Taking Out a Mortgage in WA: What You Actually Need to Know

Whether you’re buying your first home, upgrading, or refinancing, the mortgage process brings up the same questions. Our plain-English rundown covers the topics you hear about most and the recent changes.

Here’s a plain-English rundown of the topics people ask us about most, and what’s changed recently that’s worth knowing.

1. How Much Can You Actually Borrow?

Your borrowing power depends on more than just your income. Lenders look at:

• Income and employment type — PAYG, self-employed, and casual income are all assessed differently
• Existing debts — credit cards, car loans, personal loans, and even undrawn credit limits reduce borrowing capacity
• Living expenses — lenders scrutinise spending habits (subscriptions, dining out, buy-now-pay-later) more closely than they used to
• The assessment rate — lenders test whether you could still afford repayments if rates rose further, not just at today’s rate

When they factor in debts and spending, two people on the same salary can have very different borrowing capacities. This is one of the most common surprises for first-time buyers.

2. Interest Rates: Where Things Stand

The Reserve Bank of Australia (RBA) held the official cash rate at 4.35% at its August 2026 meeting, after three rate rises earlier in the year. That leaves the rate on hold going into the RBA’s next scheduled review in late September. Analysts remain divided on whether another rate hike is coming or the RBA has finished tightening, creating a genuinely uncertain environment for anyone choosing between fixed and variable.

Fixed rate: Locks in your repayment for a set period (usually 1–5 years), giving certainty but less flexibility (break costs can apply if you exit early).

Variable rate: Moves with the market — you benefit if rates fall, but you carry the risk if they rise. Most variable loans also offer offset accounts and unlimited extra repayments, which fixed loans often don’t.

Split loans — part fixed, part variable — remain a popular middle ground when the rate outlook is unclear, roughly where things sit right now.

3. Deposit Size and Lenders Mortgage Insurance (LMI)

The traditional benchmark is a 20% deposit, but plenty of buyers borrow with less — it just usually means paying LMI, a one-off insurance premium that protects the lender, not you, if you default. On a $600,000 loan, LMI can run into the tens of thousands of dollars depending on your deposit size, so it’s worth factoring into your numbers early.

The Federal First Home Guarantee lets eligible first home buyers purchase with as little as a 5% deposit without paying LMI at all, with the government guaranteeing the gap up to 20%. Nationally,caps limit the number of places each financial year, so buyers should check early rather than assume a spot.

4. First Home Buyer Grants and Stamp Duty in WA

This is an area that’s shifted meaningfully in 2026, and it’s one of the most common things we field questions on:

• The First Home Owner Grant (FHOG) remains a $10,000 payment for eligible buyers purchasing or building a new home
• WA’s 2026 state budget lifted stamp duty settings for first home buyers — reporting indicates the full exemption threshold and concessional bands have both increased from where they sat previously
• Off-the-plan and vacant land concessions have also been extended and expanded

Because these thresholds have moved more than once within 2026, and further changes have been flagged as subject to Parliamentary approval, don’t rely on a figure you’ve read somewhere (including this article) without confirming the current threshold with RevenueWA or your broker before you budget around it. This is genuinely one of those areas where “current as of six months ago” isn’t good enough.

5. Loan Features Worth Understanding

• Offset account — a transaction account linked to your loan; every dollar in it reduces the interest charged, without locking your money away
• Redraw facility — lets you access extra repayments you’ve made, useful for managing cash flow
• Principal & interest vs interest-only — P&I builds equity from day one; interest-only lowers repayments short-term (common with investors) but doesn’t reduce the debt while it’s active
• Repayment frequency — fortnightly repayments (vs monthly) can shave years off a loan due to how the extra part-payment compounds

6. Pre-Approval: Why It’s Worth Doing First

Pre-approval (also called conditional approval) tells you what a lender is likely to lend before you’ve found a property. It’s not a guarantee, but it:

• Gives you a realistic budget before you start inspecting homes
• Signals to agents and vendors that you’re a serious, ready buyer
• Speeds up the process once you find the right property

Pre – Approvals typically last 60–90 days, so timing it against your house-hunting window matters.

7. Broker vs Going Direct to a Bank

Going straight to your everyday bank means you’re only seeing that bank’s products. A mortgage broker compares options across a panel of lenders, does the paperwork, and manages the back-and-forth — generally at no direct cost to you, since brokers are typically paid by the lender. The trade-off is worth understanding (which lenders are on the broker’s panel, how commission structures work), but for most borrowers it means more options and less legwork than going it alone.

8. The Full Cost Picture, Not Just the Repayment

Buyers often anchor on the headline interest rate and forget the other costs stacked around it:

• Stamp duty (unless exempt/concessional)
• Conveyancing and legal fees
• Building and pest inspections
• Loan application and valuation fees
• LMI, if applicable
• Moving costs and immediate setup (utilities connections, insurance)

Budgeting 5% on top of the deposit for these extras is a reasonable rule of thumb, though it varies by property and state.

9. Refinancing: When It’s Worth Considering

With the cash rate having moved several times in 2026, borrowers on older fixed terms or loans that haven’t been reviewed in a while may find better deals elsewhere. Refinancing can make sense when it reduces your rate meaningfully, consolidates debt sensibly, or unlocks equity for a specific purpose — but exit fees, new establishment costs, and LMI (if your equity position has changed) all need to be weighed against the benefit.