Isabella Cester is one of many first homebuyers who are daunted by the high number of lenders and mortgage options.
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Pre-existing debts and a confusing maze of mortgages prove stressful for first home buyers

Are you struggling to save for your first home under the burden of pre-existing debts, a multitude of financial commitments and overwhelming mortgage choices? According to the recent Homeloans Homebuyer Barometer, you’re not alone.

Rent, car repayments and cost of living bills make a huge dent in most people’s weekly pay packet, while holidays, entertainment, hobbies and life’s ‘little luxuries’ quickly soak up what’s left. And we won’t even discuss the high cost of smashed avocado on toast making affording a home more difficult for Millennials. No wonder many young adults are still living with their parents or anchored to rental accommodation.

One of the many respondents to the Homeloans Homebuyer Barometer was insurance specialist Isabella Cester and her partner, who discovered they shared the same plight as many first home buyers when saving for a deposit and choosing a mortgage. They purchased a block of land and a freestanding home in 2015 in the leafy suburb of Riverstone in Sydney’s north west.

Like Isabella, the majority of NSW respondents bought a freestanding home rather than an apartment and purchased it with another person. However, unlike most of the state’s respondents who purchased a home to renovate, Isabella and her partner’s home “dream home” is a new build, which they regard as better value.

Isabella and her partner decided to buy a freestanding home are they regard it as better value. “We decided that we would be able to utilise a house for a much longer period of time compared to an apartment. We will have our own backyard and no strata overheads to worry about,” says Isabella.

“From a price point, we felt that a new house was better value compared to an apartment; a two-bedroom apartment in our area will sell for around $650,000 whereas a house and land package in a new development can be secured for about $750,000.”


The Barometer showed millennials were repaying over $10,000 of debt while saving for a deposit.

Saving for the deposit hindered by pre-existing debts: one of the biggest stresses when buying a first home 

Along with a staggering 43 per cent of Homeloans Homebuyer Barometer respondents, Isabella and her partner had debts to repay before they started saving for their deposit. First home buyers in Victoria and Queensland fared slightly better in the Barometer, with about 30 per cent having pre-existing debts.

And it’s the Millennials, like Isabella, who have the biggest debts to pay. “Over $10,000 while saving for a deposit,” says Will Keall, Homeloans’ head of marketing. By comparison, 90 per cent of respondents aged 45 to 64 only needed to pay off less than $5,000.

It took Isabella and her partner between five and 10 years to save for their deposit and close to a year to find their dream home. They are typical of NSW first home buyers, according to the Barometer, which found that almost a quarter of respondents took more than five years to save for a deposit. However, unlike the 12 per cent of respondents Australia-wide who used money from their parents as the great source of their deposit, Isabella and her partner used all their own savings.

“We put our deposit down for a block of land in August 2015, at a time when the market was incredibly inflated and competitive. We were fortunate enough to secure our land from a home builder… We saw (the extended registration date) as an opportunity to save more money,” explains Isabella, who boosted her earnings by selling clothes on eBay.


Navigating the maze of mortgages is overwhelming for many first home buyers.

The second most stressful part of buying a first home: finding the right mortgage 

It will come as no surprise to many who already own a home that the survey found that the second most stressful part of buying a first home is finding the right mortgage. Many Australians planning to buy their first home find the high number of lenders and options daunting and stressful.

“Navigating the maze of mortgages is obviously overwhelming for many first home buyers, with more than one in five Homebuyer Barometer respondents across the country citing that as the greatest stress in buying a home,” says Will.

When it comes to finding the right mortgage, Will recommends that first home buyers gain an understanding of the “nuts and bolts of a loan – not just the interest rate on offer” and to ask for a key facts sheet that will help you compare and select the best loan for you.

Isabella is one of many first homebuyers who struggled with finding the right mortgage. “I found the process quite daunting and I was overwhelmed with the options available,” she says. Isabella was also worried that the banks would be hesitant to lend money to someone her age (mid 20s). “Fortunately I maintained a good credit history and have been in a similar line of work for several years so this worked in my favour,” she adds.

Finding a lender who will take you on is one challenge – finding the right rate yet another. “Most importantly I was looking for a competitive rate and provider who could lend me 90 per cent loan to value ratio plus lender’s mortgage insurance,” Isabella explains. She found this to be the most stressful part of buying their dream home “as many first home lenders are under the assumption that we must have 20 per cent saved up. This was definitely not the case!

“We also had an excellent mortgage broker – Michelle Jarvis at Tailored Home Loans – who guided us to the most suitable lender. She had a lot of patience to explain why Homeloans was best suited to our needs, as well as what to expect through the application process,” says Isabella.

With their deposit paid and mortgage secured, Isabella and her partner are now looking forward to enjoying their dream home. “We’re happy with the house design and were able to tweak the plans to make it truly our own,” says Isabella, who works mostly from home and is looking forward to being close to Parramatta where her weekly meetings are held. “I love my job and am looking forward to working from our new home!”


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Jane Ryder

Jane Ryder is a writer and PR and marketing consultant who brings over 25 years’ experience creating content and promotional strategies for clients big and small. Motivated by a love of music, design, food, wine and travel, her career to date includes writing, producing and styling for some of Australia’s leading fashion and lifestyle magazines, promoting artists at record company Sony Music, and running her own consultancy. When not at her desk, Jane spends far too much time coaxing Bailey her cavoodle to get off the couch and her teens do their chores and far too little of it swimming, reading and enjoying long lunches with friends.

The opinions expressed in this article are the opinions of the author(s) and not necessarily those of Homeloans Ltd.