According to data from the Australian Bureau of Statistics, there was a 73.2% growth in number of loans approved for first home buyers year-on-year to May 2021. This may be due to the record-low interest rates we’ve been seeing, the fact international travel is mostly off the cards leading to growing savings accounts, and/or the First Home Loan Deposit Scheme helping some young Aussies get into homes with a lower deposit.
First home buyers have a specific set of needs that sets them apart from established property owners, and as always, shopping around is a good idea to ensure you are finding a good deal that is suited to your needs. To help narrow your shortlist, Canstar assessed 92 providers based on their products and services, and recognised the ones offering Outstanding Value to first home buyers specifically.
How were the Award winners decided?
Canstar’s First Home Buyer Award uses a methodology that considers five key aspects of a first home buyer’s journey, with a different weighting applying to each depending on its importance:
- Planning for your first home (5% of overall score) – 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 (10% of overall score) – What channels for home loan applications (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 (70% of overall score) – What options does the lender offer when it comes to making repayments on its home loans? Does it offer redraw or offset facilities? And, most importantly, what fees and interest rates does it charge?
- Assistance (10% of overall score) – What support does the lender make available to its home loan customers? Does it offer online or call centre assistance? How extensive is its network of branches and mobile lenders?
- Closing your home loan (5% of overall score) – 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 have at least one branch or mobile lender in the applicable state or territory.
Bank of the Year – First Home Buyer (National)
St.George Group, comprising St.George Bank, Bank of Melbourne and BankSA has won the Bank of the Year – First Home Buyer Award for the second year running. The three brands provide 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 mainly in Victoria, and BankSA caters primarily to consumers in South Australia and the Northern Territory.
St.George Bank and Bank of Melbourne also received a 2021 Home Lender Award earlier in the year.
According to Canstar Research, St.George Group continued to offer one of the cheapest first home loans in the market across each of the profiles considered in the Award. Its products also came with many of the bells and whistles expected from more expensive loans, including offset and redraw facilities, but at an extremely competitive price. In addition, if offered excellent support for first-home-buying customers, Canstar Research noted.
Customer-Owned Institution of the Year – First Home Buyer (state and territory)
Canstar also awarded the customer-owned institutions offering Outstanding Value to customers in various states and territories. The winners in alphabetical order by state/territory name are:
New South Wales and Victoria – Hume Bank
This is the first time Hume Bank has taken out this Award. Of the products rated in the New South Wales and Victoria profiles, Hume Bank was found to offer the lowest total cost variable home loans at 80% LVR based on their average interest rate based on six months of historical data.
Northern Territory and South Australia – People’s Choice
People’s Choice retained this Award for the NT for the fifth year running and in SA for the sixth year, thanks to its competitive pricing. People’s Choice 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 is one of the 34 home loan lenders participating in the Australian Government’s First Home Loan Deposit Scheme.
Queensland – MOVE Bank
This is the second year MOVE Bank has won this Award for Queensland. The Brisbane-based lender offers many online resources for first home buyers including loan repayment and borrowing calculators, a budget planner and a series of home loan FAQs. Canstar Research also noted it offers a quick turnaround for applications and leads the state in its 80% LVR products in regards to interest rate. It also offers a strong product for 90% LVR home loans.
Western Australia – Great Southern Bank
Great Southern Bank is Australia’s largest credit union – previously known as CUA. It is the second year this institution has taken out the award for WA. Canstar Research noted Great Southern Bank had market-leading savings accounts and a wide range of support services for first home buyers online, over the phone and in person. It offers an extremely competitive product for borrowers seeking a high-LVR loan, as well as those with an 80% LVR. Great Southern Bank is one of the 34 home loan lenders participating in the Australian Government’s First Home Loan Deposit Scheme.
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