Good Faith Estimate (GFE) in Australia: 2025 Guide to Home Loan Clarity

Buying a home is one of the biggest financial decisions Australians make, and understanding the true cost of a home loan can be challenging. Enter the Good Faith Estimate (GFE)—a tool designed to make the home loan process more transparent and less stressful. While the GFE has long been a staple in the U.S., Australia’s version is evolving in 2025, giving buyers a clearer view of what to expect before signing on the dotted line.

What Is a Good Faith Estimate (GFE)?

A Good Faith Estimate is a document lenders provide that outlines the expected costs associated with a mortgage. The GFE lists not just the interest rate, but also fees, government charges, and settlement costs. The goal: no nasty surprises at settlement. In Australia, the concept has gained traction as property markets heat up and regulators push for greater transparency from lenders.

• Upfront breakdown: A detailed list of fees and charges you’ll likely pay.

• Standardisation: Lenders use a consistent format, making it easier to compare offers.

• Timing: Provided early in the loan application process—well before commitment.

2025 Updates: What’s New for Australian GFEs?

This year, the Australian Securities and Investments Commission (ASIC) introduced new rules to strengthen the good faith estimate process for home loans. Here’s what stands out in 2025:

• Mandatory GFE for All Mortgages: All lenders, including non-bank and fintech providers, must now provide a standardised GFE within three business days of a formal loan enquiry.

• Clarity on ‘Junk Fees’: Lenders must clearly separate unavoidable government charges (like stamp duty) from optional or negotiable lender fees.

• Comparison Rate Enhancements: The GFE now includes an updated comparison rate, factoring in common add-on costs, not just interest.

• Digital Delivery: Borrowers can request GFEs electronically, making it easier to gather and compare estimates from multiple lenders.

For example, if you’re applying for a $750,000 home loan in Sydney, your GFE will now detail not only your base interest rate, but also application fees, valuation costs, lenders mortgage insurance, and a projection of government charges—giving you a far more accurate picture of what you’ll pay upfront and over the life of the loan.

How to Use the GFE for Smarter Home Loan Decisions

In a competitive market, knowledge is power. The GFE arms you with information you can use to:

• Compare apples with apples: Because every lender uses the same format, it’s easier to spot where one offer is truly better—or where fees are being disguised.

• Negotiate better terms: If one lender charges a high application fee, you can use another’s lower GFE as leverage in negotiations.

• Budget more accurately: With a clear estimate of upfront and ongoing costs, you’ll avoid underestimating the real financial impact of your loan.

• Spot red flags early: If a lender is slow to provide a GFE or the numbers don’t add up, it may be a sign to look elsewhere.

Case in point: Melbourne buyer Olivia received GFEs from three lenders. One included a $1,000 ‘document handling fee’ not present in the others. Thanks to the GFE, she was able to question (and ultimately avoid) the unnecessary charge—saving her money before she even settled.

Beyond the Basics: GFE and the Changing Lending Landscape

Australia’s home loan market is more dynamic than ever, with fintechs and digital banks entering the fray. The GFE levels the playing field for borrowers by:

• Reducing information asymmetry: Borrowers no longer need to rely solely on a lender’s word; the GFE puts key facts in black and white.

• Supporting digital-first applications: With digital delivery, you can compare offers from the comfort of your own home, and even use comparison platforms that aggregate GFEs in real time.

• Adapting to new loan products: As lenders introduce features like green home loans or variable offset packages, the GFE format ensures you know exactly how these products affect your bottom line.

For investors and first-home buyers alike, the GFE is a critical part of due diligence—especially as rising interest rates and evolving lending standards reshape the property landscape in 2025.

Conclusion

The Good Faith Estimate is more than paperwork—it’s your financial compass in the complex world of home loans. With the 2025 reforms, GFEs are now more transparent, standardised, and accessible than ever before. Whether you’re a seasoned investor or a first-time buyer, make sure you request and review a GFE before committing to any loan. It’s the smart way to protect your finances—and your future home.