Mortgage Loan – Monzi Covers The Ins And Outs Of Purchasing A Home

A mortgage loan could turn your homeownership dreams into a reality. However, when it comes to terms, rates, fees and features, there is so much to know. Keen to learn more? Read on as Monzi explains what you may need to know about mortgage loans. Let’s go.

Please note, certain ideas and products presented in this article may not be offered by Monzi nor the lenders we work with. This article presents only general information. Consider seeking professional financial, taxation, legal or other advice to check how the information and ideas presented on this website relate to your unique circumstances.

What is a mortgage loan?

A mortgage loan, often referred to as a home loan, is a type of loan that you may use to purchase a house. Given this, a mortgage loan will almost certainly be the largest financial commitment that you make in your life. Moreover, it will be one of the longest too, with repayment terms ranging up to 30 or 40 years.

Beyond this, a mortgage loan will take a similar form to most other loans. In short, you borrow the money today and your costs are divided into a series of repayments that you must regularly make for a period of between 15 and 40 years. Moreover, all loans must be repaid with interest, while fees are often charged too. As a result, there are considerable costs involved.

While that explains what a mortgage loan is, we know you’re here to learn more. Read on as Monzi provides you with an all-encompassing guide to mortgage loans.

Home loan mortgage rates explained

As mentioned, lenders will apply an interest rate to all home loans. In most cases, these home loan rates will be listed as an annual percentage and will be variable. As a result, they may move up or down depending on the various market factors they are influenced by.

In terms of what a reasonable rate may be, you’ll need to do your research. While most rates will fall somewhere below 5%, a small saving here or there can result in substantially lower costs in the long run. So, make sure you investigate a wide range of potential lenders.

Finally, note that your mortgage rate may be influenced by your financial situation and the amount you want to borrow. For instance, if you pay a larger deposit (e.g. 30%), then you may be offered a lower rate than a borrower who can only pay a 10% deposit. However, this may vary between lenders and Monzi cannot guarantee if this will always be the case.

Mortgage loan comparison: how do I compare my options?

If you’re looking for a mortgage that suits your needs, it’s always a good idea to compare your loan options. With this, the good news is that the home loan market is extremely competitive. As a result, there should be no shortage of choices available to you.

So, when you’re looking to compare mortgage loans, make sure you consider the following factors:

  • The terms: how long will you have to repay your loan (e.g. 30 years) and are there a range of options for you to choose from?
  • The costs: what is the interest rate and are there any fees you must pay? As you’d expect, lower costs are usually better.
  • Are there any additional features: do you have the freedom to make extra repayments or take advantages of features such as offset accounts?
  • Which lender should I choose: while this may be informed by the points above, make sure you consider the different types of lenders available. For instance, you may apply with a bank, a specialist mortgage lender or even one who operates solely online.

Note that these points are simply a starting point. As a result, there may be other factors worth considering to determine which mortgage loan is right for you.

Should I use a home loan mortgage broker?

Using a mortgage broker could be one way to simplify your home loan application process.

In short, they act as a bridge between you and your lender. With this, they will work with you to determine your needs and borrowing capacity. From there, they can find loan products that may suit your circumstances and outline them to you. Best of all, they can help guide you through the often-complicated application process too.

For more information on using a mortgage broker, Moneysmart has provided an insightful and useful mortgage broker guide covering all you need to know. Check it out today.

Will a mortgage broker charge a fee?

Generally speaking, they will not.

In most cases, banks and lender pay mortgage brokers a commission if you take out a loan with them. As a result, you may not need to pay anything upfront to use their services.

However, as lenders often pay brokers directly, this may influence the products that they recommend you. While this isn’t to say you shouldn’t use a mortgage broker, just be aware that they may be working in their own best interests too.

Finally, note that some mortgage brokers may charge you a fee that must be paid upfront. However, this should be outlined to you. If you are unwilling or unsure if you should pay a fee, shop around and compare mortgage brokers to determine any costs that may be involved.

What is a good downpayment on a mortgage loan?

In most cases, lenders recommend that you pay a deposit of 20%. This will mean that you have a loan to value ratio of 80%, which is considered good. If you can pay more than 20%, that’s great. In some cases, it may even help you access more favourable terms (e.g. a lower rate). However, 20% is generally all that’s required.

If you cannot pay a deposit of 20% but would like to take out a mortgage loan, there are still options for you. See below for our quick and easy guide to your low deposit home loan options.

Pay Lenders Mortgage Insurance

If you pay a home loan deposit of less than 20%, then your loan to value will exceed 80%. Unfortunately, lenders will deem these loans to be high risk.

In these situations, your first option may be to pay Lenders Mortgage Insurance (LMI). In short, LMI protects lenders if you default on your home and the sale price if not sufficient to cover your outstanding loan amount. Usually, you must pay LMI as an upfront premium and the costs may exceed $10,000.

However, it’s important to note that LMI Is not a product that exists to protect borrowers. Instead, it’s there to act as a safeguard for lenders. As a result, do your research to determine if this may be an option for you.

Apply for a guarantor home loan

Guarantor home loans are arguably the most common mortgage loan for young, first home buyers who can’t quite pay a 20% deposit. But, what are they?

In short, with a guarantor home loan, you’ll need a family member or other close relation to co-sign your loan and act as a guarantor. To fill this role, the individual will need to be a homeowner and typically must owe less than 80% of their property value.

The idea behind these loans is that your guarantor uses their home equity as security to cover your lack of deposit. However, there are risks involved, given that if you default on your loan, the guarantor may be liable to cover your repayments. As a result, if you do approach a guarantor to co-sign your loan, ensure that they consider all risks and consequences associated with the decision.

Note that lenders will typically only allow close family members (e.g. parents or siblings) as well as spouses to act as guarantors on home loans. As a result, friends, business associates or other similar individuals may be ineligible.

First Home Loan Deposit Scheme

As a first home buyer, you could make use of the first home loan deposit scheme which allows you to purchase a home with a deposit of as little as 5%. With this, the Australian government will guarantee the difference between your deposit and the standard 20%.

The idea behind this scheme is to get Aussies owning homes sooner. Moreover, with the government acting as the guarantor, you may avoid paying the costly lenders mortgage insurance that’s usually required on a low deposit home loan.

Can I get a mortgage loan with no deposit?

While no deposit home loans may be offered in certain circumstances, this will typically be on an extremely limited basis. As a result, you may need to wait until you’ve saved up a deposit of a least 5% before you may realistically be approved for a home loan.

Having said this, no deposit mortgages may be offered in some situations if you can find a guarantor to secure your loan. However, the availability of these loans may depend on the lender that you are dealing with. As a result, your best bet could be to contact various lenders to determine what your options may be.

What is a reverse mortgage loan?

A reverse mortgage loan is a form of home equity release that allows homeowners to borrow money with their home equity acting as security. Generally, reverse mortgage loans are an option for individuals as they reach retirement age. Moreover, the older you get, the more you may be able to borrow.

In addition to this, if you do borrow money via a reverse mortgage loan, then you can potentially access it as a lump sum, a line of credit or as a regular stream of income. However, any money that you borrowed is repaid when you sell your home.

Given this, you must consider whether a reverse mortgage is right for your situation. Consider the costs as well as the funds that you currently have available. Moreover, don’t hesitate to talk to a qualified professional who may provide advice tailored to your situation.

What is a business mortgage loan?

A business mortgage (also known as a commercial mortgage) is essentially identical to a regular home loan. However, rather than an individual purchasing a home, a business mortgage allows a company to purchase property, land, warehouses, offices or other such facilities for their business.

From there, the business loan is repaid just like a home loan with similar terms on offer too. For instance, your business may have the option to choose between a fixed or variable rate and may even be able to make use of offset accounts or interest-only loan periods too.

So, if your business is in the market to purchase some property, a business mortgage could be the right choice for you.

What will my home loan repayments be?

Several factors will determine your repayment amount. As a result, we cannot say how much you will have to pay. However, to get an idea, using a mortgage loan repayment calculator is always a good place to start.

In short, a home loan mortgage calculator will ask you to input information such as your loan amount, term, repayment type and interest rate. Based on that, it will generate an estimate of your total loan costs and regular repayment amount. Moreover, all figures are adjustable, meaning you can see how a change in your loan term or interest rate may change your costs.

Most mortgage lenders will offer some form of loan repayment calculator on their website. However, note that any figures generated through these calculators are estimates only and should only be used as a guide. Your actual repayments may vary as determined by your lender.

What are the three types of mortgage loans?

Mortgages will typically come in three distinct forms: fixed, variable and split-rate. In short, each will relate to the interest that you must pay. So, if you’d like to learn more, check below for Monzi’s guide to your mortgage loan options:

Variable rate mortgage loans

Beginning with the most common mortgage, a variable rate home loan is the standard form. In short, as you may have guessed from the name, your interest rate may change several times each year, based on certain market factors. Some movements may be favourable (i.e. interest rate drop), while others may be harmful (i.e. interest rate rise).

While this uncertainty may be a downside as it can make budgeting for your interest payments more difficult, variable rate home loans are often more flexible and provide more features than other home loans. To make this more clear, you may have the option to make additional payments or make use of extra features such as offset accounts or redraw facilities.

Fixed rate mortgage loans

As you’d expect, with a fixed-rate your interest rates are locked in. As a result, you know exactly what you have to pay, which can make budgeting easier. With this, the key benefit of a fixed rate is the certainty that it provides.

However, it’s worth noting that fixed-rate home loans will usually only remain in place for between one and five years, depending on what you select. Moreover, you may need to pay a premium for this feature. Once the fixed period elapses, your loan will transition into the standard variable-rate form.

Split rate mortgage loans

A split-rate home loan allows you to combine the benefits of both a fixed and variable-rate. In short, your loan will be divided into two parts.

On one part, you will make repayments on a variable rate. On the other part, you will make repayments on a fixed rate. As a result, you can lock in the certainty of a fixed-rate while also taking advantage of the flexibility that comes with a variable rate if rates decrease. In most cases, you can also select how your loan is divided (e.g. 40% fixed, 60% variable).

Finally, as with a fixed-rate loan, your split facility will typically only remain in place for one to five years and there may be costs associated with this feature. Once the period has elapsed, your loan may revert to the standard variable-rate structure.

home purchased using a mortgage loan

How long is a mortgage loan?

In short, Monzi cannot say. The term of your mortgage will depend on what you agree to with the lender. As a guide, lenders may offer mortgages with terms ranging from as short as ten years all the way up to 40 years.

Given this, you should select the mortgage duration that suits your situation the best. In other words, consider your income as well as the amount you are borrowing. While trying to pay your loan off ASAP may seem like a good idea, you must still ensure that the repayments are affordable for your budget. As a result, you should consider the terms on offer to determine which is right for you.

What are the disadvantages of a mortgage?

If you would like to purchase a home, then it’s highly likely that a mortgage loan will be your only option. After all, for most of us, it won’t be possible to pay hundreds of thousands of dollars upfront to buy a home outright. Despite this, mortgage loans are not perfect and some disadvantages must be considered.

Firstly, a mortgage loan is an enormous debt that you must carry for, in many cases, decades. This can be a heavy burden, particularly if things go wrong (e.g. you lose your job). In addition to this, as your home loan is secured against your house, if you default on your loan, then your house may be repossessed.

While these drawbacks may be obvious, they must be considered. Your dream may be to own a home, however, that should not come at the cost of compromising your financial situation. Ultimately, a mortgage loan may not be right for everyone.

Can I get a mortgage online?


In today’s modern world, your home loan mortgage options aren’t just limited to banks. There are now several online home loan lenders who may make it possible for you to apply from the comfort of your own home. Surely it can’t get any more convenient than that?

In addition to this, online lenders are often praised for their flexibility and competitive rates. So, if you value extra features and lower costs, then it may be worth applying with a lender online.

However, Monzi cannot guarantee if you will be offered lower home loan mortgage rates online. Given this, you should compare banks, online lenders and other mortgage loan institutions to determine which is right for you. The costs, terms and additional features may all factor into this comparison.

What information do I need to provide when I apply?

As part of your home loan application, you must provide a range of details and documents. In short, lenders will use this information to assess your financial situation so that they can determine your suitability for a home loan. After all, if lenders are going to allow you to borrow thousands of dollars, they want to be sure that you can repay it.

So, when you’re preparing your application, ensure that you can provide or have access to the following:


The first step of any application is to verify your identity. In other words, you must prove that you are who you say you are. With this, you will typically need to provide some of the following documents:

  • Driver’s licence
  • Birth certificate
  • Passport
  • Medicare Card
  • Notice of Assessment
  • Utility bills

Note that there may be additional documents that you could use to verify your identity. This is simply a list of the most common documents that applicants use. Contact your lender to determine what other documents may be used.

Income and expenses

After you’ve verified your identity, lenders will next look to assess your budget. This will be done through an assessment of your income and expenses. By analysing the balance between the two, your lender may be able to determine whether or not the associated home loan repayments would be affordable for you.

So, before you apply, ensure that you can provide proof of income (e.g. recent bank statements and payslips, any rent payments received) and can declare your current expenses (e.g. food, rent, utilities, childcare etc.).

Note that if you are self-employed or are a casual employee, then the requirements may vary. Contact your lender to determine what information you must provide to verify your income.

Assets and liabilities

The final category of documents that you must provide relates to your assets and liabilities.

Starting with assets, this relates to anything that you own that has monetary value. Your asset position may give lenders an idea of your overall financial position. As a guide, assets may include:

  • Your properties
  • Any vehicles you own
  • Share portfolio
  • Savings and term deposits
  • Superannuation

Moving onto liabilities, this will include any on-going repayments or existing debts that you have. Lenders will always want to know this as it may impact your ability to make your mortgage loan repayments. So, ensure you can provide information regarding any credit cards and other outstanding debts such as home loans, car loans or online personal loans.

Can I get a mortgage loan with bad credit?

In short, you may. However, it’s important to understand that banks and traditional financial institutions typically will not offer home loans to borrowers with bad credit. Having said this, there may be some non-conforming lenders who can help.

These lenders may be able to offer home loans with criteria that are slightly less strict. As a result, they could be an accessible option for bad credit individuals looking to purchase a home.

However, to be eligible, you will need to be in a secure financial position. While these lenders may consider applicants with bad credit, you must demonstrate that you can pay a deposit and afford the repayments comfortably to account for this.

Finally, note that approval is never guaranteed. Lenders will conduct an assessment to determine if they should offer you a mortgage loan. As a result, if you’ve got bad credit, it can often be difficult to secure approval.

Can I refinance my mortgage loan?

Yes, potentially.

If you’re not aware, refinancing your home loan involves replacing your existing loan with a new mortgage, typically at a lower rate. With this, you may refinancing with the same lender or a new lender altogether. So, if your interest rate is a little higher than it should be, it’s often a good idea to look around. Compare your rate with other rates on offer to see if you can get a better deal.

How long will it take to receive an outcome?

In short, time will vary.

Generally speaking, lenders will do what they can to provide you with an outcome as soon as possible. However, processing times may range from as little as one business day up to one week or longer, depending on the nature of your application. In most cases, approval times will be much longer than those on quick cash loans, given that there is more information that lenders must consider.

If you are looking for a fast outcome, then ensure you provide all the necessary information when you apply. If your lender has to chase up information that you failed to provide, then your outcome may be delayed.

In addition to this, bear in mind that paying a deposit of 20% or more may also lead to a faster outcome. If you require a guarantor or are paying Lenders Mortgage Insurance, then your outcome may take slightly longer. However, this may depend on the lender you are dealing with.

What are the cheapest home loan interest rates Australia?

Unfortunately, Monzi cannot say. As a result, you must do your research to find the best rates. With this, comparing lenders is crucial. Use comparison sites or access each lender’s cost page. From there, you may be able to determine the best rates that can help you lower overall mortgage costs.

Finally, keep in mind that while a small interest saving today may not seem like a big deal, over the course of a 20-30 year mortgage, that may lead to significant savings. As a result, it pays to find the best mortgage loan rates possible.

Mortgage loans and Monzi

At Monzi, we’ve outlined what you need to know about mortgage loans and how you may apply. However, keep in mind that we cannot offer these products.

In short, we’re not mortgage lenders. Moreover, we’re not lenders of any kind. Instead, we’re a personal loan lender-finder service. What does that mean? Well, allow us to explain.

At Monzi, we work a network of lenders who offer fast cash loans from $300 to $10,000. So, rather than spending your day trying to find a lender online, you can just submit one application with us. From there, our automated system takes over and attempts to match you with an available lender from our network.

As a result, if you’re after instant cash loans to cover an immediate expense, then you can turn to Monzi. We may make it easy for you today. Apply now.

Should I get a personal loan or a mortgage?

In short, it’s up to you. Realistically, the choice will be fairly obviously based on your needs. On the one hand, if you’re looking to buy a house, then you’ll need to apply for a mortgage loan. On the other hand, if you just need fast cash to cover some expenses, then a personal loan may be an option for you.

While Monzi cannot help you with a mortgage loan, personal loans are our domain. Apply today from $300 to $10,000 and we may match you with a lender in just 60 minutes. Best of all, you could divide your costs into manageable repayment terms ranging from 12 to 24 months.

Ready to apply? Scroll up and use Monzi’s loan slider to begin now. Let’s go!

Any questions?

If you’re looking to take out a personal loan rather than a mortgage loan and think that Monzi’s lender-finder service could be the right avenue for you to take, that’s great!

However, we understand that, when it comes to lending and borrowing, things can often seem a little complicated. That’s why we’re always here to help. So, if you’ve got questions about Monzi or what our lender-finder service can do for you, get in touch. Touch base with us at and one of our friendly staff will get back to you ASAP.

Keep in mind, though, that Monzi can only answer questions about our personal loan lender-finder service and organisation. As a result, you must contact a lender directly regarding any mortgage loan questions you may have.

Apply for a personal loan today

Do you need a cash loan from $300 to $10,000? Apply today. Monzi may match you with a lender before you know it. With easy applications and fast outcomes, applying with Monzi may be the easiest thing that you do all week.

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Factor In Costs

You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000


12 months (minimum)

12 months (maximum)


20% upfront establishment fee

+ 4% monthly fee


Representative example based on a loan of $1000 over 6 months a borrower can expect to pay a total of $1440.

Disclaimer: Under the current legislation, all Small Amount Credit Contract loan providers don’t charge an annual interest rate. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The comparison rate on loans between $300 and $2000 could be up to 199.43%. The minimum loan term is 16 days and maximum loan term is 12 months. Representative example based on a loan of $1000 over 6 months a borrower can expect to pay a total of $1440. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan.

Loan amount

$2,100 - $4,600


13 months (minimum)

24 months (maximum)


47.8% Annual Percentage Rate (APR)

65.85% Comparison Rate p.a.


Representative example based on a loan of $2500 over 24 months a borrower can expect to pay a total of $4,556.88.

The maximum interest rate for a Medium Amount Credit Contract is 47.8%. Comparison Rate 65.85% p.a. The maximum loan term is 24 months. Representative example based on a loan of $2500 over 24 months a borrower can expect to pay a total of $4,556.88. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Credit criteria and terms and conditions apply.

Loan amount

$5,000 - $15,000


13 months (minimum)

24 months (maximum)


17% Annual Percentage Rate (APR)

36% Comparison Rate p.a.


Representative example based on a loan of $10,000 over 36 months a borrower can expect to pay a total of $16,489.

The starting interest rate for a Personal Loan is 17%. Comparison Rate 36% p.a. The maximum loan term is 24 months. Representative example based on a loan of $10,000 over 36 months a borrower can expect to pay a total of $16,489. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Credit criteria and terms and conditions apply.