First Option Bank Home Loans: The 2026 Review

First Option Bank was established with the aim of providing a community-focused banking alternative to the larger, traditional banks. Although specific details about its founding year and initial milestones are not readily available, the bank has consistently emphasised its commitment to member ownership and community engagement. This approach allows the bank to reinvest profits into better services and competitive products for its members.

Today, First Option Bank operates as an independent, community-owned institution, offering banking services both online and through physical branches. The bank differentiates itself by focusing on transparency and simplicity, with a business model that avoids complex conditions and hidden fees. This member-centric approach is reflected in their competitive home loan products, which come with no application or annual fees, and offer features like free redraw facilities and the ability to make extra repayments without incurring fees.

First Option Bank targets Australian home loan borrowers who value personalised service and community involvement. By prioritising low fees and flexible loan options, the bank appeals to customers seeking straightforward and cost-effective banking solutions. Its focus on transparency and community service makes it an attractive choice for borrowers across Australia who prefer a banking partner that aligns with their values.

• Legal Name: First Option Bank Ltd
• ABN: 95087650735
• Type: Community-Owned Bank
• Ownership: Independent

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

First Option Bank offers home loan products that emphasise flexibility and cost savings, with features like no application or annual fees and a free redraw facility. Their member-focused approach ensures transparency and value, appealing to borrowers seeking straightforward and community-oriented banking solutions.

• Offset Account: An offset account can be linked to your home loan, reducing the interest payable on your loan balance. This feature allows you to save on interest costs by offsetting your loan balance with your savings, making it a valuable tool for managing your finances effectively.
• Redraw Facility: The free redraw facility allows borrowers to access extra repayments made on their home loan without incurring additional charges. This feature provides flexibility for managing unexpected expenses or financial opportunities, ensuring funds are accessible when needed.
• Extra Repayments: Borrowers can make extra repayments on their home loan without any fees, including for Buy Now, Pay Later (BNPL) or line of credit arrangements. This option enables faster loan repayment, reducing the overall interest paid and shortening the loan term.
• No Application or Annual Fees: First Option Bank's home loans come with no application or annual fees, significantly lowering the upfront and ongoing costs for borrowers. This cost-saving feature makes their products more accessible and affordable, enhancing overall value.
• Online Banking Features: Access to comprehensive online banking features allows borrowers to manage their home loan conveniently. This includes tracking repayments, viewing statements, and managing accounts, providing ease and control over financial management.
• Email and SMS Notifications: Borrowers receive email and SMS notifications to stay informed about their loan status and any important updates. This feature ensures timely communication and helps manage loan-related activities efficiently.

First Option Bank offers a transparent fee structure with no application or annual fees, focusing on reducing upfront costs for borrowers.

• Construction Loan Fee: $600 - Covers up to five progress payments to suppliers; additional payments incur a $50 fee each.
• Legal Fees: Variable - First Option covers the first $1000 of valuation and legal fees; other costs are on-charged at cost.
• Title Production Fee: $150 - Charged for the production of the property title during the loan process.
• Annual Package Fee: $375 (Annual) - Applicable to package home loans, covering various account benefits.
• Mortgage Discharge Fee: Variable (up to $600) - Calculated at the time of discharge, up to a maximum of $600.
• Security Substitution Fee: $250 - Charged when substituting the security property on a loan.
• Loan Administration Fee: $250 - Covers administrative costs associated with managing the loan.
• Loan Consent Fee: $400 - Charged when consent is required for changes to the loan agreement.

First Option Bank offers home loans to Australian residents aged 18 and over, focusing on community-driven, member-friendly services.

• Applicants must be at least 18 years old.
• Applicants must be Australian residents.
• Applicants must be natural persons, not legal entities.
• A stable income source is required to demonstrate the ability to repay the loan.
• A satisfactory credit history is necessary for approval.
• Loan-to-Value Ratio (LVR) may vary, with some products offering up to 95% LVR.
• A minimum deposit of 5% may be accepted with a guarantor for some products.

• Lenders Mortgage Insurance (LMI) may be required for loans with an LVR above 80%.
• First Option Bank offers flexibility with a free redraw facility and allows extra repayments without fees.
• Special programs may be available for first home buyers, enhancing accessibility.