She faces renewed uncertainty because rising interest rates and tough loan servicing rules imposed by the prudential regulator are making it even harder for her application to be approved.
The physical education teacher says she doesn’t know whether her deposit will be enough, what her monthly repayment will be or whether she will be refused again if rates continue to rise. “It has just been stressful,” she says.O’Beirne has already purchased a block of land in Diggers Rest, a suburb on the north-west outskirts of Melbourne, and needs the loan to press ahead with the construction of a four-bedroom home.
Daniel Senia, managing director of First-Place Building Co, which specialises in new houses for first home buyers, says the recent economic volatility and high costs mean this generation of first home buyers is likely to be older and married with children. In the past 12 months, the number of them with at least one child has increased to more than 60 per cent compared with about 45 per cent last year.
Find a lower rate. Banks stress test finance on the rate being applied plus an additional 3 percentage points. “The lower your rate, the more you are likely to be able to borrow,” says Tindall. For example, there’s nearly a full percentage point difference between the big four owner-occupier loans and one of the lowest from another lender of about 4.69 per cent.