Buying a property — whether it’s your first home, an investment, or a refinance — comes with a lot of questions. We’ve compiled the most common ones we hear from clients across Castle Hill and the Hills District and answered them in plain English. If your question isn’t covered here, give us a call on 0478 501 086 and we’ll help.
The key indicators are: you have a deposit saved (ideally at least 5–10% of the purchase price, plus costs), your income is stable, your debts are manageable, and you have a clear sense of your budget. You don’t need to have everything perfectly in order before you speak to a broker — in fact, talking to us early means we can help you plan the right path to readiness, even if that’s 6–12 months away.
Pre-approval (also called conditional approval or approval in principle) is a lender’s written indication that it’s prepared to lend you up to a certain amount, subject to valuation and final verification of your details. You don’t legally need it to make an offer on a property — but you should have it. Without pre-approval, you don’t know what you can actually spend, you can’t act quickly when the right property comes up, and sellers and agents take you less seriously. Pre-approval typically lasts 90 days and can be renewed.
The minimum deposit required by most lenders is 5% of the purchase price, though some lenders require 10% or 20%. If your deposit is less than 20%, you’ll likely need to pay Lenders Mortgage Insurance (LMI), which protects the lender if you default. The higher your deposit, the more lenders you’ll have access to and the better the rates available to you. First home buyers in NSW may also be able to access government schemes that reduce the deposit requirement.
First-time buyers are often surprised by the additional costs involved. Budget for: stamp duty (varies by property value and buyer type — use our calculator for an estimate), legal/conveyancing fees ($1,500–$3,000), building and pest inspection ($400–$800), lenders mortgage insurance if your deposit is under 20%, loan application fees (varies by lender — we negotiate to minimise these), property valuation fee, and moving costs. In total, allow for 3–5% of the purchase price in additional costs on top of your deposit.
From submitting a completed application to receiving formal approval typically takes one to three weeks, depending on the lender and the complexity of your situation. Settlement — when ownership of the property actually transfers — is usually four to six weeks after the contract is exchanged. Some lenders can move faster, especially if your application is straightforward and all documents are provided promptly. We manage this process for you and keep things moving.
Lenders typically require: proof of identity (passport or driver’s licence), proof of income (recent payslips, tax returns, or business financials if self-employed), evidence of your deposit (savings statements for at least three months), details of any other assets (investments, vehicles), details of existing debts and liabilities (credit cards, personal loans, car loans), and the signed contract of sale if you’ve already found a property. We’ll give you a precise checklist based on your situation before we submit anything.
A fixed rate locks in your interest rate for a set period — usually one to five years. Your repayments stay the same regardless of what the Reserve Bank does with the cash rate. This gives certainty but limits flexibility (extra repayments may be capped, and break costs can apply if you exit early). A variable rate moves with the market — when rates fall, your repayments fall; when they rise, they rise too. Variable loans typically offer more features like unlimited extra repayments, redraw, and offset accounts. Many borrowers choose a split loan — part fixed for certainty, part variable for flexibility.
An offset account is a transaction account linked to your home loan. The balance in it ‘offsets’ your loan balance for interest calculation purposes. If you have a $500,000 loan and $30,000 in your offset, you only pay interest on $470,000. Over a 25–30 year loan term, even a modest offset balance can save tens of thousands of dollars in interest and shave years off your loan. For most borrowers who have regular savings, an offset account is highly beneficial — though not all loan products include one.
Lenders Mortgage Insurance (LMI) is an insurance premium charged by lenders when your deposit is less than 20% of the purchase price. It protects the lender — not you — in the event you can’t repay the loan. LMI can add thousands of dollars to your loan costs (the exact amount depends on the loan size and LVR). You can avoid LMI by saving a 20% deposit, or by using a guarantor (a family member who offers their property as additional security). Some professions — doctors, lawyers, accountants — may qualify for LMI waivers from certain lenders. Talk to us and we’ll explore all your options.
A comparison rate is designed to give you a more accurate picture of a loan’s true cost by combining the interest rate with most of the fees and charges associated with the loan, expressed as a single percentage. It’s a useful guide for comparing loans, but it has limitations — it’s calculated on a standard $150,000 loan over 25 years, which doesn’t reflect most people’s actual loan size. Always look at the comparison rate alongside the headline rate when evaluating loans.
In NSW, first home buyers may be eligible for: the First Home Owner Grant ($10,000 for new homes valued up to $600,000, or up to $750,000 in some areas), stamp duty exemptions (for homes under $800,000) or concessions (for homes between $800,000 and $1,000,000), and the First Home Guarantee — a federal scheme allowing eligible buyers to purchase with as little as 5% deposit without paying LMI, with the government guaranteeing up to 15% of the loan. Eligibility conditions apply to all schemes. We’ll help you identify which ones you qualify for.
Under the First Home Super Saver Scheme (FHSS), you can make voluntary contributions to your superannuation and later withdraw them (up to $50,000) to use as a deposit on your first home. Contributions made under the scheme are taxed at 15% going in, and withdrawals are taxed at your marginal rate less a 30% offset — which for most people is significantly better than saving in a standard bank account. There are rules and limits, and you need to apply to the ATO before withdrawing. We recommend speaking with a financial adviser about whether FHSS suits your situation.
A guarantor is a third party — usually a parent or close family member — who offers the equity in their own property as additional security for your loan. This allows you to borrow more than the value of your own deposit would otherwise allow, often enabling you to avoid LMI entirely. The guarantor doesn’t need to make repayments — their property is simply used as security. If you can’t make repayments, the lender can pursue the guarantor. This is a significant commitment for both parties and should be entered into carefully, with legal advice.
An investment property is negatively geared when the costs of owning it (mortgage interest, rates, insurance, property management fees, repairs, and depreciation) exceed the rental income it generates. In Australia, this shortfall is tax-deductible against your other income — meaning you pay less income tax. Negative gearing is a common strategy among Australian property investors, particularly in high-growth markets where capital growth is expected to outweigh the cash flow deficit over time. The tax benefits are real, but the investment must still make long-term financial sense.
Interest-only (IO) repayments mean you pay only the interest component of the loan each month, without reducing the principal. This results in lower monthly repayments and maximises the tax-deductible interest, which can be attractive for negatively geared investors. However, you’re not building equity in the property, and IO periods are typically limited to five years. Principal and interest (P&I) loans reduce the loan balance over time, building equity and resulting in lower total interest paid. The right choice depends on your cash flow, tax position, and investment strategy. We’ll model both scenarios for you.
Lenders assess investment property applications slightly differently to owner-occupied purchases — they often apply a higher assessment rate (interest rate buffer) and may use a lower percentage of rental income when calculating serviceability. Your borrowing capacity for an investment loan depends on your existing debts, income, the expected rental income of the property, and the lender’s policies. Call us and we’ll give you a realistic picture across our lender panel.
Refinancing makes sense when: your current interest rate is significantly higher than what’s available in the market (even 0.5% on a $500,000 loan saves $2,500 per year), your fixed rate period is ending and you’re rolling to a higher variable rate, your financial circumstances have improved and you may qualify for a better product, you want to access equity for renovations or investment, or you want to consolidate other debts into a lower-rate loan. As part of our Active Mortgage Management approach, we review your loan every year to flag when refinancing would genuinely benefit you.
Refinancing is not free, but the savings usually outweigh the costs. Costs may include: discharge fees from your current lender ($150–$400), government fees for title transfer, application or settlement fees from the new lender, break costs if you’re exiting a fixed rate loan early (these can be substantial — always check before refinancing a fixed loan), and lenders mortgage insurance if your equity is below 20% in the new loan structure. We’ll calculate a genuine cost-benefit analysis before recommending a refinance.
Refinancing typically takes two to four weeks from application to settlement — faster than a new purchase because there’s no property exchange involved. We manage the entire process, including communicating with both your existing and new lender to ensure a seamless transition.
Conveyancing is the legal process of transferring property ownership from the seller to you. It involves reviewing the contract of sale, conducting title searches, liaising with the other party’s legal representative, and managing the settlement process. In NSW, this work can be done by either a licensed conveyancer or a solicitor. The costs are broadly similar ($1,500–$3,000 for a standard purchase). A solicitor can provide broader legal advice if complex issues arise; a conveyancer specialises specifically in property transfers. We can refer you to trusted professionals.
Settlement is the day ownership of the property legally transfers to you. On settlement day, your lender releases the loan funds, your legal representative pays the vendor’s legal representative the balance of the purchase price, and you receive the keys. In NSW, settlements are now mostly conducted electronically through the PEXA platform. You don’t need to be present — your conveyancer and lender handle it. We coordinate closely with all parties in the lead-up to settlement to make sure nothing is missed.
A building inspection assesses the structural condition of the property, identifying defects, issues with the roof, drainage, plumbing, and any safety concerns. A pest inspection looks for evidence of termites and other pest infestations. Both are strongly recommended before exchanging contracts on any property, particularly older homes in Sydney’s Hills District where timber construction is common. The cost ($400–$800 combined) is modest relative to the risk of buying a property with serious hidden defects. Never skip these inspections in a hot market.
In NSW, buyers of residential property have a five business day cooling-off period after exchange of contracts during which you can withdraw from the purchase. If you withdraw during the cooling-off period, you forfeit 0.25% of the purchase price. There is no cooling-off period for properties purchased at auction. If you’ve had a building and pest inspection and legal review done before exchange, the cooling-off period becomes less critical — but it’s still a useful safety net. Your conveyancer will advise you on how to manage this.
Exchange is when both parties sign and swap identical copies of the contract of sale. From this point, the contract is binding (subject to any cooling-off period). A deposit — typically 10% of the purchase price — is paid at exchange. Settlement is the later date — usually four to six weeks after exchange — when the remaining balance is paid and ownership officially transfers to you. Between exchange and settlement, your lender conducts its valuation, finalises the loan, and prepares the funds for release on settlement day.