Download the IBA Housing Loan fact sheet (PDF 390KB, new window)
IBA offers housing loan products to enable eligible customers to:
- buy an established residential property
- buy and upgrade an established residential property
- buy land and construct a new home.
IBA also provides loans and coordinates additional assistance for individuals wishing to buy or renovate an existing home or construct a new home in an Emerging Market location.
In the first instance you should check if you qualify for a housing loan from another lender (for example, a bank or credit union). If you do not qualify for a loan from another lender or are unable to borrow all the funds required to purchase a suitable home, you may be eligible for assistance from IBA. An IBA Home Lending Officer can talk to you about your requirements and tell you what information you will need to provide to IBA.
The amount that IBA lends to you will depend on a number of factors such as your income, your capacity to meet loan repayments and other housing costs over the term of the loan, the value of the property you are buying, the interest rate and the loan term.
In assessing each of these factors, IBA will take into account your:
- employment income
- other income you earn
- rental history
- housing and living expenses
- current credit cards and loans (for example, personal loans and credit cards)
- credit history
- savings history
- eligibility for the First Home Owner Grant scheme.
IBA will assess these factors at the time you lodge your housing loan application (after IBA has invited you to do so) and will then inform you of the amount you may be eligible to borrow.
Even if you qualify for an IBA housing loan, you may need to obtain part of the funds to purchase the home from another lender. If this is the case, IBA will advise you how much you will need to borrow from another lender.
You might like to use our Housing Loan Calculator to estimate how much you can borrow.
IBA’s standard deposit requirement is $3,000 or 5% of the cost of the home (whichever is the lesser). If you qualify for the First Home Owner Grant Scheme, you can use this money to meet the deposit requirements, legal and stamp duty costs.
IBA requires you to contribute the maximum amount you have available as your deposit after meeting stamp duty, conveyance and legal fees.
IBA offers housing loans at a range of interest rates, depending on your individual circumstances and loan requirements.
First home buyers may be eligible for a standard introductory interest rate which is capped at 4.5% for a minimum period of 12 months. First home buyers who obtain part of their funds from another lender may receive an extended introductory interest rate which is capped at 4.0% for a minimum period of three years.
On 1 January following the introductory interest rate period and each year thereafter, the capped rate applying to your loan will increase by 0.5%. The interest rate on the loan is set to the lesser of the capped rate and the IBA Home Loan Rate.
The IBA Home Loan Rate is comparable to the standard variable mortgage rates of other lenders.
Applicants who qualify for a loan to buy a home in Indigenous communities classified as Emerging Markets receive capped introductory interest rates which vary based on the applicants’ income.
Introductory interest rates do not apply if the Indigenous applicant has previously or currently owns a home. Applicants on fixed incomes, such as a pension, who qualify for an introductory interest rate, may be assessed based on their capacity to repay a higher interest rate to ensure that they can meet housing loan repayments over the term of the loan.
IBA will automatically adjust the interest rate on your loan in accordance with your loan agreement. For example, your interest rate may change when there is a change to the IBA Home Loan Rate or other rate applicable to your loan.
Read more about IBA Housing Loan Interest Rates.
IBA loan terms are based on your capacity to make housing loan repayments. Generally, loan terms are designed so that you contribute the maximum you can afford towards your loan repayments.
Your loan repayments will depend on how much you have borrowed, the interest rate applicable and the term of your loan. If you qualify for an introductory rate, your loan repayments will increase in line with increases in the interest rate.
For an IBA loan of $297,000 offered at IBA’s standard introductory rate of 4.5% over a term of 32 years the monthly repayments would start at $1,454.
View an example of Principal, Interest and Loan Repayments over the First Five Years (PDF 300KB, new window) where the loan rate is 5.75%).
The total amount of repayments made over the 32-year loan term would be $634,902, with interest charged of $337,902.
Your loan repayments will be affected by changes in the interest rate and any charges made to your loan.
IBA does not charge a loan application fee or a professional fee to prepare mortgages for new loans. However, you will be required to pay for other costs, including your property valuation report, building and pest inspections, conveyancing costs, state-levied duties and mortgage registration fees. Your IBA Home Lending Officer can discuss these costs with you further.
Read more about IBA’s Housing Loan Fees.
For further information
We invite you to read more about:
- IBA’s Home Ownership Information Sessions
- Buying a Home
- Applying for an IBA Housing Loan
- Managing Your Housing Loan
Or download the complete Understanding Home Ownership brochure (PDF 922KB, new window).
IBA has offices across Australia and our helpful staff are available to assist you. Find Your Local Office or Freecall 1800 107 107* (and select ‘option 1′ when prompted) to talk to one of our staff.
(*Calls to 1800 numbers from mobile or public phones may be timed and charged at a higher rate.)