Getting your first home loan? These are the 5 questions you need to ask.

Thanks to our brand partner, RACQ Bank

There's nothing quite as exciting and nerve-wracking as buying your first home. It's likely to be the single biggest purchase you will ever make, a fact I kept reminding myself of, which made it all the more overwhelming — especially when it came to navigating the world of home loans.

From loan jargon to government fees, there's a lot to wrap your head around. The good news? With the right questions (and a little preparation), you can tackle the process with confidence and make choices that actually fit your life. Applying for your first home loan doesn't have to be intimidating. RACQ Bank is a Queensland brand with deep local roots, and its team is all about helping home buyers cut through the noise and get the support they need — no jargon, no fuss.

Whether you're just starting to dream or are already looking through listings during your scroll, here's your step-by-step guide — plus the smart questions every first-time buyer should ask.

1. How much can I borrow, and what will repayments really cost?

Before falling in love with a new place (and that stunning kitchen splashback), it's essential to know your borrowing limits. Every lender has their own formula, but generally (although not limited to) they'll look at your income, current debts, monthly expenses and the size of your deposit to decide how much you can sensibly borrow.

Don't forget: Just because you can borrow a certain amount doesn't mean you should. Think about what repayments you'll be comfortable with making now — and into the future if interest rates rise or your circumstances change. We decided to budget for what we thought would be the peak of interest rate rises to make sure we were comfortable.

Pro tip: Hop onto a mortgage calculator early in your research. Tools like the RACQ Bank home loan calculator let you plug in different loan amounts, terms and interest rates for a quick reality check on what your repayments will look like per fortnight or month. It's a practical way to play out what's actually affordable and avoid hidden surprises down the track.

2. How does my deposit size affect loan terms and interest rates?

You've been saving for what feels like forever — but how much of a deposit is enough? Here's where the concept of Loan-to-Value Ratio (LVR) comes in. LVR is simply the percentage of your loan compared to the value of the property — so if you have a $50,000 deposit on a $500,000 home, your LVR is 90 per cent.

Why does this matter? The bigger your deposit, the lower your LVR. A lower LVR can mean:

• Better interest rates: Lenders often reserve their lowest rates for buyers with lower LVRs.

• Fewer fees: Borrow more than 80 per cent of the property value, and you'll likely need Lender's Mortgage Insurance (LMI), which can add thousands to your costs.

If you're still building your deposit, don't stress — many first-home buyers start with less than 20 per cent. But it's worth knowing that every extra $5,000 you save now could save you a lot more in fees and interest over the life of your loan.

3. What is pre-approval, and why does it matter?

Ever heard someone say they're "pre-approved" and wonder what that really means? Pre-approval (also called conditional approval) is an estimate from a lender of how much you can borrow, based on your financial information, that they would be willing to lend you up to a specified amount — though it's not a final guarantee. We found this really useful to have in hand when we were house hunting, particularly when going to auctions.

It's a big win if you're a buyer, because:

• You understand your budget: No more guessing or over-stretching — shop with confidence and laser-focus.

• You're taken seriously: Sellers and real estate agents will know you're genuinely in the market, not just browsing open homes for kitchen inspo.

• It helps with speed: Some markets move fast — pre-approval puts you in a stronger position to make an offer or bid at auction.

Pre-approval is usually valid for around 90 days (this can vary by lender). So, timing is everything; it's best to organise it when you're ready to house hunt seriously, but not so early you risk it expiring before you find your dream home.

4. What do I need to get pre-approved?

Time to talk paperwork. To get pre-approval, lenders typically want to see a range of documents (so don't leave this until the last minute):

• Proof of ID (usually a driver's licence or passport).

• Recent payslips or proof of income.

• Details of your savings and assets.

• Information on any debts or other loans you hold.

• Recent bank statements.

• A record of monthly expenses (think utilities, subscriptions, childcare).

Getting organised early can really streamline the process. Not sure where to start? Many lenders (including RACQ Bank) have lending specialists who can guide you through exactly what's needed so you're prepared — and one step closer to moving in.

5. What extra costs should I budget for?

It's easy to fixate on the deposit and repayments, but we quickly learned there are other upfront costs to pencilling in, like:

• Stamp duty or transfer duty: A government tax that varies by state and purchase price. Some first-home buyers may get concessions or exemptions, but it pays to check the rules in your state.

• Legal fees: For conveyancing and contract reviews. This ensures the paperwork is solid, and your rights are protected.

• Government and bank fees: Expect charges for loan applications and property registration.

• Lenders' Mortgage Insurance (LMI): If your deposit is under 20 per cent, you'll probably need LMI (an insurance policy that protects the bank, not you, if you can't repay).

Factor these costs in early so you're not caught short at settlement. A little planning now means less stress when you finally get those keys.

Moving from "just looking" to "offer accepted" is a journey, but with the right information — and the right support — you can get to the finish line. Good luck, and happy house hunting!

Want to learn more? Visit RACQ Bank's website.

Banking and loan products issued by Members Banking Group Limited ABN 83 087 651 054 AFSL/Australian credit licence 241195 trading as RACQ Bank. Terms, conditions, fees, charges and lending policies apply. This is general advice only and may not be right for you. This information does not take your personal objectives, circumstances or needs into account. Read the disclosure documents for your selected product or service, including the Financial Services Guide and the Terms and Conditions, and consider if appropriate for you before deciding.

Feature Image: Canva/Mamamia.

Thanks to our partner RACQ Bank, proudly trusted by Queenslanders for their banking needs. Whether it's your new savings account, a home loan, or planning for your future, RACQ Bank is here with all the products you need and genuine support to help you feel confident about your money.