Can Students Get a Mortgage? A Complete Guide to Home Loans for Students

Buying a house while studying might seem out of reach, but home loans for students are possible with the right approach. While lenders typically prefer stable, full-time income, students can still qualify by using a guarantor, showing part-time earnings, or leveraging government grants.

The biggest hurdles include stricter lending criteria, limited credit history, and saving for a deposit. This is where Mortgage Brokers Newcastle can help—by matching students with lenders who offer flexible loan options and guiding them through the approval process. With the right strategy and expert support, homeownership isn’t just a dream for students—it can be a reality.

Let’s explore how students can successfully apply for a home loan.

What Are Home Loans for Students?

Home loans for students are specifically designed to help various types of students in Newcastle—including university students, international students, and vocational trainees—take their first steps into homeownership. 

These loans bridge the gap for those with limited income, savings, or even irregular earnings by offering flexible terms to make repayments manageable.

Unlike traditional mortgage loans, student home loans are tailored to the unique financial situations students face. They may include features like longer repayment periods or lower initial payments, all aimed at reducing the financial strain on students balancing studies with limited household income.

Can International Students Avail Home Loans?

While most Australian banks have strict requirements for non-residents, some lenders offer home loans to international students in NSW under specific conditions. Eligibility depends on visa type, income stability, deposit size, and Foreign Investment Review Board (FIRB) approval.

Who Can Apply for Home Loans?

• Temporary Visa Holders (Subclass 485, 491, 494, 482)  – May qualify for loans with a 20-30% deposit, stable income, and lender approval. FIRB approval is often required unless purchasing with an Australian citizen or permanent resident.
• Permanent Residents & New Zealand Citizens (Subclass 189, 190, 191, SCV 444)  – Eligible for standard home loans, often with access to government grants like the First Home Owner Grant (FHOG) in NSW.
• Student Visa Holders (Subclass 500)  – Generally not eligible for home loans from major banks. Some private lenders may consider applications, but they typically require a 30-40% deposit and FIRB approval.

International students should consult a mortgage broker to explore their options, understand FIRB regulations, and find lenders willing to approve non-resident applications.

What Are the Home Loans Available for Students with Broker Support?

While most lenders prefer borrowers with full-time income, students in NSW can still qualify for a home loan under specific conditions. Options vary based on citizenship, income stability, and deposit size. Here are the most relevant loan types:

Guarantor Home Loans

With a guarantor loan, a parent or close relative can use their property as security, allowing students to borrow with little to no deposit and avoid Lenders Mortgage Insurance (LMI). This is the most accessible option for students with limited savings.

Low Deposit Home Loans

With low deposit loans, some banks accept a 5-10% deposit, but students must have a steady part-time or casual income. LMI is required unless a guarantor is involved. Eligible first-home buyers may qualify for the First Home Guarantee (FHG), allowing them to purchase with just a 5% deposit and no LMI (NHFIC).

First Home Buyer Loans & Government Grants

Australian student citizens and permanent residents may access:

• First Home Owner Grant (FHOG) NSW – $10,000 for purchasing a new home under $750,000.
• First Home Buyer Assistance Scheme – Stamp duty exemptions for homes under $800,000 and concessions for properties up to $1 million. 
• Joint or Shared Home Loans  – Students can buy property with a family member or partner, sharing repayments and ownership. While the NSW Shared Equity Home Buyer Helper supports single parents and key workers, students must apply for private joint loans instead.
• Specialist Lender Home Loans  – Some non-bank lenders offer flexible home loans for students, but interest rates are higher, and stricter conditions apply.

Important Notes for International Students

• International students on a Subclass 500 visa typically cannot access home loans from major banks.
• Some private lenders may offer loans, but they require a 30-40% deposit and FIRB approval (FIRB).
• Government grants are only available to Australian citizens and permanent residents.

A mortgage broker can help students compare lenders, explore low-deposit options, and determine eligibility for government assistance programs.

What Do Students Need to Avail a Home Loan?

Students can qualify for a home loan, but lenders have strict requirements to ensure financial stability. Here’s what students need to apply successfully:

• Stable Income – Lenders require proof of consistent part-time or casual income. If applying with a guarantor or co-borrower, their income will also be assessed.
• Minimum Deposit – Most lenders require a 5-20% deposit. Students using a guarantor home loan may qualify with little to no deposit, while those using the First Home Guarantee (FHG) can buy with just 5% and no LMI.
• Good Credit History – A strong credit score improves approval chances. Students with limited credit history can build their score by managing bills and small credit accounts responsibly.
• Loan Pre-Approval – Before house hunting, students should obtain pre-approval, which confirms how much they can borrow based on income and financial history.
• Acceptable Property Type – Most lenders prefer standard residential properties, such as houses, townhouses, and apartments. Off-the-plan properties or high-density apartments may have restrictions.
• Required Paperwork – Students must provide:
• Proof of Income (Payslips, tax returns, bank statements)
• Identification (Passport, driver’s license)
• Credit Report
• Loan Application Form

For international students, FIRB approval and a higher deposit (30-40%) are usually required. Mortgage brokers can assist in finding lenders that offer student-friendly home loans and help streamline the process.

How to Apply for a Student Home Loan

Applying for a student home loan requires careful planning, as lenders assess financial stability, deposit size, and repayment ability. Here’s a step-by-step guide to improve your chances of approval:

1. Assess Your Financial Situation

Lenders check your income, credit score, and expenses to determine if you can handle mortgage repayments. If your income is low, a guarantor or co-borrower may be needed

💡Practical Tip: Reduce existing debts and maintain a steady part-time job to improve your loan eligibility.

2. Save for a Deposit

Most lenders require a 5-20% deposit, though some government schemes like the First Home Guarantee (FHG) allow eligible first-home buyers to purchase with just 5% and no LMI. A guarantor home loan can help students buy with little to no deposit

💡Practical Tip: Open a high-interest savings account to grow your deposit faster.

3. Check Your Eligibility for Government Grants

If you're an Australian citizen or permanent resident, you may qualify for the First Home Owner Grant (FHOG) NSW ($10,000 for new homes) and stamp duty exemptions under the First Home Buyer Assistance Scheme

💡Practical Tip: Visit Revenue NSW to check if you meet the grant criteria before applying.

4. Get Pre-Approval from a Lender

Pre-approval confirms how much you can borrow and strengthens your position when making an offer on a property. Lenders review your income, deposit, and credit history before issuing conditional approval

💡Practical Tip: Work with a mortgage broker to compare lenders and find the best student-friendly loan options.

5. Choose the Right Home Loan

Interest rates, loan features, and repayment flexibility vary by lender. Students should consider fixed-rates vs. variable-rates, offset accounts, and repayment options to find the best loan structure

💡Practical Tip: Ask about additional repayment options to pay off your loan faster when your income increases.

6. Submit Your Loan Application & Await Final Approval

Once you find a property, submit your loan application, proof of income, deposit details, and identification. The lender will conduct a property valuation and, if everything checks out, issue formal loan approval

💡Practical Tip: Double-check your documents to avoid delays in the approval process.

With the right approach and expert guidance, students can successfully apply for a home loan and start their journey to homeownership.

FAQs

Can students get a home loan with limited income?

Yes, lenders may consider part-time work, scholarships, and grants as income sources.

What’s the minimum deposit for student home loans?

Generally, a 5% to 10% deposit is required, though government schemes may reduce this.

Are international students eligible for home loans?

Yes, but international students need FIRB approval and may face additional requirements.

Can student loan debt affect home loan eligibility?

Yes, outstanding student debt may impact your borrowing capacity.

What types of loans are best for students in Newcastle?

Basic home loans, interest-only, and government-backed loans are popular choices.

How does a variable-rate loan work for students?

With a variable-rate loan, your interest rate fluctuates based on market conditions, which can lead to changes in monthly payments.

Can I get government assistance as a student homebuyer?

Yes, some students qualify for schemes like the First Home Buyer Guarantee, reducing upfront costs.

Conclusion

Owning a home as a student in 2025 may seem ambitious, but with the right loan options, government grants, and expert support, it’s more achievable than ever. Whether you’re using a guarantor loan, a low deposit scheme, or first-home buyer assistance, understanding your options is key to making informed decisions.

If you're ready to take the next step, Mortgage Brokers Newcastle offers a free consultation to explore your options and find the best path to homeownership. Contact Mortgage Brokers Newcastle by calling 02 4920 6468 to speak with our experienced brokers and get started on the path to your homeownership dream - even while studying!