First Home Buyers Guide for Australia
Navigate your property purchase journey with confidence. Understand deposits, loans, government support, and the complete home buying process.
Important Disclosure
Indicative only. Not financial advice or loan approval. Credit assistance provided by Ding Financial (Credit Representative 517980) under Australian Credit Licence 222640 (Global Mutual Funds Pty Ltd).
All rates, comparisons, and calculations shown on this website are indicative estimates only and subject to full assessment by licensed brokers. Actual loan approval and terms depend on comprehensive credit evaluation per NCCP Act requirements.
Starting Your Home Ownership Journey
Purchasing your first home is an exciting milestone, but the process can seem overwhelming. This comprehensive guide will help you understand the key steps, financial requirements, and support available to first home buyers in Australia.
Whether you're saving for a deposit, researching home loans, or ready to start searching for properties, understanding the fundamentals will help you make informed decisions aligned with your circumstances and goals.
Your Home Buying Journey: 6 Key Steps
Save Your Deposit
Most lenders require a deposit of at least 5-20% of the property's purchase price. A larger deposit (20% or more) typically provides access to more competitive loan options and avoids Lenders Mortgage Insurance (LMI). Start by setting a savings goal and exploring your deposit sources.
Understand Your Borrowing Capacity
Your borrowing capacity depends on your income, expenses, existing debts, and credit history. Use our indicative calculator to explore potential loan amounts, or speak with a licensed Ding Financial broker for a full assessment.
Get Pre-Approval
Pre-approval (also called conditional approval) indicates how much a lender may be willing to lend you, subject to property valuation and final assessment. This helps you search for properties within your budget and shows sellers you're a serious buyer.
Search for Your Property
Armed with pre-approval, you can confidently search for properties within your budget. Consider location, property type, condition, future growth potential, and proximity to work, schools, and amenities. Don't rush—take time to find the right fit.
Make an Offer & Finalize Approval
Once you find your ideal property, make an offer (through auction or private treaty). After your offer is accepted, the lender will conduct a property valuation and complete their final assessment. Your broker will guide you through this stage.
Settlement & Moving In
Settlement is when ownership officially transfers from the seller to you. Your conveyancer or solicitor will handle the legal aspects, and your lender will provide the funds. After settlement, you receive the keys and can move into your new home!
Understanding Loan-to-Value Ratio (LVR)
The Loan-to-Value Ratio (LVR) is the loan amount expressed as a percentage of the property's value. It's a crucial factor in your home loan application.
LVR = (Loan Amount ÷ Property Value) × 100
Example: $400,000 loan on a $500,000 property = 80% LVR
LVR ≤ 80% (20%+ deposit)
- • No Lenders Mortgage Insurance (LMI)
- • Access to more competitive loan options
- • Broader lender choice
- • Potentially lower interest rates
LVR > 80% (deposit <20%)
- • Lenders Mortgage Insurance (LMI) typically required
- • LMI protects the lender, not you
- • Can add thousands to loan costs
- • May still be worthwhile to enter market sooner
Note: Some government schemes and lender programs allow LVRs up to 95% for eligible first home buyers. A licensed broker can help you explore available options for your situation.
Government Support for First Home Buyers
The Australian Government and state governments offer various schemes to help first home buyers enter the property market. Eligibility criteria and benefits vary by scheme and location.
First Home Guarantee (FHBG)
The Federal Government's First Home Guarantee helps eligible first home buyers purchase a home with a deposit as low as 5%, without paying Lenders Mortgage Insurance (LMI).
Subject to property price caps, income limits, and eligibility criteria. Places are limited each financial year.
First Home Saver Accounts
The First Home Super Saver Scheme (FHSSS) allows eligible first home buyers to save for a deposit inside their superannuation fund, benefiting from tax advantages.
You can contribute up to $15,000 per year (up to $50,000 total) and later withdraw these contributions (plus earnings) for your first home deposit.
First Home Owner Grant (FHOG)
Various states and territories offer First Home Owner Grants for eligible buyers purchasing or building a new home. Grant amounts and eligibility vary by state.
Check your state or territory government website for current FHOG details, as schemes and amounts differ across Australia.
Stamp Duty Concessions
Many Australian states offer stamp duty concessions, exemptions, or reductions for eligible first home buyers, potentially saving thousands of dollars.
Eligibility and concession amounts vary significantly by state. Check with your state revenue office or speak with your broker.
Important: Government schemes have specific eligibility criteria, income limits, and property price caps. A licensed Ding Financial broker can help determine which schemes you may be eligible for and guide you through the application process.
Costs Beyond Your Deposit
Many first home buyers focus on saving their deposit but forget about additional upfront and ongoing costs. Budget for these expenses to avoid surprises:
Upfront Costs:
- •Stamp Duty: State government tax on property purchases (can be substantial; concessions may apply for first home buyers)
- •Conveyancing/Legal Fees: Costs for legal property transfer (typically $1,500-$3,000)
- •Building & Pest Inspections: Professional property inspections before purchase (typically $400-$800)
- •Lender Fees: Application fees, valuation fees (varies by lender)
- •Lenders Mortgage Insurance (LMI): If your LVR exceeds 80% (can be thousands of dollars)
- •Moving Costs: Removalists, utility connections, address changes
Ongoing Costs:
- •Mortgage Repayments: Principal and interest (or interest-only) payments
- •Council Rates: Local government charges (typically quarterly)
- •Water Rates: Water usage and sewerage charges
- •Strata/Body Corporate Fees: If purchasing an apartment or townhouse
- •Home & Contents Insurance: Protect your property and belongings
- •Maintenance & Repairs: Budget 1-2% of property value annually
10 Tips for First Home Buyers
Start Saving Early
The sooner you start saving, the faster you'll reach your deposit goal. Consider high-interest savings accounts and cut unnecessary expenses.
Check Your Credit Score
A good credit score improves your loan approval chances and may provide access to more competitive rates. Check it early and fix any issues.
Research Suburbs Thoroughly
Consider growth potential, proximity to transport, schools, employment hubs, and amenities. Visit at different times of day and week.
Get Professional Advice
Speak with licensed brokers, conveyancers, and financial advisors. Their expertise can save you time, money, and stress.
Don't Overextend Yourself
Just because you can borrow a certain amount doesn't mean you should. Consider lifestyle, future plans, and financial buffer.
Understand All Loan Features
Compare interest rates, fees, offset accounts, redraw facilities, repayment flexibility, and whether rates are fixed or variable.
Factor in Interest Rate Rises
Ensure you can afford repayments if interest rates increase. Lenders assess your ability to service loans at higher rates.
Be Patient
Don't rush into a purchase. Take time to find the right property at the right price. Emotional decisions can be costly.
Get Pre-Approval Before Searching
Know your budget before falling in love with properties. Pre-approval gives you confidence and negotiating power.
Inspect Properties Thoroughly
Always conduct building and pest inspections. A few hundred dollars can save you from purchasing a property with major defects.
How Ding Financial Can Help
Licensed Expertise
Work with licensed credit representatives authorised under Australian Credit Licence 222640, ensuring compliant and professional service.
Lender Comparison
We compare options from multiple lenders to help you explore competitive alternatives suited to your circumstances and goals.
End-to-End Support
From initial consultation to settlement, we guide you through every step of the first home buying process with clarity and confidence.
Ready to Start Your Home Ownership Journey?
Explore indicative loan options or speak with a licensed Ding Financial broker about your first home purchase.
Important Disclosure
Indicative only. Not financial advice or loan approval. Credit assistance provided by Ding Financial (Credit Representative 517980) under Australian Credit Licence 222640 (Global Mutual Funds Pty Ltd).
All rates, comparisons, and calculations shown on this website are indicative estimates only and subject to full assessment by licensed brokers. Actual loan approval and terms depend on comprehensive credit evaluation per NCCP Act requirements.