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Home Loans For Students In Melbourne

Break Free Home Loans are a leading Melbourne mortgage broker, with over 20 years of industry experience. We provide lending solutions and advice tailored to your needs. We work closely with clients as trusted advisors and are accessible to clients when needed.

Our brokers work hard at understanding our client’s unique circumstances and helping them overcome common home loan challenges. Whether you’re a first home buyer or an experienced investor, we’ll help you find the best home loan for your situation. Whether you’re self-employed and have trouble proving your income or you’re a contractor or casual worker, we offer solutions for all types of clients’ income sources.

If you’re a student looking to buy a home, you may be wondering if you can qualify for a mortgage. The good news is that there are several options available to you, even if you don’t have a lot of money saved up. Work with qualified brokers from Break Free Home Loans. Our experts can help you find a loan from the right lender with flexible repayment terms to suit your financial needs. We work with a wide range of lenders who provide home loans for students. More importantly, we can help you complete an application on your behalf that addresses all the eligibility requirements. Want to maximise your chance of loan approval? Apply with us today.

What Is A Home Loan For Students?

Home loans for students are designed to help those who are still studying finance the purchase of a property. A student home loan will usually have lower interest rates and relaxed repayment terms to make it easier for you to meet your repayments while you’re still studying. If you’re studying in university or TAFE, you may be eligible for a number of student housing loan programs.

How Much Is Possible To Borrow

How much can I borrow for a home loan as a student? The amount you can borrow for a home loan as a student will depend on your income, employment, and credit score. However, most lenders will allow you to borrow up to 85% of the home’s value. At the maximum, you can negotiate to borrow up to 90% of the property value.

However, most of the time, you’ll be able to borrow up to 70% to 85% of the property value if you’re employed and have enough savings. Things like your HECS and other debts will affect the amount you can borrow. It’s usually easier to get a home loan for students when you are not on student loans. For instance, home loans for PhD students who have their tuition settled and earn a regular income are usually quite straightforward to obtain.

Many borrowers also ask; Can international students buy a house in Australia? If you are an international student, you will also be seen as higher risk and may be asked to pay a higher deposit at 20% and 5% extra for stamp duties.

How To Get A Home Loan As A Student?

So you want to find out how to get a mortgage as a student. Applying for a home loan as a student can be a daunting task, but it doesn’t have to be. By doing your research and knowing what to expect, you can make the process much less stressful. With a little preparation, you could be on your way to owning your own home. The following are some steps you can take to maximise your chance of getting your student home loan Australia finance approved:
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Guarantor

Home loans for college students or graduate students may be seen as higher risk by lenders. But a guarantor may help you apply for your first home loan as a student. Lenders will be more inclined to approve you with a guarantor because they can take responsibility if you fail to make the repayments. This presents a risk to the guarantor because they can lose their property in the worst-case scenario.

A guarantor can be anyone from your parents or other close relatives who agrees to guarantee your mortgage using their own property as a security for the loan. With a guarantor, you can apply for a home loan without a large deposit or having to pay the Lenders Mortgage Insurance (LMI) charges.

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Scholarship

While not all lenders will consider it income, there are some lenders who will accept income you receive from scholarship. If you are receiving a scholarship, you may be provided up to thousands of dollars in income every semester, which can support your chances of approval with a lender. The types of scholarships that are likely to be approved include fellowships, university scholarships, and Commonwealth scholarships.
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Partners Income

It’s also easier to get a home loan for students if you have a partner who is earning an income. Lenders can assess the total household income instead of individual income when applying for a loan. It’s usually easier for two applicants to be approved instead of one. Having a partner or joint applicant earning a full income will increase your eligibility as a borrower. The same goes for yourself if you have a part-time job, a small business or other sources of ongoing income.

Use The First Home Loan Deposit Scheme

There are also government grants and incentives that can help you apply for student home loans. This includes the First Home Owner Grant (FHOG), First Home Loan Deposit Scheme (FHLDS), and more. They may be able to make up part or even all of your home loan deposit, stamp duty expenses and the cost of your LMI.
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Interest-Only (IO) Loan

There are also interest-only home loans for students. These have lower initial repayments than principal and interest home loans. For a period of time, usually 1-5 years, you only need to pay the interest component of the loan and not the principal borrowed. This means your repayment amounts are significantly reduced. However, your interest bill is usually higher over the life of the loan than if you’ve paid your principal and interest. You may also be asked for a bigger deposit by the lender.

Can International Students Buy a House In Melbourne?

International students can qualify for a home loan in Australia. But it’s usually more difficult to get approved for a home loan as a student on a visa. Lenders tend to see international students as higher risk customers. From having to overhaul your life and move to a new country, living a student’s lifestyle and being less likely to work more than 20 hours per week, international students are seen as less viable borrowers compared to other demographics.
However, it is still possible to qualify for a loan and get approved by a lender. One of the best ways for students to up their chances of approval is to have their parents overseas act as a guarantor of the loan or cosign the loan with a joint applicant. Other steps international students can take to maximise their chances for loan approval include:

  • Offering a higher deposit (at least 20% and an extra 5% to cover stamp duty)
  • Have a full-time working partner
  • Have good credit history in Australia
  • Demonstrate good saving habits while studying
home loans for students
best home loans for students

Accepted Visa Types

Students on the following types of visas can be accepted for a loan:

  • Student Visa (Subclass 500)
  • Skilled Recognised Graduate Visa (Subclass 476)
  • Skilled Graduate Visa (Subclass 485)
  • Skilled Regional (Provisional) Visa (Subclass 489)

You may also need clearance from the Foreign Investment Review Board (FIRB) to purchase a residential or investment property in Australia.

About LMI Waiver

LMI can be waived for first home buyers if you qualify for the First Home Loan Deposit Scheme. The scheme is designed to help eligible first home buyers shop the property market with a deposit as low as 5% without paying Lenders Mortgage Insurance. You can also avoid or reduce your LMI costs by saving a larger deposit (at least 20% of the purchase price) or using a parent guarantor to cover your loan.
the home loans for students

Is Taking Student Home Loans Worth It?

When it comes to how to get a home loan as a student and whether it’s worth it, you need to decide this based on your unique situation. Home loans for students usually come with special repayment options, such as interest-only repayments or graduate repayment plans. This can make it easier to afford your loan payments while you’re still in school.

You shouldn’t just estimate the cost of your loan, you need to carefully budget and consider your lifestyle and expenses. Can you make your repayments while still studying and working part-time? Take into account your current and future plans, and whether they will affect your ability to repay your loan. Don’t take on a loan you’ll risk defaulting on as this can mean a major hit to your income, credit score and ability to apply for finance in the future.

How To Choose The Best Home Loan For Student

Here’s what you need to know about getting a home loan as a student.

One of the first things to consider is whether you will be able to afford the monthly payments. Home loans for students usually have higher interest rates than traditional mortgages, so your payments could be higher. You’ll also need to factor in the cost of property taxes and insurance.

Another thing to think about is how long you’ll need the loan for. Home loans for students typically have shorter terms than traditional mortgages, so you’ll need to make sure you can afford the payments when the loan is due.

If you’re not sure whether you can afford a home loan as a student, talk to a financial advisor. They can help you understand your options and make the best decision for your situation.

the best home loans for students

Have Any Questions?

If you’re looking for a home loan as a student, be sure to shop around and compare offers from multiple lenders. And remember, the interest rate isn’t the only thing to consider when choosing a loan – be sure to compare features like repayment options and fees as well. Our brokers are more than ready to help you on your loan application. We understand what it takes to get a home loan for student applicants. Discuss your needs with us today.

Frequently Asked Questions

These are some of our most frequently asked questions:

Can Students Buy A House In Australia?

Many customers ask; Can I get a home loan if I’m a student? Yes, you can apply for a home loan if you’re a student. However, you may need a cosigner if you don’t have enough income or equity to qualify for the loan on your own.

When applying for a home loan as a student, you’ll need to provide proof of income, employment, and assets. You’ll also need to have a good credit score to qualify for a loan.

What Is A Home Loan For Students?

Home loans for students are specially designed mortgage products for students who want to purchase a property. Home loans for students typically have shorter terms and lower interest rates than traditional mortgages, making them more affordable for borrowers.

The interest rate for a home loan as a student will depend on your credit score and the type of loan you’re applying for. However, most lenders offer competitive rates for student loans.

How To Get A Mortgage As A Student?

The process of applying for a home loan as a student is similar to the process of applying for any other type of mortgage. You’ll need to fill out an application and provide financial information, such as your income and debts.

You may also need to provide additional information, such as your school transcripts or proof of enrollment. Be sure to ask your lender what documentation they require before you begin the application process.

If you’re approved for a home loan, you’ll need to make a down payment. The size of your down payment will depend on the type of mortgage you’re getting and the lender’s requirements. In some cases, you may be able to get a mortgage with no down payment at all.

Contact our team

We love to hear from each and every one of you. Please feel free to reach out to us today!