Home loans in Sydney

Prospective borrowers looking to take out a home loan in Sydney will be able to apply with the majority of lenders currently operating in the market. Notable exceptions, however, include Bank of Melbourne which only services Victoria residents, and BankSA which will only lend to South Australia residents.

Applying for a home loan in Sydney generally isn’t too different to applying for a home loan in any other Australian state or territory. With that in mind, here’s a step-by-step guide to the home loan process:

1. Have a think about your current financial situation and desired loan purpose, as well as your borrowing power and financial priorities. You’ll also want to consider what type of home loan could be most appropriate for you, along with what kinds of home loan features you could want (like an offset account or redraw facility).
2. Collate the supporting documentation you’ll need for your application. This will typically include personal ID, as well as bank statements and payslips.
3. Start comparing your options! If you compare home loans via our online home loan comparison service, we’ll show you a range of home loan products you could be eligible for.
4. Found the home loan you want to apply for? One of our expert brokers can help you complete and submit your home loan application.
5. If your home loan application goes well, the lender will give you formal home loan approval, and you’ll be good to go!

If you live in Sydney and want to refinance your home loan, the good news is that refinancing largely follows the same process regardless of which Australian state or territory you’re refinancing in. It also isn’t too different from the regular home loan application process!

Sydney first home-buyers could be eligible for the NSW First Home Buyers Assistance Scheme (a stamp duty exemption or reduction) and/or the NSW First Home Owner (New Home) Grant (a $10,000 grant).

Australian first home buyers could also potentially be eligible for the First Home Guarantee, making it possible for them to take out a home loan with only a 5% saved deposit.⁴ The Federal Government will guarantee an additional 15% for successful applicants, giving them enough of a deposit to get to a loan-to-value ratio (LVR) of at least 80%, and subsequently avoid paying lenders mortgage insurance (LMI).

You’ll want to make sure you’ve done the necessary research when it comes to the Sydney suburbs you’re thinking of buying in. Take a look at flood maps, crime rates and relevant school catchment locations, just to name a few – these and more will play a part in the long-term value and liveability of a suburb.

You can get the information you’re looking for on a given suburb with the help of our free suburb reports.

If you’re planning on buying property in Sydney, it’ll be worth making sure you understand  how stamp duty is calculated in NSW before you start seriously running the numbers on your upcoming property purchase.

It’s entirely legal for foreigners to purchase property in Sydney; however, they will likely have to pay an extra 9% in additional duty on top of their base stamp duty amount.⁵ This is called ‘Surcharge Purchaser Duty’.

According to the Reserve Bank of Australia (RBA), the average interest rate for a new, owner-occupied home loan in Australia was 5.99% as of March 2025.³ The average interest rate for new Australian investment home loans was 6.22%.

Investment home loan rates do tend to be higher than owner-occupied interest rates in general, however another factor that could explain the difference is that many investment home loans start out as interest-only home loans – which also generally come with higher interest rates.

However, during the interest-only period you’re only required to make interest repayments towards your home loan, meaning your home loan repayments will be smaller than if you were making full principal and interest repayments.

That being said, not paying anything towards your outstanding loan amount for the first few years of your loan term will typically see you pay more in interest over the full life of the loan. You could potentially counter this in part by making additional repayments towards your home loan.

And don’t forget that the lowest rate doesn’t make for a good-value home loan all by itself – make sure you take a look at the comparison rate next to any advertised home loan interest rate. The comparison rate will take upfront, ongoing and annual fees into account along with the interest rate to ballpark the ‘real cost’ of the home loan.

Based on data from the Australian Bureau of Statistics (ABS), as of March 2025, the average new owner-occupier home loan in New South Wales was $795,000.¹ A new investment home loan taken out in New South Wales was $848,000 on average.

And when it comes to home loans Compare The Market have helped to facilitate and settle for NSW residents, the average loan size in NSW settled via our online home loan service was $500,690 for new loans and $547,150 for refinances.

According to ABS data, a new house in New South Wales had an average floor area of 239.4m² as of 2021-22.⁴ This was a 2.32% decrease from 2002-03, when the average new home built in New South Wales had a floor area of 245.1m².

According to PropTrack data for April 2025, the median home in Sydney cost $1,118,000. This was higher than the capital city median value ($873,000) and the national median value ($805,000), and was the highest median property value of anywhere in Australia, backed by 2.5% year-on-year growth.⁵

Here are Sydney’s 10 cheapest suburbs by median value according to CoreLogic data – including both houses and units:⁶

According to CoreLogic, here are the 10 Sydney suburbs with the highest median property values, for both units and houses:⁶