan will change throughout the life of your loan as interest rates are adjusted for changes in economic conditions. Your monthly interest repayments will fluctuate accordingly.

Q. What is comparison rate?
A.
A comparison rate is an indicative rate that is calculated by taking into account both the interest rate and the fees & charges related to the loan product. A comparison rate includes certain fees & charges but not all fees & charges. You should ensure that you understand the applicable fees & charges before applying for a loan.

Q. What is the difference between principal & interest repayments and interest-only repayments?

A.
Principal & interest repayments include both the interest payable for a period and repayment of a portion of the loan balance (the principal). The loan balance will therefore reduce over time.

Interest-only repayments relate to only the interest charge and the principal does not therefore reduce over time.

Principal & interest repayments are generally higher than interest-only repayments.

Q. What is a redraw facility?
A.
If you are ahead of repayments on your variable rate mortgage, you can redraw those additional funds from your mortgage (subject to certain daily limits). This redraw facility enables you to access those additional funds to cover you for unexpected expenses.

Q. What is an offset account?
A.
An offset account is a transaction account linked with your mortgage, where the balance in the transaction (or offset) account is offset against your mortgage loan balance with interest being calculated on the net amount. This helps you reduce interest payments while maintaining funds in your offset account for your day-to-day or unexpected expenses.

Q. What is Lenders Mortgage Insurance (LMI)?
A.
If you are borrowing more than 80% of the value of your property you are required to obtain Lenders Mortgage Insurance which protects G&C Mutual Bank from losses on the loan. It’s the insurance the lender takes out for the mortgage to protect itself. This enables some first home buyers to buy their property with less than 20% deposit.

Q. How long the settlement usually takes?
A.
The time between exchanging contracts and settlement varies. Four to eight weeks is normal. Settlement time can be negotiated between a buyer and seller depending on their circumstances.