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Improving your chances for home loan approval

Improving your chances for home loan approval

When applying for a home loan, your income and expenditure, as well as your assets and debts, all play a role. So does your saving and credit history. Here’s how to improve your chances of approval.

Improving your chances for home loan approval

Structured Saving

Many of us like to think we’re good savers, but the reality is, when it comes time to apply for a home loan, lenders will look for evidence of a healthy savings record.

That means that if you live week to week, it might be time to open a savings account and start growing a nest egg. Having a sound record of being able to save (even small regular amounts) gives lenders confidence you’ll be able to meet your regular repayments over the life of the loan. You are demonstrating that you’re able to afford your commitments without a significant down-grade in your lifestyle.

Even if you’ve already got a substantial deposit saved, or are planning on getting a bit of help from mum and dad, having proof of your savings prowess goes a long way. Open an account and give it a name like “Nest fund” to keep yourself motivated, and start making regular contributions. A great tip is to set up a scheduled payment in online banking each pay period, to avoid temptation.

Getting help from mum and dad?

Find out more about our Family Pledge Loan

Bonus Saver

Bonus interest 0.50 % p.a.
Calculated daily, paid monthly
Bonus Saver rewards you for your good saving habits. Just make at least one deposit in a calendar month, and no withdrawals to be rewarded with bonus interest. Too easy.

Budget, baby!

Another thing that will make a lender smile when you’re applying for a home loan is being able to show that you’re able to set up and stick to a regular budget. Again, this gives lenders confidence that you’ll be able to prioritise when it comes to your money, and are good at meeting your commitments. Find out how to set up your own personal budget below.

Set up a budget

 

1. Be realistic

Don’t be too hard on yourself. Leave yourself money for living, or you’ll be tempted to go off-road. Try and be as comprehensive as you can, taking into account all the little things that can sometimes be forgotten. Think maintenance, think irregular and big once-yearly payments, and account for emergencies.

 

2. Have discipline

OK, leaving yourself some money to live on doesn’t mean that adding a budget line item for monthly shopping blow-outs! Check in with your budget regularly to see how you’re tracking, and be honest – you’re working towards a hard-earned, and worthy goal, here!

Savings Goal Calculator

3. Be flexible

Look, life happens. We get it. Lenders will get it. However, if you encounter the unexpected, it won’t do if you have to abandon your budget completely to cope. Budgeting a small amount each pay period for a rainy-day, or emergency fund is always a good idea.

 

Tackle your debt

OK, so you should also consider your history with credit to give yourself the best chance of securing a home loan.

If you’re swimming in debt, credit card and otherwise, it may help to consider a single loan to consolidate all your debts. This way, you’ll only be paying one repayment, with one interest rate (often lower) and one set of fees, each month. You’ll be able to really focus on reducing your debt, and if you can eliminate your debt altogether, so much the better.

Something worth knowing – lenders take into account the credit limits on your cards, even though they’re not technically debt. This is because lenders are trying to establish your total potential ‘risk’ exposure. If you’re thinking of applying for a loan, you may want to consider reducing your limits, or cutting down on the amount of credit cards you have.

Compare Home Loans

Compare 5 products
Ultimate Home Loan
Our ultimate in loans. Our Ultimate Home Loan offers the flexibility of fixed or variable rate, or a mixture of both. What's more, it features a linked offset account and unlimited free online redraws.
Great Rate Home Loan
Our simple, low rate loan that’s perfect if you’re after great value and no ongoing fees. Our Great Rate loan lives up to its name and offers flexible repayment and loan term options.
Line of Credit
Our Line of Credit helps you make the most of the equity in your home. Great if you’re thinking about renovating, investing, or just want more flexibility.
Ultimate Investment Home Loan
Our Ultimate Investment loan combines great value with a range of extra products designed to make investing easier.
Great Rate Investment Home Loan
With low-interest rates and no monthly or annual fees, we've made investment simple.
Interest Rate 1.69 % p.a.
Comparison rate 3.72 %^ p.a.
~1 year fixed, owner occupied, principal and interest
Interest rate 1.69 % p.a.
Comparison rate 3.49 %^ p.a.
~1 year fixed, owner occupied, principal and interest
Interest rate 4.00 % p.a.
Ultimate Line of Credit home loan base rate
Interest rate 2.19 % p.a.
Comparison rate 4.10 %^ p.a.
~1 year fixed, principal and interest
Interest rate 2.69 % p.a.
Comparison rate 3.51 %^ p.a.
~5 year fixed, principal and interest
Key Features
Great if you want a packaged home loan with a low rate and added benefits.
Key Features
Great if you want a low-rate no-frills home loan.
Key Features
Great if you want a continuous credit facility to access the equity in your home.
Key Features
Great if you want a great value packaged loan to invest in property.
Key Features
Great if you want a simple, no-nonsense investment loan with competitive rates.
Interest only available
Fixed rates available
Minimum deposit required (without requiring mortgage insurance or a Family Pledge)
20% of purchase price (plus costs)
Maximum loan term
30 years
Parental guarantee available
Property location
NSW, ACT & QLD
Multiple offset accounts
Yes. Available once loan reverts to a variable interest rate.
Free redraw online
Additional repayments
Split loan option
Can be used for land & construction (variable rates only)
Can be used for refinance
Fast refi
Available if self employed
Repayment holiday
Ongoing fee
$395 p.a. Package fee
Interest only available
Fixed rates available
Minimum deposit required (without requiring mortgage insurance or a Family Pledge)
20% of purchase price (plus costs)
Maximum loan term
30 years
Parental guarantee available
Property location
NSW, ACT & QLD
Multiple offset accounts
Free redraw online
Additional repayments
Split loan option
Can be used for land & construction (variable rates only)
Can be used for refinance
Fast refi
Available if self employed
Repayment holiday
Ongoing fee
Interest only available
Fixed rates available
Minimum deposit required (without requiring mortgage insurance or a Family Pledge)
20%-25% dependent on security taken
Maximum loan term
N/A
Parental guarantee available
Property location
NSW, ACT & QLD
Multiple offset accounts
Free redraw online
Additional repayments
Split loan option
Can be used for land & construction (variable rates only)
Can be used for refinance
Fast refi
Available if self employed
Repayment holiday
Ongoing fee
$10 per month
Interest only available
Fixed rates available
Minimum deposit required (without requiring mortgage insurance or a Family Pledge)
20% of purchase price (plus costs)
Maximum loan term
30 years
Parental guarantee available
Property location
NSW, ACT & QLD
Multiple offset accounts
Yes. Available once loan reverts to a variable interest rate.
Free redraw online
Additional repayments
Split loan option
Can be used for land & construction (variable rates only)
Can be used for refinance
Fast refi
Available if self employed
Repayment holiday
Ongoing fee
$395 p.a. Package fee
Interest only available
Fixed rates available
Minimum deposit required (without requiring mortgage insurance or a Family Pledge)
20% of purchase price (plus costs)
Maximum loan term
30 years
Parental guarantee available
Property location
NSW, ACT & QLD
Multiple offset accounts
Free redraw online
Additional repayments
Split loan option
Can be used for land & construction (variable rates only)
Can be used for refinance
Fast refi
Available if self employed
Repayment holiday
Ongoing fee
Enquire now Ultimate Home Loan Enquire now Great Rate Home Loan Enquire now Line of Credit Enquire now Ultimate Investment Loan Enquire now Great Rate Investment Loan

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Conditions, fees and charges apply to all loans. Subject to meeting Greater Bank's lending criteria. Greater Bank Limited ABN 88 087 651 956. AFSL/Australian credit licence No. 237476.

~At the end of the fixed rate period customers can chose to re-fix their loan for another fixed rate period or let the loan revert to the applicable variable interest rate based on the loan and repayment type.

^Comparison rate is based on $150,000 over 25 years. WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

#Discounted rates include a discount on Home Loans of $150,000 or over and Home Loans with an LVR 80% or below and apply to new borrowings only. Discounted rate not available for Line of Credit facilities.

+Additional costs may apply if your loan has a fixed rate.

All new interest-only home loans, attract a 0.10% p.a. margin above the applicable Principal and Interest base rate. All new Line of Credit home loans, attract a 0.10% p.a. margin above the applicable Line of Credit base rate. The all-up interest rate which includes any margins, will be set out in your credit contract. View our Terms and Conditions.