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Planning to become a property owner? Understanding how mortgages work in Australia is crucial to help you purchase a property.

According to the Australian Bureau of Statistics, the national mean price of Australian dwellings surpassed the $1 million mark in the 1^st quarter of 2025.

In this article, we will show you how mortgages can help you own a property despite the rising costs of residential dwellings in Australia.

What is a Mortgage

Typically, a mortgage is a type of loan that requires collateral to provide security to the lender. A mortgage is used to finance the purchase of your property, so you do not have to pay its full amount.

Then as a borrower, your repayments are scheduled in a timely manner which includes paying the principal amount plus the interest.

How Mortgages Work

When taking out a mortgage, most lenders in Australia will require a 20% deposit (based on the value of the property) from the borrower. The remaining 80% will be covered by the lender, then the lender will be listed as a mortgagee on the title deed of the property—until the borrower fully repays the loan or the loan is refinanced.

If you are eligible, some lenders offer low deposit amounts (typically between 7 to 10%), and the borrower needs to pay for Lender’s Mortgage Insurance (LMI) which may be offered a higher interest rate.

Want to know how much you can borrow? Our mortgage calculators can help you.

Types of Mortgages in Australia

In Australia, there are three main types of mortgages that are available to borrowers. The key to a successful mortgage is to understand their differences and match them with your financial situation and needs.

Fixed-rate Mortgage

Ideal for borrowers who want to have certainty about their repayments and budget, this type of mortgage has a ‘locked in’ rate of interest for a set period. Typically, between one and five years, your interest rate remains constant despite the lender’s rate changes. Your repayment will be the same during the fixed-rate term.

However, you will not be able to take advantage when the interest rate goes down. This loan will typically not allow you to make extra repayments—and if extra repayments are permitted—the total amount of extra repayments made is capped annually. These products generally attract higher fees for breaking the fixed loan agreement within the fixed-rate term.

Variable rate Mortgage

On the other hand, the interest rate for a variable rate mortgage changes over the life of the loan. When the interest rate put in place by your lender fluctuates, your interest rate and repayments will generally adjust, accordingly.

With this type of mortgage, you can add features such as making extra repayments, accessing redraw or even offsetting your mortgage balance.

Split Mortgage

Another option is to have a ‘split’ mortgage. Having multiple accounts between fixed-rate and variable rate loans will allow you to mitigate the disadvantages and reap the rewards of both.

What are the Requirements for a Mortgage in Australia

To secure a mortgage, you need to meet several requirements to showcase your ability to repay the loan. Below are some factors that the lenders will use to assess your financial situation:

Income and employment stability – being a full-time employee or having a long-term contract will signify your ability to pay the loan. Typically, lenders will request your payslips, employment contracts, and tax returns to ensure the stability of your income.

Credit history – your credit score and history will play a crucial role when applying for mortgage loans. Lenders will check how reliable you are in paying your past debts such as credit cards, personal loans and mortgages.

Savings for deposit – most lenders will require 20% of the property value as a deposit plus costs that you need to pay outright. If you don’t have this amount available, don’t worry, there are other options available for low deposit loans.

Expenses and debt – aside from your income stability, lenders will also check your debt-to-income ratio. This shows your lender that you have enough disposable income to pay your mortgage after covering your personal financial obligations.

Identification – standard identification documents, such as your passport and driver’s license, will be required to comply with anti-money laundering regulations.

Citizenship/residency – to secure a loan, generally, you need to be an Australian citizen or a permanent resident in Australia. However, there are non-resident loans available in the market that require additional requirements.

Where can I get a Mortgage in Australia

Below are several options for obtaining a mortgage in Australia.

Mortgage brokers

Major banks

Smaller banks and credit unions

Non-bank lenders

Here is a comparison of the options to help you decide which option to choose.

	Mortgage Brokers	Major Banks	Smaller Banks & Credit Unions	Non-Bank Lenders
Loan Product Access	Has a wide range of loan options from multiple lenders.	Limited to the bank’s loan products.	Limited to their loan products.	Limited to their specialised loan products.
Expert Advice	Tailored and unbiased financial solution advice to best fit your needs.	Their advice is focused on their loan products.	Their advice is focused on their loan products.	Their advice is focused on their loan products.
Time & Effort Saved	Saves you significant time in research and paperwork.	Requires extensive research for comparison and individual application.	Requires extensive research for comparison and individual application.	Requires extensive research for comparison and individual application.
Cost to Borrower	Typically, no cost to the borrower as the commissions are paid by the lenders.	Normally has bank fees.	Normally has bank fees.	Normally has lender fees.
Negotiation & Savings	Has a stronger ability to negotiate for better terms—due to deeper business volume.	Will communicate directly with the bank. Less flexibility in terms.	Will communicate directly. Less flexibility in terms.	Will communicate directly. Less flexibility in terms.

Need Help in Getting Mortgage? Talk to Cresco

Need expert mortgage advice? At Cresco Finance, we have been providing expert and tailored mortgage advice to Australians for years. Take advantage of our simple and seamless process for your next mortgage loan application.

Get in touch with us here. Our team will be happy to assist you.

Frequently Asked Questions

How much does a mortgage cost in Australia?

Determining the interest rate for your loan can be highly individual. There are several factors that might affect the rates and their borrowing power. You may use our mortgage calculators to give you an idea of the interest rate and how much you can borrow.

Is it hard to get a mortgage in Australia?

There are several ways to obtain a mortgage loan in Australia. If you need tailored mortgage advice and help with the application, then consider working with a mortgage broker. With a mortgage broker, you can:

Access a wide range of mortgage options

Have an expert advice base on your financial situation and needs

Save time on paperwork

Save money on fees

How long will I pay my mortgage?

Typically, mortgage loans are long-term loans between 20 to 30 years due to the amount of the property and have affordable repayments. While there are short-term loans, the interest rate could be steeper.

Author: Charlie Badaoui – Managing Partner

Cresco

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Self-employed? Do not let your lack of financial documents stop you from purchasing, renovating, or refinancing a property. Low Doc Loans help self-employed and small business borrowers to take out a loan with minimal requirements.

Low Doc Loans Explained

Low documentation loans (or low doc loans) are a type of loan designed to allow borrowers with limited financial records to borrow with minimal requirements. Typically, these borrowers are self-employed, small business owners, and investors who have not yet filed their tax returns or failed to meet the full doc loan requirements.

Note: Given the flexibility of requirements for low doc loans, lenders view this loan as high risk. Therefore, low doc loans tend to have higher interest rates, risk fees, and may include terms that restrict borrowers.

It is best to talk to an expert mortgage broker to know your options.

Low Doc Loans vs Traditional Home Loans vs Mid Doc Loans

Confused on whether you should get a low doc loan, traditional home loan, or a mid-doc loan? Typically, it comes down to your ability to provide financial documents.

Traditional home loans or full doc loans generally have better interest rates and terms—if you can comply with the requirements. If not, you may need to consider low doc loans or mid-doc loans.

Below is a comprehensive summary of their differences.

	Traditional Home Loans (Full Doc Loans)	Low Doc Loans	Mid-Doc Loans
Income Verification	Extensive, typically 1 to 2 years’ financial records (payslips, tax returns, employment contracts, etc.)	Reduced (income declaration form with self-verification and other supporting documents)	Mid-Doc (Recent BAS, ABN, or business bank statements)
Target Borrower	PAYG employees, individuals with stable income, or self-employed applicants with lodged tax returns that are within lending guidelines	Self-employed, contractors, freelancers, or small business owners	Self-employed, contractors, freelancers, or small business owners
Perceived Lender Risk	Low	High	High
Interest Rates	Lowest rate	Depends on the application but is generally higher than traditional	Typically, lower than low doc loan
Fees	Standard home loan fees	Higher and may include risk fees	Higher and may include risk fees
Availability	Available from directly from lenders, other institutions, or mortgage brokers	Typically, you can apply directly to lenders or mortgage brokers	Typically, you can apply directly to lenders or mortgage brokers

Key Advantages of Low Doc Loans

While it is generally considered that low doc loans have higher interest rates, several factors make this ideal for certain borrowers.

Loan accessibility for self-employed and non-traditional income workers – low doc loans make it possible for borrowers to purchase and own properties with less income verification documents.

Flexibility with documentation – when your recent financial documents do not reflect your current financial status, low doc loans allow you to submit other documents that prove your income.

Quicker approval process – the low documentation requirements sometimes allow for a faster approval process. As a borrower, this gives you a quicker turnaround time to secure your property.

Tailored financial solutions to your financial situation – generally, lenders expect low doc loan borrowers to have complex financial situations. They tend to provide financial loan solutions that consider your overall financial health and repayment capacity.

Who is qualified for Low Doc Loans?

Eligibility requirements for low doc loans may vary from lender to lender. Typically, these borrowers are ABN holders who are registered for GST.

Below are the common borrowers who are looking for low doc loans:

Self-employed, contractors, and freelancers – having a history of being a PAYG employee in the same industry will have a higher chance of getting loan approval.

Small business owners – new businesses may experience income fluctuations. Inconsistency in income can make it difficult for you to get approved for a traditional home loan.

Low credit score borrowers – for borrowers who do not have a good financial standing. Finding an accountant who will be willing to sign off on your loan through an account declaration might give you a chance of approval.

What are the requirements for Low Doc Loans?

Your lender may require any of the following documents to prove your eligibility:

Proof of identification, Proof of ABN and GST registration, Recent personal tax return and notice of assessment, PAYG payment summary, Business activity statement (BAS), Business bank account statements, Financial statements executed by an accountant

Looking for Low Doc Loans? Talk to Cresco.

Need help with a low doc loan? At Cresco Finance, we provide expert advice and support to Australians seeking finance using low doc loans.

Our lender network and years of experience allow us to provide tailored financial solutions to our clients.

You may take advantage of our obligation-free call to find out more about how we can help you. Send us a message.

Author: Charlie Badaoui – Managing Partner

Cresco

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1. Set Clear Goals

The first step to successful money saving is setting clear, achievable goals. Whether it’s saving a certain amount of money each month, paying off debt, or building an emergency fund, having specific goals will give you direction and motivation. Take the time to identify your short-term and long-term financial objectives, and break them down into manageable steps.

2. Create a Budget

A budget is your roadmap to financial success. By tracking your income and expenses, you can identify areas where you can cut back and save more. Start by listing all your sources of income and then categorize your expenses, such as housing, transportation, groceries, entertainment, and savings. Be sure to allocate a portion of your income to savings each month and stick to your budget as closely as possible.

3. Cut Unnecessary Expenses

Trimming unnecessary expenses is one of the most effective ways to save money. Take a close look at your spending habits and identify areas where you can cut back. This could include dining out less often, canceling unused subscriptions, shopping for deals and discounts, or finding cheaper alternatives for everyday items. Small changes can add up to significant savings over time.

4. Automate Your Savings

Automating your savings is a simple yet powerful way to save money consistently. Set up automatic transfers from your checking account to your savings account each month. This way, you won’t even have to think about saving – it will happen automatically. You can also automate contributions to retirement accounts, such as a 401(k) or IRA, to ensure you’re saving for the future.

5. Pay Yourself First

Make saving a priority by paying yourself first. Instead of waiting until the end of the month to save whatever is left over, treat savings as a non-negotiable expense. Set aside a portion of your income for savings as soon as you receive it, before allocating funds to other expenses. This ensures that saving becomes a regular habit and helps you avoid the temptation to spend money impulsively.

6. Track Your Progress

Regularly monitor your progress towards your savings goals to stay motivated and on track. Use tools like budgeting apps or spreadsheets to track your income, expenses, and savings over time. Celebrate milestones along the way, whether it’s reaching a savings target or paying off a debt. Seeing your progress firsthand can inspire you to stay committed to your saving goals.

7. Stay Flexible

Finally, remember that saving money is a journey, not a destination. Be flexible and willing to adjust your goals and strategies as needed. Life is unpredictable, and financial priorities may change over time. By staying adaptable and open-minded, you can navigate any challenges that come your way and continue on the path to financial freedom.

In conclusion, mastering the art of money saving requires discipline, patience, and determination. By setting clear goals, creating a budget, cutting unnecessary expenses, automating your savings, paying yourself first, tracking your progress, and staying flexible, you can build a solid financial foundation and achieve your dreams. Start implementing these tips today and take control of your financial future!

Tailored Solutions for Every Borrower

At Cresco Finance, we believe in the power of personalized service. We understand that every borrower is unique, with their own set of circumstances and aspirations. That’s why we take the time to listen to your needs, preferences, and financial situation before recommending any mortgage products. Whether you’re a first-time buyer, a seasoned investor, or looking to refinance your existing loan, we’ll work tirelessly to find the perfect solution for you.

Expert Guidance Every Step of the Way

Securing a mortgage is one of the most significant financial decisions you’ll ever make. That’s why it’s crucial to have an experienced professional by your side throughout the process. Our team of mortgage experts boasts years of industry experience and in-depth knowledge of the Australian market. From pre-approval to settlement and beyond, we’ll be there to offer guidance, support, and advice whenever you need it.

Streamlined Application Process

We understand that time is of the essence when it comes to securing a mortgage. That’s why we’ve streamlined our application process to make it as efficient and hassle-free as possible. With access to cutting-edge technology and industry-leading lenders, we can help you get pre-approved quickly, allowing you to shop for your dream home with confidence.

Ongoing Support and Advice

Our commitment to your financial well-being doesn’t end once you’ve secured a mortgage. We believe in building long-lasting relationships with our clients, providing ongoing support and advice throughout the life of your loan. Whether you have questions about your repayment schedule, are considering refinancing options, or simply want to explore ways to pay off your mortgage sooner, we’re always here to help.

Your Trusted Partner in the Australian Mortgage Market

In a rapidly changing real estate landscape, having a trusted partner by your side can make all the difference. At [Brokerage Name], we’re dedicated to helping you navigate the complexities of the Australian mortgage market with confidence and peace of mind. With our personalized service, expert guidance, and unwavering commitment to your success, you can trust us to help you achieve your homeownership goals. Contact us today to learn more about how we can help you turn your Australian dream into a reality.

Choosing the Right Mortgage

With so many options available, selecting the right mortgage can seem daunting. Our experienced mortgage brokers are here to simplify the process for you. By assessing your financial situation, goals, and preferences, we can provide personalized recommendations tailored to your needs. Whether you’re looking for a competitive interest rate, flexible repayment options, or specialized loan features, we’ll help you find the perfect fit.

Navigating the Application Process

Once you’ve chosen a mortgage product, the next step is navigating the application process. From gathering documentation to completing paperwork and liaising with lenders, the process can be time-consuming and complex. Our dedicated team of mortgage brokers will guide you through each step, ensuring a smooth and stress-free experience. We’ll handle the paperwork, negotiate with lenders on your behalf, and keep you informed every step of the way.

Securing Pre-Approval

Before you start house hunting, securing pre-approval for your mortgage is essential. Pre-approval gives you a clear understanding of your borrowing capacity, allowing you to search for properties within your budget with confidence. Our mortgage brokers will assist you in obtaining pre-approval quickly and efficiently, empowering you to make informed decisions in a competitive property market.

Post-Settlement Support

Our commitment to your homeownership journey doesn’t end at settlement. We provide ongoing support and assistance to ensure your mortgage remains suitable for your evolving needs. Whether you’re considering refinancing, making additional repayments, or accessing equity for renovations or investments, our team is here to help you maximize the benefits of homeownership.

Why Choose Us?

As a leading mortgage broker in Australia, we prioritize customer satisfaction and transparency in everything we do. Our team of experienced brokers has in-depth knowledge of the Australian mortgage market and a proven track record of helping clients achieve their homeownership goals. From personalized advice and tailored solutions to exceptional customer service, we’re dedicated to exceeding your expectations every step of the way.

Get Started Today

Ready to take the next step towards homeownership? Contact us today to schedule a consultation with one of our experienced mortgage brokers. Whether you’re a first-time buyer, refinancing an existing loan, or investing in property, we’re here to help you navigate the Australian mortgage landscape with confidence. Let us help you turn your homeownership dreams into reality.