Why 9 out of 10 first-home buyers use a mortgage broker

Buying your first home is a major milestone. In Australia, it can also feel overwhelming, especially if you're new to the system. That's where a mortgage broker comes in. They act as your personal guide, helping you navigate complex rules, find the best deals, and smooth the journey to homeownership.

According to recent data, nine out of ten first-home buyers in Australia choose to work with a mortgage broker. Why? Because they offer real advantages that can save you time, money, and stress. Let’s explore these benefits in detail.

The role of a mortgage broker

A mortgage broker is a licensed professional who acts as an intermediary between you and lenders. They understand the ins and outs of different loan options, interest rates, and eligibility criteria. Their goal is to find you the best mortgage deal tailored to your circumstances.

Think of a broker as your financial translator and advocate. Whether you’re converting overseas savings into Australian dollars or trying to understand the intricacies of lender criteria, they make the process clearer.

"A good mortgage broker saves you from the pitfalls of comparing dozens of home loan products yourself," says Jane Smith, a Sydney-based financial advisor with 25 years of experience.

Why first-home buyers prefer mortgage brokers

1. Access to a broader range of lenders

Not all lenders advertise their loan products openly. Some are more comfortable working with brokers, especially those who cater to first-time or diverse buyers.

• Major banks, mutual banks, credit unions, and non-bank lenders all have different criteria.
• Mortgage brokers have access to exclusive or non-public loan options.

This broader access often means better rates, fewer restrictions, and tailored solutions for specific situations.

2. Expert guidance through complex eligibility and documentation

Australian home loans require various documents:

• Proof of income (pay slips, tax returns)
• Savings and deposit sources
• Identification documents
• Evidence of Australian legal residence or visa status

For international buyers, this can be complicated. A broker will help you understand what is needed, explain any requirements around overseas income, and assist with gathering the right paperwork.

3. Help navigating deposit sources and overseas funds

Many first-home buyers come with savings from abroad. Converting foreign currency to Australian dollars involves exchange rates and transfer fees. Lenders also want to see the origin of your deposit money to ensure it’s legitimate.

A broker can advise on:

• How much deposit you’ll need (minimum is usually 5-20%)
• Acceptable sources of funds, such as overseas savings, gifted deposits, or superannuation
• Whether you can use these sources to satisfy lender criteria

4. Better understanding of government incentives

Australia offers several schemes for first-home buyers:

• First Home Loan Deposit Scheme (FHLDS)
• First Home Owner Grant (FHOG)
• Stamp duty concessions in some states

A broker will ensure you’re aware of eligibility criteria and help you access these benefits, saving you thousands.

5. Time-saving and stress reduction

The mortgage process can involve multiple lenders, application forms, and negotiations. A broker handles much of this on your behalf, putting your application in the best possible shape.

This often means faster approvals, sometimes within days, rather than weeks or months.

6. Assistance with understanding and managing mortgage costs

In Australia, besides the interest rate, you’ll pay fees, Lenders Mortgage Insurance (LMI), and other costs.

• LMI is a one-time insurance cost paid if your deposit is less than 20%. It protects the lender, not you.
• Brokers can compare total costs across lenders, helping you avoid unnecessary expenses.

7. Ongoing support and future planning

Your financial situation may change. A mortgage broker can help you restructure your loans later or advise on refinancing options.

What to expect when working with a mortgage broker

• Initial consultation: They’ll assess your financial situation and goals.
• Document gathering: They’ll provide a checklist tailored to your circumstances.
• Loan pre-approval: This gives you confidence in your purchase budget.
• Application submission and follow-up: The broker liaises with lenders on your behalf.
• Settlement assistance: They help ensure the process goes smoothly.

Common concerns for newcomers

"Will I qualify for a mortgage?"

Eligibility depends on factors like income, savings, visa status, and the property type. International buyers on certain visas may face restrictions or higher deposit requirements.

Tip: Always disclose your complete situation upfront. A good broker understands the nuances and can advise whether you qualify or what hurdles to prepare for.

"What about documentation?"

Though documentation varies, lenders typically require proof of ID, income, and deposit source. For overseas income or savings, additional paperwork may be needed, such as currency transfer evidence or bank statements.

"How much deposit do I need?"

Most lenders require a minimum of 5-20% of the property’s purchase price. If your deposit is less than 20%, expect to pay LMI — which can be added to your mortgage.

Example: For a $500,000 home, a 10% deposit ($50,000) means you’ll likely pay LMI, but you won't need to pay LMI upfront.

Eligibility tips for international buyers

• Visa status: Common eligible visas include Australian permanent residency, 189, 190, and certain temporary visas.
• FIRB approval: If you’re a foreign investor, ensure you have approval from the Foreign Investment Review Board.
• Income and property limits: Some lenders restrict loans based on property type (off-the-plan vs established) or income sources.

Always consult a knowledgeable broker with experience in international clients to avoid surprises.

In my 20+ years helping migrants secure mortgages

I’ve seen firsthand how navigating Australia's financial system can be daunting for newcomers. Over the years, I’ve helped clients from all over the world — from Asia, Europe, Africa, and the Middle East — unlock the door to homeownership.

A key insight is that a skilled broker doesn’t just find the best deal; they serve as your cultural and financial guide. They translate complex rules, clarify your options, and advocate for your interests.

Final thoughts

Choosing to work with a mortgage broker isn’t just a convenience — it’s a strategic decision. It can save you thousands, reduce stress, and help ensure your path to your first home is clear and confident.

If you’re considering buying in Australia, I highly recommend consulting a licensed broker early in your journey. Their expertise will be your most valuable asset in turning the dream of homeownership into reality.