First Home Buyer Advice: What You Need to Know

Start With Your Budget, Not Your Wishlist

Your first home buyer budget determines everything that follows. Before you browse properties or talk to agents, you need to know what you can borrow and what you can afford to repay.

In our experience, many buyers come in with a deposit amount in mind but haven't worked through the ongoing costs. Consider a buyer who has saved $60,000 and wants to purchase at $600,000. That 10% deposit looks solid, but they also need to account for stamp duty (or confirm they qualify for concessions), legal fees, building inspections, and moving costs. Once we run the numbers, their comfortable borrowing ceiling might be closer to $550,000, which changes the property search entirely.

Understanding your borrowing capacity before you fall in love with a property saves you from disappointment. It also tells you whether you need to consider low deposit options or wait and save more.

Government Concessions That Actually Change the Numbers

First home buyer stamp duty concessions and grants can reduce your upfront costs by thousands of dollars. Each state offers different schemes, so what applies depends on where you're buying.

In Victoria, for instance, eligible buyers purchasing a property valued under the threshold receive full or partial stamp duty exemptions. In New South Wales, concessions apply up to a higher purchase price. Queensland offers both concessions and cash grants depending on whether you're building or buying established. These aren't minor adjustments, they can shift tens of thousands of dollars from upfront costs into your deposit or offset account.

The First Home Loan Deposit Scheme and Regional First Home Buyer Guarantee are federal programs that let you borrow with a 5% deposit without paying Lenders Mortgage Insurance (LMI). There's a cap on how many spots are available each year, and they fill quickly. If you're considering a property outside a capital city, the regional scheme often has more availability and higher property price caps.

How Low Deposit Options Actually Work

You don't need 20% saved to apply for a home loan. Low deposit options, including 5% deposit and 10% deposit scenarios, are common for first home buyers.

When you borrow with less than 20%, you'll typically pay LMI unless you qualify for one of the government guarantee schemes. LMI protects the lender if you default, and it can cost anywhere from a few thousand to over $10,000 depending on your loan size and deposit. Some lenders let you add this to your loan amount rather than paying it upfront.

A gift deposit from family can also top up your savings. Lenders usually require a letter confirming the funds are a gift, not a loan, and you'll need to show at least some genuine savings of your own. As an example, a buyer with $35,000 saved and $15,000 gifted from parents can use the full $50,000 as their deposit on a $500,000 purchase. The lender will assess the application based on your income and expenses, not your parents', so the gift doesn't affect your borrowing power, it just reduces the deposit gap.

Fixed vs Variable: Choosing Your Interest Rate Structure

Your interest rate determines what you pay each month, and whether you lock in or stay flexible depends on your situation.

A fixed interest rate gives you certainty. You know exactly what your repayments will be for the fixed period, which makes budgeting easier. A variable interest rate moves with the market, so your repayments can go up or down. Variable loans usually come with features like an offset account or redraw facility, which fixed loans often don't.

Some buyers split their loan, fixing part and leaving part variable. This gives you rate protection on one portion while keeping access to offset benefits and extra repayments on the other. There's no universal answer, it depends on whether you value certainty over flexibility and whether you expect to make extra repayments.

Pre-Approval Sets Your Position Before You Buy

Pre-approval tells you what a lender will offer before you sign a contract. It's not a guarantee, but it's close, and it means you can make an offer with confidence.

When you apply for a home loan through a broker, we'll gather your income proof, bank statements, and expenses, then submit the application to a lender for assessment. They'll confirm how much they're willing to lend and on what terms. Pre-approval is typically valid for three to six months, depending on the lender.

This step also reveals any issues early. If your credit file has a mark you didn't know about, or your living expenses are higher than the lender allows, we find out before you're in a bidding war. In a scenario like this, we can address the problem or switch lenders before it costs you a property.

Putting Together Your First Home Loan Application

Your first home loan application needs documentation that proves your income, savings, and financial position. Lenders want to see payslips, tax returns if you're self-employed, bank statements showing your deposit, and proof of any other assets or liabilities.

We regularly see buyers who've switched jobs recently or have casual income. That doesn't disqualify you, but it does change which lenders will consider you. Some require six months in your current role, others will accept a letter from your employer confirming permanency. If you're on probation, fewer lenders are an option, but options still exist.

The application itself involves more than just submitting documents. The lender assesses your living expenses, credit history, and how much you're already committed to in other debts. They use this to calculate whether you can service the loan at a higher interest rate than what you'll actually pay, which is called the assessment rate. That's why your borrowing amount is usually lower than what an online calculator suggests.

What Happens After You Submit

Once the lender has your first home loan application, they'll review everything and either approve, request more information, or decline. Approval doesn't mean you're done, it means they're willing to lend subject to valuation and final checks.

The property valuation is where some applications stall. If the property values lower than the purchase price, the lender will only advance a loan based on the valuation, not what you're paying. That means you need to cover the gap with extra deposit or renegotiate with the vendor.

Settlement usually happens four to six weeks after contracts are signed. During that time, the lender finalises the paperwork, the solicitors handle the legal side, and you organise insurance and final inspections. Once it settles, the property is yours and your repayments begin.

Call one of our team or book an appointment at a time that works for you. We'll walk through your deposit, income, and what you're approved for, then match you with home loans that fit your situation.

Frequently Asked Questions