Home Loan? Here's How to Secure Approval (2026)

Are you dreaming of owning a home but worried about the complexities of securing a home loan? You're not alone. Many aspiring homeowners find themselves overwhelmed by the process of obtaining a mortgage, especially in Australia's dynamic housing market. Whether it's concerns over interest rates, eligibility, or simply the fear of the unknown, the journey to homeownership can seem daunting. But with the right information and guidance, you can navigate these waters confidently and successfully.

Understanding Home Loans

Before diving into the specifics of how to secure a home loan, it's essential to understand what a home loan is and how it functions within the Australian market. A home loan, commonly referred to as a mortgage, is a financial product that allows you to borrow money to purchase a property. Over a set term, usually between 25 and 30 years, you repay this loan with interest to the lender.

The Australian home loan market in 2026 is characterised by a diverse range of lenders and products, offering a variety of interest rates and terms. The current interest rates for home loans range from 6.49% to 12%, depending on the type of loan and the borrower's circumstances. Understanding these options and how they apply to your situation is crucial in making an informed decision.

Rates, Requirements, and Options

Securing a home loan involves meeting specific criteria set by lenders. In 2026, these requirements include a stable income, a good credit score, and a deposit of at least 10-20% of the property's value. However, with Esteb and Co's access to a panel of over 83 lenders, you might find more flexible options tailored to your needs.

Each type of loan comes with its pros and cons. Fixed-rate loans offer the security of a set interest rate for a specified period, protecting you from rate hikes. Variable-rate loans, however, might offer lower initial rates and more flexibility. Low deposit loans can help you enter the market sooner but often come with higher rates and lenders mortgage insurance (LMI).

Steps to Get a Home Loan

Securing a home loan may seem complex, but breaking it down into manageable steps can simplify the process:

1. Assess Your Financial Health: Review your income, expenses, and savings. Use online calculators to estimate how much you can borrow and what your repayments might look like.
2. Improve Your Credit Score: Pay off outstanding debts and avoid taking new loans. Your credit score significantly impacts your loan eligibility and interest rates.
3. Save for a Deposit: Aim for at least 10-20% of the property's value. Consider setting up a dedicated savings account for this purpose.
4. Explore Loan Options: With a wide array of lenders available through Esteb and Co, compare different products to find one that suits your needs.
5. Get Pre-Approval: This indicates to sellers that you're a serious buyer and gives you a clear idea of your budget.
6. Choose Your Property: Once pre-approved, start house hunting within your budget.
7. Complete the Application: Submit the necessary documentation, including proof of income, identification, and any other required paperwork.
8. Settlement: After approval, your lender will handle the transaction, and you’ll take possession of your new home.

Tips and Considerations

Here are some expert tips to smooth your path to homeownership:

• Consider Future Interest Rate Changes: Although a fixed rate offers stability, variable rates could decrease, potentially saving you money.
• Be Aware of Fees: Look beyond the interest rate and consider fees such as application fees, ongoing fees, and exit fees.
• Use a Mortgage Broker: A broker like Esteb and Co can provide personalised advice and access to a broader range of lenders, increasing your chances of finding a suitable loan.
• Stay Informed: Regularly review your loan's terms and market conditions to ensure your mortgage continues to meet your needs.
• Plan for Additional Costs: Consider additional costs such as stamp duty, legal fees, and moving costs when budgeting for your new home.

Frequently Asked Questions

1. Can I get a home loan with a bad credit score?
Yes, although it may be challenging, some lenders on Esteb and Co's panel specialise in loans for those with less-than-perfect credit. However, expect higher interest rates and stricter terms.

2. How much can I borrow?
This depends on your income, expenses, credit score, and the deposit size. Use a borrowing power calculator for a more accurate estimate.

3. What is Lenders Mortgage Insurance (LMI)?
LMI is insurance that protects the lender if you default on your loan. It is often required if your deposit is less than 20% of the property's value.

4. How long does the loan approval process take?
Typically, it takes 4-6 weeks, but this can vary depending on the lender and your individual circumstances.

5. Can I include renovation costs in my home loan?
Yes, some lenders offer construction or renovation loans, which can be structured to include these costs.

6. Is it possible to refinance my home loan later?
Absolutely. Refinancing can help you secure a better interest rate or more favourable terms as your financial situation changes.

7. What documentation do I need for a home loan application?
You'll typically need proof of identity, proof of income, evidence of savings, and details of any existing debts.