First Option Bank Home Loans: The 2026 Review

First Option Bank was established with the vision of providing a community-owned banking alternative in Melbourne, Victoria. As an Authorised Deposit-Taking Institution (ADI) regulated by APRA, it has grown by focusing on customer service and digital accessibility. The bank's independence from the Big 4 banks allows it to tailor its services to meet the unique needs of its members, ensuring a personalised banking experience.

Today, First Option Bank stands as a customer-centric institution, offering a range of financial products and services. With a delivery model that includes both physical branches and comprehensive online banking solutions, it caters to a diverse customer base. The bank differentiates itself through competitive home loan offerings, featuring 100% offset accounts, free redraw facilities, and no application fees, all designed to enhance financial flexibility for borrowers.

First Option Bank primarily targets Australian home loan borrowers, focusing on providing affordable and flexible financial solutions. Its competitive interest rates, ranging from 5.24% to 5.94%, make it an attractive option for those seeking cost-effective borrowing. By emphasising digital convenience and community engagement, the bank aims to serve customers nationwide, maintaining a strong presence in the Australian financial landscape.

• Legal Name: First Option Bank Ltd
• ABN: 95087650735
• Headquarters: Melbourne, Victoria
• Type: Authorised Deposit-Taking Institution (ADI)
• Ownership: Independent

• Website: https://firstoptionbank.com.au

First Option Bank offers home loan products with features designed for flexibility and affordability, including a 100% offset account and no application fees, making it an attractive choice for cost-conscious borrowers.

• Redraw Facility: The redraw facility allows borrowers to access extra repayments they have made on their loan. This feature provides financial flexibility by enabling access to additional funds when needed without having to apply for a new loan.
• Extra Repayments: Borrowers can make extra repayments without incurring fees, including for Buy Now Pay Later (BNPL) or line of credit options. This feature helps reduce the principal faster, saving on interest over the life of the loan.
• Offset Account: A 100% offset account can be linked to the home loan, reducing the interest payable by offsetting the loan balance with the account balance. This feature helps in lowering overall interest costs, providing significant savings.
• No Application Fees: First Option Bank does not charge any application fees, reducing upfront costs for borrowers. This makes it a cost-effective option for those looking to minimise initial expenses associated with securing a home loan.
• Competitive Interest Rates: With interest rates ranging from 5.24% to 5.94%, First Option Bank provides competitive options in the market. These rates help borrowers manage their repayments effectively, offering affordability over the loan term.
• Digital Banking Features: The bank offers robust online banking features, including mobile app access and automated valuations. These digital solutions provide convenience and ease of managing loans from anywhere in Australia.
• Email and SMS Notifications: Borrowers receive timely updates and reminders through email and SMS notifications. This feature ensures that borrowers stay informed about their loan status and any important changes or updates.
• Flexible Repayment Options: First Option Bank provides various repayment options, including different payment frequencies and interest-only periods. This flexibility allows borrowers to tailor their repayment schedule to suit their financial situation.

First Option Bank offers a transparent fee structure with no application fees, making it appealing for cost-conscious borrowers. However, potential borrowers should review specific fees that may apply depending on the product chosen.

• Loan Administration Fee: $250 - Charged for the administration of the loan, applicable across most products.
• Government Fees and Charges: $0 - Stamp duties and other government costs depend on the property's value and state regulations.
• Package Home Loan Annual Fee: $375 (Annual) - An annual fee for maintaining package home loans, providing additional features and benefits.
• Mortgage Discharge Fee: $175-$600 - Calculated at the time of discharge, with a maximum of $600, applicable when closing the loan.
• Security Substitution Fee: $250 - Charged when substituting the security on an existing loan.
• Investment Loan Administration Fee: $400 plus costs - Applicable to investment loans, covering administration and additional costs.
• Title Production Fee: $150 - Charged for the production of the property title documents.
• Contract Variation Fee: $150 - Applies when making changes to the loan contract terms.

First Option Bank provides home loans to Australian residents who meet specific eligibility criteria, offering competitive rates and flexible financial solutions.

• Must be at least 18 years old.
• Must be an Australian resident.
• Applicant must be a natural person, not a legal entity.
• Stable income and employment history required to demonstrate repayment ability.
• Good credit history is typically required, though specific criteria may vary.
• Loan-to-Value Ratio (LVR) up to 95% may be available with certain products, subject to conditions.
• Minimum deposit requirements may vary, with some products accepting a 5% deposit if a guarantor is involved.

• Lenders Mortgage Insurance (LMI) may be required for loans with an LVR above 80%.
• First home buyers may have access to specific programs or benefits, subject to eligibility.
• Potential borrowers should contact First Option Bank directly for detailed information on specific product eligibility and conditions.