Buying a first home can feel out of reach, but understanding how the pieces fit together makes it far less daunting. Here’s where to start.
How much deposit do you need?
A 20% deposit avoids Lenders Mortgage Insurance (LMI) with most lenders, but it isn’t the only path. Government schemes may allow eligible first home buyers to purchase with a much smaller deposit. We keep the current details on our first home buyers page, along with the date they were last checked.
Don’t forget the other costs
On top of your deposit, allow for:
- conveyancing or solicitor fees
- building and pest inspections
- transfer (stamp) duty, unless you qualify for an exemption or concession
- lender and government fees
- moving costs and a small buffer for surprises
Government help
Two kinds of help are commonly relevant: an Australian Government scheme that helps eligible buyers purchase with a small deposit, and the grants and transfer duty concessions run by your state or territory. Each has its own eligibility rules and property price limits, and they change from time to time, so always check the current rules.
What is pre-approval?
Pre-approval is a lender’s conditional indication of how much it may lend you. It gives you a price range to shop with and shows agents you’re serious. It isn’t a guarantee: final approval depends on the property and a full assessment.
A simple order of steps
- Get a clear picture of your savings, income and spending.
- Use our borrowing power calculator for a rough guide.
- Talk to a broker about schemes and lenders that may suit you.
- Get pre-approval, then start inspecting.
- Engage a conveyancer before you make an offer.
Questions are welcome
There are no silly questions when it’s your first time. Book a free 15-minute chat and bring as many as you like.
This article is general information only and doesn’t take your personal circumstances into account.