12 expert tips on how to get approved for a home loan in Canberra
Buying a home is a big step, but having the right strategy for how to get approved for a home loan is key. With Canberra’s strong economy and high demand, a solid plan can help you navigate changing prices and lender requirements.
Our experienced mortgage brokers at Loan Market Canberra are here to help develop a suitable strategy for home loan approval. From selecting the right loan products to improving your loan eligibility, we guide you through every step of the way.
Whether you're a first-home buyer or an investor, these 12 expert tips will help you boost your approval chances to secure your dream home in Canberra.
12 tips to get approved for a home loan
Getting approved for a home loan in Canberra requires more than just a good credit score. Lenders assess your financial position, employment stability, and ability to cover both upfront costs and ongoing costs.
By planning ahead and making smart financial decisions, you can improve your chances of formal approval. Here are 12 practical tips to help you increase your chances of securing a home loan.
#1 Check and improve your credit score
Your credit score is one of the biggest factors lenders assess during the loan application process. A high score can increase your loan eligibility and help secure competitive interest rates. You may be able to improve it by paying off outstanding credit card debt, making timely credit card bills, and limiting new applications for credit before applying.
#2 Save for a strong deposit
A larger house deposit reduces lender risk and improves your approval chances. While a minimum deposit of 5% may be allowed, aiming for 20% of the purchase price helps you avoid Lenders Mortgage Insurance (LMI). Government incentives like stamp duty concessions can assist in reaching your deposit goal.
#3 Get pre-approval before house hunting
A loan pre-approval gives you a clear price range for your property search and can make you a more attractive buyer. It signals to real estate agents and sellers that you’re financially prepared. Pre-approval letters typically last for 3-6 months and can help streamline the buying process.
#4 Reduce existing debts and monthly expenses
High debt levels, including personal loans, credit card balances, and other monthly living expenses, can reduce your borrowing capacity. Lenders look at your debt-to-income ratio to assess whether you can manage regular home loan repayments. Paying down existing debts before applying can strengthen your loan application.
#5 Choose the right loan type for your situation
Selecting a suitable loan type depends on your financial goals and lifestyle. A fixed-rate loan provides stability in monthly repayments, while a variable home loan offers flexibility with potential savings. Interest-only loans may suit investors, while low-doc loans can help self-employed borrowers.
#6 Organise your loan documents in advance
Gathering key loan documents early prevents delays in the loan application process. Lenders typically require proof of income, bank statements, and a contract of sale if you’ve found a property. Submitting complete paperwork can speed up formal loan approval.
#7 Factor in upfront and ongoing costs
Beyond the purchase price, you’ll need to cover upfront costs like stamp duty, conveyancing costs, building inspections, and pest inspections. Ongoing costs include loan fees, regular repayments, and home maintenance. Budgeting for these expenses helps ensure financial security throughout your buying journey.
#8 Demonstrate stable employment and career growth
Lenders favor borrowers with a stable job and steady proof of income. If you’re planning to apply for a home loan, avoid switching jobs, reducing work hours, or changing industries - or speak to your broker before you do. Career progression and pay increases can improve your financial position and help you qualify for a higher loan amount.
#9 Build a solid savings history
A strong savings record demonstrates financial responsibility and reassures lenders of your ability to make loan repayments. Aim to save consistently over 3-6 months, keeping funds in a dedicated account. A disciplined savings habit can also help cover extra costs like break costs, application fees or unexpected home repairs.
#10 Consider government grants and assistance
Canberra offers several government grants and programs to support first-home buyers and low-income borrowers. Duty exemptions and transfer duty concessions can reduce upfront costs. Checking eligibility criteria for these programs can help make homeownership more affordable.
#11 Cut back on unnecessary spending
Lenders assess your monthly expenses to help determine whether you can handle regular repayments. Reducing non-essential spending, such as dining out or subscriptions, can improve your financial circumstances. A lower spending pattern in the months leading up to your application can positively impact your loan eligibility.
#12 Work with a mortgage broker for expert advice
An experienced mortgage broker can help compare loan options, meet lending criteria, and secure favourable terms. They can also guide you through the loan application process, helping ensure all loan offer documents and mortgage documents are in order. Brokers simplify the loan approval process, which can increase your chances of approval.
By following these 12 expert tips, you’ll be in a stronger position to secure a home loan and confidently enter Canberra’s property market.
Frequently asked questions (FAQs)
How can I get approved for a loan?
To improve your chances, maintain a strong credit score, reduce credit card debt, save for a house deposit, and help ensure a stable income. Seeking expert advice from a mortgage broker can also help.
How long does home loan approval take in Canberra?
The loan approval process depends on the lender, your financial details, and how quickly you submit all loan documents.
What upfront costs should I prepare for when buying a home?
Aside from your house deposit, you’ll need to cover stamp duty, building inspections, pest inspections, legal advice, and potential application fees. These upfront costs can add up, so it’s essential to budget accordingly.
Can I buy a house in Canberra with a 5% deposit?
Yes, some lenders accept a minimum deposit of 5%, but you may need to pay Lenders Mortgage Insurance (LMI). Government programs like the First Home Guarantee can help eligible buyers get in with a lower deposit.
How much deposit do I need to buy a house in Canberra?
A 20% deposit is ideal, but some lenders allow low-deposit loans with as little as 5-10%. A larger deposit can improve your loan eligibility and help you secure favourable terms.
What salary do you need for a $500,000 mortgage?
Most lenders require a stable income to cover monthly repayments. A salary of around $90,000–$100,000, depending on your monthly living expenses and debts, is recommended.
Final thoughts
Buying a home is an exciting milestone, and knowing how to improve your chances of being approved for a home loan can make the process smoother. With the right strategy — maintaining a strong credit score, saving a solid house deposit, and exploring loan options — you can boost your chances of approval.
Whether you're a first-home buyer or an investor, expert guidance can make a big difference. Our mortgage brokers are here to help with tailored solutions and access to a wide range of lenders. Book a free consultation today at Loan Market Canberra and take the next step toward homeownership!