By James Gregors

When you first start researching home loans, it’s natural to search for the “best lenders for first home buyers” or the “best home loan for first time buyers”. These phrases dominate Google searches and they give the impression that a single, universal “best” option must exist.

But here’s the truth:

There is no such thing as the “best” lender for first home buyers.

Nobody can say which bank is best for first home buyers in Australia because banks constantly adjust their lending policies, interest rates and risk appetite. What’s more, every borrower has a unique set of financial circumstances, goals and challenges. For some buyers, the “best” lender is the one with the most competitive interest rate. For others, it’s the one that will consider and potentially approve a non-standard income type, a parental gift, regional postcode or a policy exception. It may also depend on the lender’s criteria around you type of employment, the work you do or the savings you have.

In this article, I’ll explain why “best” is impossible to universalise in terms of home loans and how mortgage brokers actually determine the most suitable lender for each first home buyer. Take a look, then reach out to The Property Education Company for help narrowing down your shortlist. 

Home loans for first time buyers in short:

• There is no universal best lender for first home buyers – the right choice depends on a number of factors.
• Your mortgage broker from The Property Education Company will look beyond headline rates to determine a suitable option for you.
• Different lenders support different purchasing scenarios, such as regional buyers, self-employed applicants, medicos and clients using government first home buyer schemes.
• Australia’s big four banks sit alongside alternatives like Teachers Mutual/UniBank, MyState, Auswide and other second- and third-tier lenders.
• Careful research and having the help of an experienced mortgage broker from The Property Education Company can help you avoid costly mistakes and secure a lender that actually says “yes”.

Download now: 7 steps to buy a property with confidence

Why You Can’t Quantify the “Best” Lender

Be careful if you come across any list promoting “Top 5 First Home Buyer Loans” as these rankings rarely tell the whole story. They’re usually based on headline interest rates or promotional offers, not the finer details that matter in a real loan assessment.

Here are the key reasons you can’t crown one lender as “best” for first home buyers:

1. Every borrower’s situation is different

Your borrowing capacity depends on factors including income type, debts, number of dependents (aka kids), postcode, deposit size, genuine savings history and more.

To add to this, a lender that’s ‘generous’ to one buyer may be extremely conservative with another due to their different circumstances.

For example, some lenders offer competitive options for young professionals, especially in sectors like teaching, healthcare or firefighting. As a broker who specialises in supporting first home buyers, I may place first-time buyers with lenders including Teachers Mutual Bank, UniBank or Health Professionals Bank because they understand these industries and often offer sharp rates or flexible policies.

Meanwhile, another lender might be a great fit for a buyer with a very small deposit, and yet another might be the only option for someone who is navigating parental gifted funds.

2. Lenders classify risk differently

Where one bank sees a standard application, another may see too much risk.

A common example we see at The Property Education Company is postcode restrictions. Some lenders place regional areas in strict categories—Cat 1 through Cat 4—which influence loan-to-value ratios and risk assessments. In one recent case, our team had to advocate heavily for the client because the property fell just outside the lender’s acceptable distance by road, even though it qualified “as the crow flies”.

A comparison website won’t show you this nuance, which is why it is difficult to figure out what might be the ‘best’ home loan for you as a first time buyer just by doing research online.

Read more: Australian first home buyer stories.

3. Banks and lenders change policies all the time

Policies can change frequently, both at the lender level and due to changes in Australian lending policies from APRA, which is the Australian Prudential Regulation Authority.

Sometimes lenders tighten their criteria, at other times they loosen it. Some may pause certain types of lending altogether. For example, Macquarie recently stopped offering loans under trust structures, forcing us to urgently move clients to alternative lenders, even though some were partway through the application process.

So as you can see, the lender that was “best” for you as a first home buyer last month may be unsuitable this month.

4. Loan product features that matter vary by buyer

Offset accounts, redraw capabilities, fixed vs variable options, fee structures, portability and package benefits all influence the suitability of a home loan. Some first time buyers need maximum flexibility in their loan structure; others want the lowest possible rate, so your choice of lender depends on the features you will actually use and which ones will help you reduce overall costs.

How does a mortgage broker help first time home buyers figure out which lender to choose?

A mortgage broker doesn’t look for the “best” lender. We look for the right lender for your financial profile, goals and constraints.

Here are the key factors we analyse:

1. Interest Rates for First Home Buyers

Yes, rates matter and can help reduce the overall cost of your loan, but they’re only one piece of the puzzle. A low rate is irrelevant if the lender won’t approve your loan due to income type, property location or insufficient savings history.

2. Fees and Product Features

Your mortgage broker from The Property Education Company will compare features such as:

• Offset accounts
• Redraw facilities
• Package fees
• Cashback offers
• Fixed vs variable combinations
• Flexibility on extra repayments
  

For some first home buyers, using an offset account can save you more than a 0.05% rate difference in the long term, provided you contribute funds to it on a regular basis.

3. Your Buyer Category

Different buyers fit different lending niches. For example:

• Regional buyers are affected by postcode restrictions, distance rules, and valuation challenges.
• If you’re self-employed, you need a lender that is ok with the perceived risk this presents in comparison to a full time job.
• Medicos/health professionals may qualify for special policies, waived LMI, or higher borrowing capacity.
• Casual or contract workers: some lenders require 6–12 months in the same role; others assess more flexibly.
  
• Buyers using the First Home Guarantee: Only a select group of lenders participate and each has its own appetite for FHBG loans.
• Buyers with children may be limited in the lenders they can access.

Read more: First home buyer grants and incentives in Victoria in 2026

4. Deposit Size and Savings History

Your bank will be looking for evidence of genuine savings, so if you can show you have been regularly adding to your savings you may be able to access a wider cross-section of lenders.

Some lenders prefer you to have a 20% deposit, and this will also help you avoid the expense of paying Lenders Mortgage Insurance, which can add thousands to the cost of your home loan.

5. Gifts, Guarantors and Parental Assistance

A gift of funds or a lump sum you have received will go towards your deposit, but lenders assess them differently.

Some require:

• Specific wording in a letter confirming the gift has been given
• Proof of funds
• Evidence of genuine savings

When you connect with The Property Education Company, we will help structure gifts correctly from day one to prevent delays or declines.

Examples of Lenders for First Home Buyers in Australia

First home lenders: Big Four Banks

The major banks are household names and often feel like the “safe” option when you are borrowing.

• Specific Commonwealth Bank (CBA)
• Westpac
• NAB
• ANZ
  

Pros: Robust systems, strong digital tools, wide policy coverage. These lenders can look favourably on you if you already have an account with them.

Cons: Sometimes conservative, especially with income types or postcode restrictions

Second-Tier Banks as First-Time Buyer Options

Many first home buyers ultimately land with lenders outside the big four because they offer pricing that works for them and stronger serviceability models.

As I have mentioned, the lender you choose will depend on your circumstances, but some examples of lenders we connect clients with include:

• Teachers Mutual Bank / UniBank / Firefighters Mutual / Health Professionals Bank – can be great for young professionals and essential workers
• MyState – often has competitive products and approachable policies
• Auswide Bank – review for competitive rates and flexible servicing options
• St. George – this lender can be strong for certain segments

Smaller/Alternative Lenders

When a scenario needs creativity or additional flexibility, some lenders we may investigate include: 

• Brighton
• Pepper Money 
• Resimac
• La Trobe Financial

These lenders can offer solutions for borrowers with complex structures or non-standard income, even if they are not the first names that come to mind.

Why Careful Research (and Expert Guidance) Matters

A first home purchase involves dozens of moving parts. Your lender choice will affect your:

• borrowing power
• deposit requirements
• monthly repayments
• loan flexibility
• long-term cost
• stress levels throughout the process

Choosing the wrong lender can mean:

• missing out on a property you love
• paying more than necessary
• delays with the application process
• declines that could have been approvals elsewhere
  

How The Property Education Company Helps First Home Buyers

At The Property Education Company, we don’t just compare rates when it comes to lenders, we assess the entire picture. Drawing on years of experience, real case studies and lender updates, our brokers take steps to:

• Analyse your income, deposit, debts, savings and goals
• Match your profile to lenders whose policies suit you
• Navigate complexities such as gifts, regional properties and first home buyer scheme eligibility
• Liaise directly with lender relationship managers on our clients’ behalf
• Keep you informed every step of the way
• Review your loan every six months to ensure the structure is still correct for you
  

We’ve secured approvals for clients who were told “no” elsewhere, simply because we understood which lenders had the appetite and which levers to pull.

There may be no universal best lender for first time buyers, but there is a suitable lender for you. Our job is to find them, so call 0468 026 200 to start the borrowing process.

Lenders for first home buyers: FAQs

1. Which bank is best for first time buyers in Australia?

Nobody can answer this question straight away because the “best” lender depends on your income, deposit, debts, location, job type and future plans. A lender that’s well matched to one buyer may be completely unsuitable for another.

2. How do I find the best home loan for first-time buyers for my situation?

‘Best’ is hard to quantify, but to find a loan that’s right for your circumstances, start by clarifying your budget, deposit and borrowing capacity, then compare interest rates, fees, features (like offset accounts) and lender policies. Working with a mortgage broker makes this much easier, because they compare multiple lenders for you and understand the fine print involved with home loans.

3. Why should I use a mortgage broker instead of going straight to a bank

A bank can only offer its own products, while a broker compares many lenders and products. A good broker understands each lender’s appetite, policies and niches, and can recommend a solution that fits your specific needs rather than a one-size-fits-all option.

How do I choose a lender for my first home loan?

It’s not about the best home loan for first-time buyers, it’s about the one that is most suitable for you.

As MFAA-accredited brokers who specialise in first home loans, we take the time to compare lenders, interpret policies and present you with the best options so you can make your choice with confidence.

Got a goal to buy your first home this year? Not sure which lender can help? Call 0468 026 200 or connect with The Property Education Company. 

About the author:

As an MFAA-certified finance broker, James Gregors has been helping people just like you to build their property portfolio for many years. He is especially dedicated to helping first time buyers experience the excitement of buying their first home.

James loves learning about property opportunities then sharing what he has learnt with his clients. He has a natural flair for figures, which makes him a whiz at working out the most advantageous borrowing opportunities.

Disclaimer: This advice is general in nature. Your full financial situation would need to be reviewed prior to acceptance of any offer or product.

Licensing Statement: Credit Representative 365124) is authorised under Australian Credit Licence 389328.