1. The Government Guarantor Scheme Is Probably More Available to You Than You Think
Most people call this the First Home Guarantee. I call it the government guarantor scheme, because that is what it actually is. When you go to your parents and ask them to go guarantor on a loan, the bank feels comfortable lending because someone is backing you. This scheme works the same way, except the government is the one standing behind you.
In practice, that means you can buy with a 5% deposit and skip Lenders Mortgage Insurance altogether. Since October 2025, the income caps and place limits have been removed, so if you earn more than $200,000 as a couple of $125,000 as a single you are now eligible, so it is open to far more buyers than it used to be. If someone has told you that you need a 10% or 20% deposit to avoid LMI, it is worth checking whether this scheme applies to you, because chances are it does.
2. LMI Protects the Bank, Not You
This one gets misunderstood constantly. Lenders Mortgage Insurance is not there to help you if you lose your job or fall behind on repayments. It is an insurance policy that protects the bank if you default and they end up out of pocket. You pay the premium, but the bank is the one being covered.
That is exactly why avoiding it through the government guarantor scheme is such a real saving, not just a technicality. We are talking about tens of thousands of dollars on a typical Geelong purchase that would otherwise go toward a product that never benefited you in the first place, besides you get a better interest rate as well which increases your borrowing capacity as well!
3. Victoria's Stamp Duty Concession Can Be Worth Tens of Thousands
Victoria removes stamp duty entirely on properties up to $600,000 and reduces it on a sliding scale for homes between $600,001 and $750,000. If you are building a new home under $750,000, you can also access the $10,000 First Homeowner Grant - this is a great one if you are building house and land for up to $950,000 too.
4. Get Pre-Approval Before You Start Looking
Pre-approval gives you a confirmed borrowing limit before you walk into a single open home. It does not lock in a rate, but it means that when you find the right property, you can move on it instead of scrambling to sort finance under pressure.
Good properties in Geelong still attract genuine competition. Pre-approval tells agents and vendors you are a serious buyer, and it forces a realistic conversation about what you can actually borrow, then you feel secure and confident in making offers, which to me, beats guessing from an online calculator. It is typically valid for three months but updating your details for a 3 month extension, so let your broker know if anything changes in that window.
5. How Lenders Actually Assess What You Can Borrow, and Why Your Regular Bank Is Not Always the Answer
Every lender tests your ability to repay a loan using a buffer rate, generally a three percentage points above the actual rate you would be paying. So even if you are applying for a loan at a certain rate, the bank is checking whether you could still service it if rates went noticeably higher, which is good for our current climate. That is one reason two people on the same income can get very different borrowing power, depending on their existing debts, expenses, and how a particular lender treats things like credit card limits or HECS debt.
Here is the part that catches people out. Every lender assesses that buffer differently. One bank might be tens of thousands off your borrowing capacity because of how it treats your overtime/bonus income, HECS with a low balance or having a friend rent a room from you, let's not even get started on being Self Employed and how banks see things in different light. While another lender looks at the exact same financial position and lands somewhere completely different. Staying with the bank you have banked with since you were a teenager feels safe, but it means you are only ever seeing one lender's version of what you can borrow, which might not the best one available to you.
This is genuinely the value a broker brings. I am not tied to one bank's policy, so I can look at your situation against a panel of lenders and find the one that actually suits how your income and debts are structured, rather than you finding out the hard way that your regular bank was never going to give you the best outcome in the first place.
If you want to work through what any of this looks like for your specific situation, get in touch. Happy to run the numbers with you.
