Despite the overall uncertainty facing the Australian economy and its property market – as well as stricter lending policies among some banks – some younger buyers remain optimistic about their home ownership prospects.
In fact, home loan enquiries among first home buyers are reported to have spiked in June, despite record declines in overall lending volumes.
In particular, the First Home Loan Deposit Scheme has been a big draw for some eligible first home buyers with a deposit as low as 5%. But with a limited number of places on the scheme up for grabs and only some lenders participating, buyers could benefit from shopping around a broad selection of lenders based on the range of factors relevant to them.
To help with that, Canstar has assessed 92 home loan providers from our database, based on the products and services they offer to customers buying their first home. Read on to find out how lenders were assessed, and which banks and customer-owned institutions won our First Home Buyer Award this year.
How were this year’s winners decided?
Canstar’s First Home Buyer Award is based on a methodology which considers five key aspects of a customer’s journey through the life of their first home loan, and how the provider supports them along the way. This includes:
- Planning for your first home – What budgeting tools, research facilities or savings accounts does the lender offer to help a customer save for their house deposit?
- Applying for and settling your first home loan – What channels for home loan applications (e.g. in-branch, over the phone, online etc.) does the lender offer? What guarantee and/or deposit options does it offer to borrowers?
- Managing your home loan – What options does the lender offer when it comes to making repayments on its home loans? Does it offer redraw or offset facilities? And, importantly, what fees and interest rates does it charge?
- Getting assistance with your home loan – What support does the lender make available to its home loan customers? Does it offer online or call centre assistance? How widespread is its network of branches and mobile lenders?
- Closing your home loan – How easy does the lender make it to discharge its home loans, and how much does it cost?
To be eligible for consideration in the First Home Buyer Award, a provider must offer variable and three-year fixed home loan products available at both 80% and 90% loan-to-value ratios (LVR), and a savings account. For the state and territory-based awards, institutions must also have brick-and-mortar branches in the applicable state or territory.
This year’s Bank of the Year – First Home Buyer (National Award)
St. George, Bank of Melbourne, and BankSA have won this year’s Bank of the Year – First Home Buyer Award, off the back of a markedly improved home loan offering, and a market-leading performance when it came to home loan management, according to Canstar Research.
The three brands provide consumers a very similar product and service offering, but operate in separate states – St. George primarily services customers in New South Wales and Queensland, Bank of Melbourne operates in Victoria, and BankSA caters to consumers in South Australia and the Northern Territory.
All three providers also picked up Outstanding Value – Home Lender and Outstanding Value – Fixed Home Lender Awards earlier in the year, which demonstrates the value their home loans offer to consumers. At the time of writing, their 3-year Fixed Rate Home Loan offers an interest rate of 2.24% p.a. (with a comparison rate of 3.38% p.a.)
This year’s Customer-Owned Institution of the Year – First Home Buyer winners (state and territory Awards)
Read on to find out which providers won in the various states and territories Canstar assessed this year. The results feature a mix of returning and new winners, and are sorted alphabetically by state/territory name.
New South Wales – Newcastle Permanent
Newcastle Permanent has won the Customer-Owned Institution of the Year – First Home Buyer Award for NSW for the sixth year in a row.
The Newcastle-based customer-owned bank says it has two home loans specifically designed for first home buyers. Its Real Deal Home Loan offers borrowers the option of splitting their loan between fixed and variable rates, while its Premium Plus Package Fixed Home Loan allows additional repayments of up to $25,000 a year.
Newcastle Permanent has several online calculators available to first home buyers, that could help them figure out their borrowing power and how much their home loan repayments will be. It also has a series of articles and educational resources aimed at first home buyers on its website.
At the time of writing, Newcastle Permanent’s 3-Year Premium Plus Package Fixed Rate Special offers an interest rate of 2.39% p.a. (with a comparison rate of 3.66%) to borrowers with an LVR of up to 80%.
Northern Territory, South Australia, & Victoria – People’s Choice Credit Union
People’s Choice Credit Union has held onto the Customer-Owned Institution of the Year – First Home Buyer Award in the Northern Territory and Victoria for a fourth consecutive year, and won the Award in South Australia for a fifth consecutive year.
Canstar Research said the Adelaide-based credit union beat the market across the board in the Northern Territory, and performed similarly strongly across planning and managing a home loan in South Australia and Victoria.
People’s Choice Credit Union offers an online information hub for first home buyers, along with educational resources like a glossary of home loan terms and answers to a series of FAQs that first home buyers may have. People’s Choice Credit Union is one of the 27 home loan lenders participating in the Australian Government’s First Home Loan Deposit Scheme.
At the time of writing, People’s Choice Credit Union’s Fixed Home Loan Package offers an interest rate of 2.29% p.a. (with a comparison rate of 3.72%).
Queensland – MOVE Bank
A new face among this year’s winners, MOVE Bank has won the Customer-Owned Institution of the Year – First Home Buyer Award for Queensland in 2020. The Brisbane-based and member-owned credit union had a market-leading performance when it came to planning for and managing a home loan, and was among the market leaders on cost, according to Canstar Research.
MOVE Bank offers a plethora of online resources to first home buyers, including a budget planner, loan repayment and borrowing power calculators, and a series of home loan FAQs that first home buyers may find helpful.
At the time of writing, MOVE Bank’s 3-year Fixed Rate Owner-occupied home loan offers an interest rate of 2.19% p.a. (with a comparison rate of 3.15% p.a.).
Western Australia – CUA
Australia’s largest credit union, CUA, has won the Customer-Owned Institution of the Year – First Home Buyer Award for WA. This is the first year that the Brisbane-based credit union has won one of Canstar’s First Home Buyer Awards.
CUA led the market on planning for and managing a home loan, and its website contains an information hub and step-by-step guide for first home buyers, as well as a guide to the First Home Loan Deposit Scheme, in which CUA is a participating provider.
At the time of writing, CUA’s Fixed Rate 3-Year – Principal and Interest home loan offers an interest rate of 2.49% p.a. (with a comparison rate of 3.99% p.a.).
For more information on how the results of Canstar’s 2020 First Home Buyer Award were calculated, you can read the methodology.