Home Loans – Secure Your Future or Risk It? (2026)

As you embark on the journey of purchasing a home, one of your primary concerns might be understanding the nature of home loans. You may be wondering, are home loans secured or unsecured? This distinction is crucial, as it impacts everything from interest rates to loan approval. Let's delve into the intricacies of home loans to help you make informed decisions.

Understanding Secured vs Unsecured Home Loans

Home loans are one of the most common types of loans in Australia, and they are typically secured loans. A secured loan means that the borrower pledges an asset as collateral for the loan—in this case, the property you are buying. This gives lenders a sense of security; if you default on your loan, they have the right to sell the property to recover their money. Unsecured loans, on the other hand, do not require collateral, but they often come with higher interest rates and stricter borrowing criteria.

Current Home Loan Rates, Requirements, and Options

In 2026, the Australian home loan market is dynamic, with interest rates influenced by various economic factors. As of now, fixed interest rates range from 6.49% to 8.5%, while variable rates are between 7% and 9.5%. These rates can vary significantly depending on the lender, the borrower's credit profile, and the loan amount.

To be eligible for a home loan, lenders generally require:

• A minimum deposit of 10% - 20% of the property's value
• A good credit score (typically above 620)
• Proof of stable income
• Debt-to-income ratio below 36%

With access to over 83 lenders, Esteb and Co can help you navigate these options, ensuring you find a loan that meets your needs.

Loan Type	Interest Rate Range	Collateral Required
Secured Home Loan	6.49% - 9.5%	Yes, property
Unsecured Personal Loan	8% - 12%	No

Steps to Secure a Home Loan

Securing a home loan can seem daunting, but following these steps can simplify the process:

1. Assess Your Financial Health: Check your credit score, calculate your debt-to-income ratio, and evaluate your savings for a deposit.
2. Research Lenders: Compare interest rates and loan terms from different lenders. Consider using a broker like Esteb and Co to access a wide range of options.
3. Get Pre-Approval: Obtain a pre-approval from your chosen lender to understand how much you can borrow and show sellers you're a serious buyer.
4. Find Your Property: Start house hunting within your budget. Once you find a property, make an offer and negotiate terms.
5. Finalise Your Loan: Complete the loan application process with your lender, providing all required documentation.
6. Settlement: Upon loan approval, proceed to settlement where ownership of the property is transferred to you.

Expert Tips and Considerations

Here are some expert tips to consider when securing a home loan:

• Plan for Interest Rate Changes: If you opt for a variable rate loan, be prepared for potential fluctuations in repayments.
• Understand Loan Features: Features like offset accounts and redraw facilities can save you money in the long run.
• Consider Refinancing: Regularly review your loan terms and consider refinancing if better rates become available.
• Consult Professionals: Leverage the expertise of mortgage brokers, such as those at Esteb and Co, to guide you through the lending landscape.

Frequently Asked Questions

1. Can I get a home loan with a poor credit score?
While challenging, it's possible to secure a home loan with a poor credit score by providing a larger deposit or choosing a lender with flexible criteria.

2. What is the difference between fixed and variable interest rates?
Fixed rates offer stability with set repayments, while variable rates can fluctuate, potentially offering savings if rates decrease.

3. How much deposit do I need for a home loan?
Generally, a deposit of 10% - 20% of the property's value is required, although some lenders may offer loans with lower deposits.

4. Are there any government grants available for first-time home buyers?
Yes, various state and federal grants and schemes exist to assist first-time buyers, such as the First Home Owner Grant (FHOG) and stamp duty concessions.

5. How can Esteb and Co help me with my home loan?
With access to a panel of 83+ lenders, Esteb and Co can provide personalised advice and find competitive home loan options tailored to your needs.