Most big financial decisions are tied to a life event: buying a first home, having children, paying for schooling, changing careers or winding down towards retirement. Each one changes your income or spending, and each is a natural point to check how your home loan, superannuation and insurance fit together. This guide walks through the common milestones and the questions worth asking at each.
Buying your first home
Start by understanding what you can realistically borrow. Lenders assess your income, living expenses, existing debts and credit history, and each applies its own policy, so the amount one approves can differ from another.
- Deposit: many lenders look for around 20 per cent of the purchase price to avoid lenders mortgage insurance, although smaller deposits are possible with insurance or through the Australian Government 5% Deposit Scheme (formerly the Home Guarantee Scheme) if you are eligible.
- Upfront costs: budget for stamp duty (less any first home buyer concessions in your state), conveyancing, building and pest inspections, loan establishment fees and moving costs.
- Ongoing costs: council rates, strata levies, insurance and maintenance all sit on top of your repayments.
- Pre-approval: a conditional pre-approval gives you a clear limit while you shop, though the lender still needs to value the property and approve the final application.
Our calculators can help you test repayments and stamp duty, and our first home buyer page explains the process from pre-approval through to settlement.
Growing your family
A new baby usually means a period of reduced household income, followed by childcare costs that can rival a mortgage repayment. Planning ahead makes the adjustment easier.
- Build a buffer: aim to set aside several months of living expenses. Holding that buffer in an offset account linked to your home loan reduces the interest charged while keeping the money available.
- Review your insurance: life, total and permanent disability and income protection cover are commonly held through superannuation, with premiums deducted from your balance. Default cover may be lower than you would choose, and it can end if your account becomes inactive or the balance falls below a threshold, so check what each parent actually holds.
- Review the loan structure: if one income is pausing, check whether your repayment type, fixed or variable split and offset or redraw arrangements still suit the household.
Planning for education costs
Australia does not have a dedicated education savings account in the way some other countries do, so most families use ordinary tools. A separate savings account, or an offset account attached to the home loan, lets you set money aside while keeping it accessible. If you have made extra repayments, a redraw facility may also let you draw on those funds, depending on your loan terms. Start early, work backwards from the first year fees fall due, and allow for fees to rise each year.
Changing careers or starting a business
A career change can be a positive move, but timing matters if you plan to borrow. Lenders generally want stable income, so a new permanent role in the same field is viewed differently from a move to contracting or self-employment. Many lenders want an established ABN and one or two years of financials before they consider business income, although specialist lending options exist for people outside standard policy. If a loan is on the horizon, it is often simpler to settle the finance first and change roles afterwards. For equipment, vehicles or working capital in an existing business, see our asset finance and commercial finance pages.
Preparing for retirement
Superannuation is the foundation of most Australians’ retirement planning. Your employer pays compulsory contributions into your fund, and you may be able to add more through salary sacrifice or personal after-tax contributions. Contribution caps apply and the rules change, so speak with a licensed financial adviser or check the ATO website before adding extra.
From a lending perspective, the key question is how your home loan will be repaid before or during retirement. Lenders ask older borrowers to show a realistic exit strategy, such as superannuation, downsizing or selling an investment property. If you are refinancing in your fifties or sixties, expect the question and have an answer ready. Review the insurance inside your super as well: default life and TPD policies typically end at set ages, and premiums reduce your balance when there is less time to recover.
Reviewing your home loan at every milestone
Each of these events is a good reason to review your loan. Ask whether the rate is still competitive, whether an offset or redraw facility is being used well, whether the fixed and variable mix still suits you, and whether the structure supports your next goal. Sometimes the answer is a repricing request to your current lender; sometimes it is refinancing to a product that fits better. Lenders charge for offset features in different ways, so compare fees as well as the rate.
Talk to a broker before the next milestone
Oakwood Finance Pty Ltd arranges credit as Credit Representative 561236 of Finsure Finance & Insurance Pty Ltd, Australian Credit Licence 384704. We work with a panel of lenders to help you structure finance around your stage of life, and the lender assesses and approves each application.
To talk through an upcoming life event, book a consultation or contact our team. This article is general information only and does not take your objectives, financial situation or needs into account.