How to buy a home
It’s easy to feel overwhelmed by the home-buying process, it’s one of the largest purchases you’ll ever make. And while we can’t make the butterflies go away completely, we can let you know what could be around the corner so you can plan for a more simple and stress-free experience.
1. Preparing to buy
The first step in finding the right property at the right price, is being confident about what you could afford.
While some government incentives can be used at the same time, make sure you check for exclusions as incentives can vary based on which state or territory your property’s in.
- The First Home Super Saver Scheme (FHSS) allows eligible first home buyers to withdraw some of their voluntary super contributions, and put them towards their home deposit.
- The First Home Owner Grant (FHOG) is a one-off amount paid to first homeowners. Check with your local government: ACT, NSW, NT, Qld, SA, Tas, Vic, WA
- First home buyers can also access stamp duty exemptions, concessions or reductions. Check with your local government: ACT, NSW, NT, Qld, SA, Tas, Vic, WA
- The First Home Loan Deposit Scheme (FHLDS) is available to eligible first home buyers, buying an existing home or building a new one with a deposit of as little as 5% (lenders criteria apply). The government guarantees a participating lender up to 15% of the value of the property bought that’s financed by an eligible first home buyer’s home loan. Westpac isn’t currently a participating lender, but you can discover who is by visiting the government site.
So you have your deposit and a rough price range. Now it’s time to work out the upfront costs you’ll need to budget for.
- Stamp duty. At Westpac, stamp duty is an upfront cost and can’t be included as part of your Westpac home loan. Our cost calculator estimates this for you.
- Lenders Mortgage Insurance (LMI). We may still be able to lend to you, even if you don’t quite have a deposit that’s 20% of the property’s value, and you could include this cost as part of your loan – our cost calculator estimates LMI for you.
- Government fees. These include things like Transfer Duty, the Mortgage Registration Fee and a Land Transfer fee, if applicable. The cost can vary between states and territories, and our cost calculator estimates these for you.
- Solicitor/conveyancer. Can include an initial review of a Contract for Sale, and the full process to settlement if you go ahead – our cost calculator estimates this for you.
- Building and pest inspections. A good idea to check the property before you buy – our cost calculator estimates this for you.
- Bank fees/loan set-up costs. Can include an establishment, valuation and settlement fee. Your lender can help you with this.
- Building, home & contents insurance. You may need building insurance as part of your home loan agreement. Home & contents insurance is optional cover against loss or damage caused by flood, fire, storm, theft and more.
- Other costs. Like removalists and the cost of breaking a rental lease early (or selling your current property if you're buying your next home).
There’ll be ongoing property costs too, like insurance and council rates/strata fees. You should factor these in when calculating your mortgage repayments.
Your income and expenses are two of the main considerations for any lender, so having a strong savings history with minimal credit card debt or other loans can help. Ask yourself the deep questions, like “how much will I be happy to repay every month?” and “will I be able to afford these repayments if interest rates rise?” (they reached 7.25%p.a. back in 2008). Here are some helpful tools:
- Affordability calculator – based on what you’d feel happy repaying
- Maximum loan calculator – the most we may be able to lend you based on your expenses, income, debts and assets
- Repayment calculator – as a general rule of thumb, your monthly repayments shouldn’t be more than 1/3 of your gross monthly income.
Doing plenty of groundwork can help you become a more confident buyer. Here are some things worth considering:
- Work out what’s important to you, like in-area schools, nature, public transport and shopping centres
- Think about taking a short stay in the area
- If it's within 20km of an airport, check maps of the flight paths
- Dig deeper to uncover any current or proposed infrastructure or construction projects, power substations or electrical towers that may affect the property’s value
- If the area’s prone to bushfires, storms and floods you're likely to pay significantly higher insurance premiums – check with a home insurance provider
- Get a feel for the market by watching our property market update.
Know that property inside out
Search an address or suburb for our full online Property Report, complete with sale history, price guide* and neighbourhood vibe, as well as capital growth and expected rent income.
Your home loan’s going to be with you for a while, so go with a lender that has exceptional value-for-money and an outstanding track record for before and after service.
Here’s how we help:
- Track your online application. Follow your progress and get notifications – it should only take around 20 minutes to apply.
- One point of contact. When you submit your online application, you’ll be assigned a home finance manager who’ll call to answer your questions, move things forward and run a credit check.
- Getting ahead. We genuinely want you to own your property sooner. That’s why our fixed loans give you a $30k prepayment limit2, and our variable loans come with unlimited extra repayments. Our Rocket Repay loan also comes with a full offset account to help you save on daily interest.
- Financial breathing space. If you’re ahead on your repayments, you’re free to redraw3 the extra amount you’ve paid anytime with no redraw fee. You can also apply for Parental Leave, or to pause or reduce your variable loan’s Principal & Interest repayments for a while4.
- You’re in control. Our customer hub lets you know how to use the Westpac App and Online Banking to check your rate, change repayments, redraw, download statements and more.
- More than a great rate. We’re here for our customers during life’s tough times, including job loss support and disaster relief (depending on your individual circumstances, and subject to change).
- Proud pioneers. As Australia’s first bank, our values are centred around helping. We had the country’s first female bank teller, the first female CEO of a major company, and we were the first to introduce paid maternity leave. In the early 2000s we became a founding Platinum member of the Australian Network on Disability. In 2018 we achieved the highest Platinum status for LGBQTI inclusion in the Australian Workplace Equality Index awards. As for the future, we’ve made a commitment to reduce our thermal coal lending exposure to .
- Our promise to you. Westpac's vision is to be one of the world's great service companies. Our service promise includes a dedicated Customer Advocacy team to ensure you’re listened to in a fair way, and that help is at the heart of everything we do.
We have three main types of home loan, each available for investors too. Our Rocket Repay Home Loan (standard variable rate) gives you handy features like a 100% offset account and redraw. Our Fixed Options Home Loan gives you certainty over your repayments, lets you lock in our best fixed rate for 1-5 years, and has a generous limit on extra repayments, as well as redraw. Our Flexi First Option Home Loan is our basic loan with our lowest variable rate, unlimited extra repayments so you can get ahead, and redraw.
Both Rocket Repay and Fixed Options can be packaged# for an interest rate discount, fee waivers and savings on a range of products. You can also split your loan balance into separate fixed rate and variable rate accounts.
“I’m building a new home”
Planning major renovations or building a brand new home? Available for no extra fee on most of our home loans, our construction option lets you draw funds at each construction stage – so you only pay interest on what's drawn.
“I’m just buying land”
Buying land without a building contract? You can apply for a regular Westpac home loan, without the construction option.
You can apply for any of our home loans online, we’ll just need to see a bit more documentation.
“I already own property”
Hunting for your next home? You may be able to apply for a top up or a new home loan using the equity in your current home as security. Or our Bridging Loan can help fill the finance gap between buying and selling (conditions apply).
Confused with the home loan terminology? Learn the lingo
You have four ways to apply with Westpac.
1) Apply online and track your application
You can save, submit and track your home loan application online for conditional and full approval (or a refinance), all the way to settlement. We’ll show you what you could afford to spend on a property and the estimated costs involved (stamp duty can’t be included in your Westpac home loan). It should only take around 20 minutes to apply. Then your assigned home finance manager will be in touch to answer all your questions, and progress things to the next stage.
Online applications are available for all loans (unless you’re building a new home, applying for our Bridging Loan or increasing your current Westpac home loan, in which case please request a call back).
2) Have a lender call you back
Request a call back if you’d prefer one of our home lending managers to complete your application. Or if you’re planning to build a new home, you’re after our Bridging Loan or increasing your current Westpac home loan.
3) Apply through your broker
If you’re going with a Westpac-affiliated broker, they’ll guide you through your application and answer any of your questions.
4) Apply in-branch
Call your nearest branch to arrange a meeting. Locate a branch
As a first-time home buyer, you’ll need to show us proof that you’ve been consistently saving for a deposit or making timely rent repayments, e.g. savings account statements or evidence of a continuous 6-month rental payment history.
To improve your credit score, it may also be worth paying off any large credit card debts or personal loans before you apply.
There can be up to two borrowers on a Westpac home loan, and if you’re applying online, having the other borrower join the application can speed up the process.
A Westpac conditional approval (also known as pre-approval, indicative approval or approval-in-principle) means you're approved for a loan of a certain amount – as long as your situation doesn't change and the property meets our lending eligibility criteria. It’s the first step in getting your home loan approved, and:
- Confirms the deposit you’ll need and the most you could borrow
- Gives you the confidence to bid at auction or make an offer
- Means you’ll be treated as a serious buyer by agents
- Let’s you make changes to the loan before full approval
- Includes a credit report check (after you’ve spoken with a home finance manager)
- Is valid for 90 days, but if you need more time and you can confirm your finances haven’t changed, we can renew it.
Before signing contracts, remember to run the address past your Westpac home finance manager, as there are some properties we might not lend against (like very small units, certain suburbs or apartment blocks, tiny houses, hobby farms and places near large power lines).
Finding ‘the one’ can take time, expect some disappointment and butterflies along the way.
- Take plenty of photos/videos to jog your memory later
- Take photos of any problems you notice, like sagging ceilings, wall cracks, water stains, wonky roof lines, an old kitchen, corrosion, mould and sloping land
- Tick off your checklist as you go
- Ask the agent why the vendor’s selling and if there are any known issues with the property
- Bring a measuring tape to make sure your furniture will fit
- If you're keen on a closer look, ask for a private second viewing
- Tip: it’s not always the highest price that wins, sometimes it’s being the quickest. Be prepared to make a same-day offer or pre-auction offer, subject to finance and a later building and/or pest inspection.
First, a quick summary of the sale process.
- Private treaty. If your offer’s accepted in a private sale, a vendor’s deposit (normally 10%) must be paid when you exchange signed contracts with the vendor. You may get a ‘cooling off period’ depending on your state, territory or contract. From here, the sale of the property is legally-binding, but you won’t technically be the owner until settlement.
- Auction. If you make a winning bid at auction, you’ll sign and exchange the contract and pay your deposit right there on-the-spot. From here, the sale of the property is legally-binding, but you won’t technically be the owner until settlement.
- Off the plan. If you sign a contract and pay a deposit on a property that’s yet to be built, the balance is payable at settlement – usually when construction’s completed – which can be several years later.
- Conditional approval. Having one gives you confidence to negotiate or bid at auction, check yours is still valid.
- Have you found a legal agent? A conveyancer or solicitor can review your contract and loan documents – highly recommended for first home buyers.
- Address check. Run the property past your lender in case there are any lending exclusions on the property/block, or issues affecting its value (and your LVR).
- Contract of Sale. Ask the agent for a copy as soon as you can, then work with your conveyancer/solicitor so you understand the conditions, and iron out any kinks before you begin negotiations. For example, a 30-day settlement period might prove too short.
- Off the plan. Research the developer and builder. And talk with your Westpac lender, as future valuation changes will affect your LVR. For more, check with your local government: ACT, NSW, NT, Qld, SA, Tas, Vic, WA
- Unit strata report. Check for poor management, major repairs, disputes, and by-laws like no pets or reno restrictions (e.g. any work affecting waterproofing might need approval at the strata’s annual general meeting). Your conveyancer/solicitor can arrange and check the report.
- Check with local Council. Look for zoning changes, proposed developments and if the property has an elevated insurance risk of flood or bushfire – generally found on the local Council website.
- Pest and building inspection. Hiring an independent professional inspector costs around $500, but it could save you from a costly mistake in the long run. Not only does it ensure the property meets the condition stated in the contract/strata report, it helps you identify hidden damage, like termites and structural problems. You can arrange a time with the real estate agent.
- Reassess any extra costs. Did your research reveal anything unexpected, like a roof in need of repair?
- Arrange your deposit. The vendor deposit is normally 10% of the purchase price: if your vendor prefers a bank cheque, the fastest way to get one is likely in-branch. With Westpac, allow 2-3 business days for the money to land in their account, or you can pay a small fee to speed up the process, though there’s no guarantee it’ll clear earlier. If the vendor prefers a bank transfer, check your daily transfer limits.
- Know your cooling-off period (unavailable with auctions). Most states and territories have a private sale ‘cooling off period’ after you exchange contracts and pay your deposit. During this time, you can pull out of the sale, but you’ll forfeit some of your deposit. In some states it’s around 0.25% of the purchase price, which would be $250 for every $100,000. Check the details with your local government ( ACT, NSW, NT, Qld, SA, Tas, Vic, WA). And talk with your conveyancer/solicitor if you’d like to negotiate a cooling off period waiver, addition, reduction or extension.
Before auction day
Remember, as long as the reserve price is met, the winning bidder has no option but to buy the property. So attend a few auctions to get used to the vibe and psychological tactics of the auctioneer, real estate agent and bidders.
Talk to the real estate agent to register as a bidder, and to find out how the vendor’s deposit (normally 10% of the sale price) should be paid. If you want, you can make a pre-auction offer, or authorise someone else to bid and sign on your behalf.
Set an amount no higher than the property’s fair market value, as ‘over-bidding’ could affect your loan-to-value ratio. We may only carry out our bank valuation after the auction, so talk with your home finance manager about its most accurate estimated value. And remember, a winning bid at auction is a binding contract, so ensure you’re pre-armed with a conditionally approved home loan and, ideally, a building and pest inspection report.
On auction day
If you haven’t already, register as a bidder as you arrive. Remember your limit and the property’s fair market value. If you make the winning bid – congratulations! You’ll immediately enter into a binding contract, with no cooling off period. Simply sign the contract and pay the vendor’s 10% deposit there and then.
You can put in an offer on a property through a private sale (treaty), and before an auction. If it’s a private sale, you can get your building/pest inspections done either before exchanging contracts, or during any cooling off period.
Sale price negotiations are generally made through the vendor’s real estate agent. And depending on the vendor’s situation – and mood – the process can take anything from a few minutes to many weeks. Once both parties agree on a price, you’ll need to sign the contract of sale and pay your deposit.
- Multiple inspection reports are costly, consider getting yours during any cooling off period.
- You could make a conditional offer based on a satisfactory report and finance.
- If you already have an inspection report, you can use it to negotiate the price down or ask the vendor to make repairs before settlement.
- If other buyers are interested, getting your signed contract to your legal agent, then back to the vendor fast, might just pip your competition at the post.
- Some buyers pay a ‘holding deposit’ along with their offer to show they’re a serious buyer. It's fully refundable until contracts are signed. It’s also optional, and if a cheeky estate agent says otherwise, ask them to put it in writing.
At auction. If you place a winning bid at auction, you’ll need to sign the contract and pay your deposit on-the-spot, with no cooling-off period.
In a private treaty. If it was a private sale and you’ve entered a cooling-off period, you’ll have several days to change your mind, but you’ll forfeit some of your deposit (see ‘Before signing a contract’). If you decide to go ahead, you need to pay the rest of the deposit at the end of your cooling off period to secure the sale.
From here the property sale is legally-binding, though you won’t technically own it until settlement.
3. Finalising your loan
Almost there. Once you’ve exchanged contracts, we’ll need to value the property to finalise your application.
We’ll organise to value the property online based on comparable sales and market trends in surrounding areas and, if needed, arrange an on-site bank valuation.
If it comes in lower than expected, we'll let you know if there’s any shortfall you’ll need to cover. For example, if your loan-to-value ratio is more than 80%, you could still get full approval if you take out Lenders Mortgage Insurance.
If you want to change your loan repayment structure and features, let your home finance manager know. In the meantime, they’ll do some final checks and confirm everything's all good.
If you have full approval, they’ll draw up your loan documents and you’ll see a notification in your online application. Retrieve your application
Your home finance manager will be in touch to walk you through all the documents you need to sign, including the mortgage documents used to secure your loan.
- Remember to go through the fine print, particularly with your conveyancer/solicitor.
- Once you sign and accept your loan documents, we’ll begin preparing your loan for settlement. As soon as you get your docs, read them, sign and accept them at least two weeks before your settlement is due.
- Rental notice. If you’re currently renting there’ll be a minimum notice period, so let your real estate agent know your move date.
- Utilities. Speak with your gas, electricity, internet/phone company about your move date and your new home’s address.
- Final inspection. Before settlement day, inspect the property thoroughly to make sure nothing’s changed and that all the fixtures and inclusions match up with the contract. Speak to the real estate agent if you have any concerns.
- Settlement details. Confirm the details of your settlement, like the correct final amounts.
- Settlement funds. Have all your remaining deposit/stamp duty ready in your allocated account a few days before settlement. If it's not there, the property can't settle. This is especially important if your money’s sitting in a savings account which can't transfer externally.
- First repayment. Ensure you have enough in your account to cover your first home loan payment.
- Cover yourself. Depending on the state or territory, buyers either take on the property’s risk on exchange of contract or at settlement. So we’ll need to know you’re covered with building insurance by settlement. If you packaged # your Westpac home loan, you’ll get up to 10% discount on our award-winning Home & Contents or Landlord Insurance: call us on 1300 650 255. Your home loan’s one of the largest purchases you’ll ever make, so it's also worth considering income protection insurance too, so you can cover your repayments if you ever lose your job or become too ill to work.
The home stretch. Settlement day’s generally 30-90 days from contract exchange, though it depends on your agreement.
The amount and your eligibility will vary depending on which state or territory your property’s in (see ‘Getting your deposit together’).
- First Home Owner Grant: your broker or Westpac will organise and lodge yours with your state’s revenue office on your behalf.
- Stamp duty concessions: your conveyancer/solicitor will normally organise and lodge this on your behalf.
What a milestone, the day you become the owner of your new property!
Payment & paperwork
The legal and financial representatives of both you and the seller meet to finalise the payment. It’s organised at a time and place agreed upon by both parties, and will generally be managed by your conveyancer/solicitor and Westpac home finance manager. They’ll settle the balance owing on the property using the home loan you’ve taken out, and the property ownership will be transferred from the seller to you.
- Don’t worry, you don’t need to be at the meeting.
- Stamp duty’s paid at this stage, your conveyancer/solicitor can do this on your behalf.
- Make sure the money needed to complete the purchase (like the balance, conveyancer/solicitor and government fees) are in your nominated account.
- Once both parties have signed all the documents, they’re sent to the titles office to register you as the new owner of the property.
Get those keys
Once you’ve settled you can pick up the keys from the real estate office, and your next adventure begins. Congratulations!
Moving in checklist
- Inform your energy, water, internet utilities at least 3 weeks before moving
- Research removalists, book well in advance
- Redirect your mail with Australia Post
- Disconnect the energy accounts of previous tenants
- Pack a ‘first night’ box (towels, pjs, toothpaste, kettle, tea etc)
- Prep an ‘unpacking’ box (allen keys, screwdrivers, tape)
- Keep your box of ‘important things’ with you in case it gets lost
- Pack a ‘favourite things’ box for the kids to help them settle
- Friends could look after young children and pets
- Confine pets out of harm’s way in one room
- Home & contents insurance, including moving day cover during transit
- Long-empty homes might need a professional clean
- SMS/email friends & family your new address
- Update your new address: bank, super, car/health/personal insurance, MyGov, Medicare, ATO, electoral roll, subscriptions, schools etc
Leasing checklist for rentvestors
NOTE: You’ll only qualify for the First Home Owner Grant if you live in the property yourself at least 1 year before renting it.
- Disconnect the energy accounts of previous tenants
- Landlord insurance
- Think about appointing a property manager to arrange all the advertising, interactions and maintenance
- Arrange a professional clean and any repairs (appliances, toilet, sink, fridge and oven)
- Check it meets the Residential Tenancies Act
- Prep it for advertising and inspections
- Put everything in writing in your rental agreement
Welcome to the next exciting chapter of your life. Your first home loan repayment is normally due within the first month of settlement. Check you’ve got the right amount in the right account, and your direct debit (or scheduled payment) is set up and ready to go.
You’ll find your repayment due date in your home loan contract, as well as in the Westpac App and Online Banking – which are by far the easiest ways to manage your loan, check repayments and redraw etc.
A home loan that evolves with you
Your Westpac home loan has been designed to match your changing lifestyle, so you can become mortgage-free sooner. Whether you’re in the fortunate position of being able to make extra repayments, you’d like to redraw some funds, or reduce or pause your repayments for a while, we’re here to help.
Things you should know
Credit criteria, fees and charges apply. Terms and conditions available on request. Based on Westpac's credit criteria, residential lending is not available for Non-Australian Resident borrowers. This information has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information and, if necessary, seek appropriate professional advice. This includes any tax consequences arising from any promotions for investors and customers should seek independent advice on any taxation matters.
1. Family Security Guarantee: The guarantor should consider the risks associated with the Family Security Guarantee, mainly that if the borrower defaults on their loan, the guarantor is liable to pay up to the maximum of the portion of security they’ve put forward as a guarantee. You’ll be required to seek independent legal advice before offering to guarantee a loan. Credit criteria apply to the assessment of the adequacy of any proposed guarantee limit.
Family Security Guarantee can be provided by parents or legal guardians, siblings, and children. Equity access, owner builder applications, Line of Credit and Bridging Loan products are not eligible under the Family Security Guarantee. Other Exclusions may apply. Not available for the purposes of debt consolidation, owner builder construction, cash out, or addition of a security guarantee to an existing loan. $150k minimum loan size applies. Credit criteria, fees and charges apply. Offer may be varied or withdrawn at any time. Full eligibility criteria on the Family Security Guarantee is available on request.
2. Break costs on prepayments and switching: customers can make total prepayments of up to $30,000 (cumulative) for fixed loans, without costs or fees applying. You may incur a break cost and administration fee if your prepayments exceed this threshold, or if at any time before the end of a fixed rate period you switch to another product, interest rate (fixed or variable) or repayment type.
3. Redraw facility: if you have ‘available funds’ (you’re ahead on your home loan repayments) and you’ve activated your redraw facility, you’re free to redraw them with no redraw fee. Read our form for full details. Redraw will not apply if you have a Bridging Loan.
4. Conditions, eligibility and suitability criteria apply.
- Reduced loan repayments: reduction of up to 50% available for up to 6 months on variable home loans held with us for over 12 months. It is important to understand that at the end of the reduced repayment period, the repayment amount will increase to adjust for the reduced repayments. This ensures that the loan is still repaid within its original term. Read the disclosure documents for your selected product or service before deciding if this option is right for you.
- Mortgage repayment pause: available for up to 6 months on variable home loans held with us for over 12 months.
- Parental leave: if you’ve held your variable home loan with us for over 12 months, you could be eligible to reduce your home loan repayments up to 50% for up to 12 months while on maternity or paternity leave, subject to approval.
* An automated valuation model estimate (AVM Estimate) is a statistically derived estimate of the value of the subject property. An AVM Estimate is generated (i)by a computer driven mathematical model in reliance on available data; (ii) without the physical inspection of the subject property; (iii) without taking into account any market conditions (including building, planning, or economic), and/or (iv) without identifying observable features or risks (including adverse environmental issues, state of repair, improvements, renovations, aesthetics, views or aspect) which may, together or separately, affect the value. An AVM Estimate is current only at the date of publication or supply. An AVM Estimate must not be relied upon as a professional valuation or an accurate representation of the market value of the subject property as determined by a valuer. CoreLogic expressly excludes any warranties and representations that an AVM Estimate is an accurate representation as to the market value of the subject property. To the full extent permitted by law, CoreLogic excludes all liability for any loss or damage howsoever arising or suffered by the recipient, whether as a result of the recipient's reliance on the accuracy of an AVM Estimate or otherwise arising in connection with an AVM Estimate.
#Premier Advantage Package: Conditions of Use and $395 annual package fee applies. You must either hold or be approved for a Westpac Choice transaction account in order to qualify and continue to receive the benefits of the Premier Advantage Package. Applicants must have a Westpac Choice transaction account linked to the home loan at the time of settlement and must keep this account open for 60 days after settlement. Before deciding to acquire a Westpac Choice account, read the terms and conditions, and consider whether the product is right for you. Tax consequences may arise from this promotion for investors and customers should seek independent advice on any taxation matters.