Why first home buyers often get better interest rates on new builds

If you’re a first home buyer with a 10% deposit, you’d usually expect to be paying a higher interest rate.

That’s typically how it works when buying an existing home. With less than a 20% deposit, you’re often outside of the bank’s best pricing, and in some cases, you may also be charged a low equity margin on top.

But when it comes to buying a new build, things can look quite different

The reason comes down to how banks assess lending on new builds compared to existing properties.

New builds are exempt from the Reserve Bank’s Loan-to-Value Ratio (LVR) and Debt-to-Income (DTI) restrictions. This gives banks more flexibility in how they approve loans and how they price them.

In practice, that often means first home buyers can access sharper interest rates on a new build, even with a smaller deposit.

We’re also seeing banks offer:

• More competitive fixed interest rates 

• Better cashback contributions 

• Greater flexibility around how the lending is assessed 

For many buyers, this can make a meaningful difference to weekly repayments and overall affordability.

It’s one of those advantages of new builds that doesn’t get talked about enough

In the current market, it can genuinely shift what’s achievable for first home buyers.

When you combine that with the usual benefits of a new home, like lower maintenance, modern design, and fewer unexpected costs, buying a new build starts to stack up as a very strong option.

If you’re weighing up buying an existing home versus building new, it’s well worth running the numbers both ways. You might be surprised where things land.

If you’d like to learn more about the process, you can download our Guide to Building New.

Keen to talk to an expert? Get in touch with us today and let’s chat about your options.