Buying your first home in Australia is one of the biggest financial decisions you'll ever make. With property prices, government grants, and lending criteria constantly evolving, it pays to have a clear roadmap before you start inspecting properties.
Understanding Your Borrowing Power
Before you start browsing listings, you need to know how much you can realistically borrow. Lenders assess your borrowing capacity based on your income, existing debts, living expenses, and credit history. A mortgage broker can run these numbers across 50+ lenders to find where you'll get the best result — not just the lowest rate, but the right loan structure for your situation.
Most first home buyers are surprised to learn that different lenders can offer vastly different borrowing amounts for the same applicant. That's because each lender uses their own serviceability calculator, and some are significantly more generous than others.
"The difference between the right and wrong lender for a first home buyer can be tens of thousands of dollars in borrowing capacity. That's the difference between missing out and getting the keys."
Government Grants & Schemes You Should Know About
The Australian Government and state governments offer several schemes designed to help first home buyers get into the market sooner. Here are the key ones to be aware of:
Key First Home Buyer Schemes
A one-off grant for eligible first home buyers purchasing or building a new home. The amount varies by state — from $10,000 in NSW and Victoria, up to $30,000 in Queensland and Tasmania, and $50,000 in the Northern Territory. Note: this grant applies to new homes only, not established properties.
Part of the Home Guarantee Scheme, this allows eligible first home buyers to purchase with as little as a 5% deposit without paying Lenders Mortgage Insurance (LMI). The government acts as guarantor for up to 15% of the loan, potentially saving you thousands upfront.
Most states offer reduced or zero stamp duty for first home buyers under certain property value thresholds. The savings vary significantly by state and property price — check your state revenue office for current thresholds and concession amounts.
Lets you withdraw eligible voluntary super contributions (up to $50,000 in total, capped at $15,000 per financial year) to put towards your first home deposit, with tax advantages along the way. Contributions must have been made from 1 July 2017 onwards.
How Much Deposit Do You Actually Need?
The traditional advice is to save a 20% deposit to avoid paying Lenders Mortgage Insurance. However, that's not always realistic — especially in Sydney where the median house price now sits around $1.6 million, or Melbourne where it's approaching $1 million.
The good news is that many first home buyers purchase with as little as 5% deposit. With the First Home Guarantee, you can avoid LMI entirely on properties up to the relevant price cap in your state. Even without the guarantee, LMI can often be capitalised into the loan so you don't need to pay it upfront.
Don't forget to budget for additional costs beyond the deposit — stamp duty (if applicable), conveyancing fees, building and pest inspections, loan application fees, and moving costs can add up. It's wise to set aside a buffer on top of your deposit to cover these expenses.
Getting Pre-Approved: Your Secret Weapon
A pre-approval (also called conditional approval) tells you exactly how much a lender is willing to lend you before you make an offer. In competitive Australian markets, sellers and agents take pre-approved buyers more seriously — it shows you're genuine and ready to move.
Pre-approval typically lasts 3–6 months and involves a full credit assessment. Your broker can help you secure this quickly, often within a few business days, so you're ready when the right property comes along.
What Happens on Settlement Day?
Settlement is the day ownership officially transfers to you. Your conveyancer or solicitor handles the legal side, your lender releases the funds, and the seller hands over the keys. In most states, settlement occurs 30–90 days after you sign the contract, though this can vary depending on the terms you agree to.
Before settlement, you'll do a final inspection to make sure the property is in the same condition as when you signed. After that, it's time to pick up the keys and celebrate — you're officially a homeowner.
Next Steps
Every first home buyer's situation is different. Whether you're just starting to save, ready to make an offer, or somewhere in between, the right advice at the right time can make a real difference to the outcome.
At Best Option Loans, we specialise in helping first home buyers across Australia navigate the process from pre-approval to settlement. Our brokers have access to 50+ lenders and can help you understand which grants and schemes you may be eligible for.
Disclaimer: This article provides general information only and does not constitute financial advice. Your personal circumstances may differ, and government schemes, eligibility criteria, and property price thresholds are subject to change. We recommend speaking with a qualified mortgage broker or financial adviser before making any financial decisions. Best Option Loans Pty Ltd holds an Australian Credit Licence and is a member of the MFAA.
