AFG home loans

AFG offers home loans that may suit first home buyers, refinancers, self-employed individuals, those looking for bridging finance between their current home loan and their next loan, property investors, those looking to build a new home on vacant land, and more.

However, when it comes to what types of borrowers AFG lends to, prospective borrowers should know a few key things.

The first is that AFG has a maximum allowed loan-to-value ratio (LVR) of 80%, meaning AFG will require you to pay lenders mortgage insurance (LMI) if your saved deposit is less than 20% of your total proposed loan size. Additionally, depending on the suburb a property’s located in, AFG may require a lower maximum LVR in order to reduce the perceived risk of lending against a property in that area.

AFG also likely won’t approve your home loan application if you don’t have the capacity to repay your proposed home loan at a rate 3% higher than the advertised interest rate. This is because the Australian Prudential Regulation Authority (APRA) requires all lenders to assess an applicant’s ability to service their proposed home loan in the event of interest rate hikes.

Yes, AFG lends to prospective first home buyers. While AFG doesn’t have a particular home loan product tailored specifically for first home buyers, they have several tools and resources available to first home buyers designed to help them navigate the process of buying a home for the first time.

No, AFG is not a participating lender in the Home Guarantee Scheme. The Home Guarantee Scheme helps certain home buyers secure a home loan with a deposit smaller than 20%, without having to pay lenders mortgage insurance (LMI).

The Home Guarantee Scheme is made up of three separate initiatives:

• The First Home Guarantee, which allows eligible first home buyers to purchase a home with a deposit of as little as 5%.
• The Family Home Guarantee, which allows eligible single parents to purchase a home with a deposit of as little as 2%, regardless of whether they’re a first home buyer or not.
• The Regional First Home Buyer Guarantee, which allows eligible first home buyers to purchase homes in regional areas with a deposit of as little as 5%.

Applications for one of these schemes can only be made through a participating lender or a mortgage broker acting as an authorised representative of a participating lender. So, if you’re looking to apply for the Home Guarantee Scheme, you may have to apply for a home loan with a different lender.

Yes, you can switch your home loan to AFG from another bank by refinancing. Borrowers refinancing their loan with AFG can choose a fixed or variable rate to switch to, and may be able to add a redraw facility and/or an offset account to eligible loans.

AFG advises that they require a borrower to take out LMI when there is an increased risk associated with the loan in question. They will typically charge LMI if the borrower’s deposit represents less than 20% of the total loan value.

However, if the security property is located in a riskier suburb, AFG may require you to pay LMI if your LVR isn’t less than 70%.

AFG may charge upfront application and processing fees on some of its home loans, as well as a monthly fee for borrowers with an offset account. Additionally, you may incur a fee for breaking or otherwise closing a fixed rate loan before the end of its fixed rate period.