Buying your first home is exciting and overwhelming in equal measure. This guide cuts through the noise — no jargon, no sales pitch — so you know exactly where you stand and what to do next.
Step 1 — Know Your Numbers
Before you look at a single listing, you need two figures: how much you can borrow and how much you need to save. These are not the same thing, and confusing them is the most common mistake first home buyers make.
Use our Affordability Calculator to get a realistic borrowing estimate based on your actual income, expenses, and the current interest rate environment. The calculator shows you both a conservative and a stretch figure, which is more honest than most bank calculators.
Step 2 — How Much Deposit Do You Actually Need?
The headline number is 20% — that is the threshold below which you pay Lenders Mortgage Insurance (LMI). But 20% is not a hard requirement. You can buy with as little as 5% deposit under certain government schemes (more on that below).
LMI protects the lender, not you. It is a one-off premium rolled into your loan or paid upfront. Whether it makes sense to pay it depends on your timeline — if property in your target suburb is rising faster than you can save, getting in earlier with LMI can be the right call.
Step 3 — Government Schemes Worth Knowing
First Home Guarantee (FHBG)
The federal government guarantees up to 15% of the purchase price for eligible buyers with a 5% deposit, so you avoid LMI entirely. There are 35,000 places per financial year. Income caps apply: $125,000 for individuals, $200,000 for couples (as of 2025). Property price caps vary by state and metropolitan vs. regional status.
First Home Owner Grant (FHOG)
A cash grant for buyers of new or substantially renovated homes. The amount varies by state — $10,000 in NSW, $20,000 in QLD for regional areas, up to $30,000 in WA for remote areas. Established properties generally don't qualify. Always check your state revenue office for current limits as these are updated regularly.
Stamp Duty Concessions
Every state offers some form of stamp duty relief for first home buyers, ranging from partial discounts to full exemptions below certain price thresholds. Use our Stamp Duty Calculator to see exactly what applies in your state and at your target price point.
First Home Super Saver (FHSS)
You can contribute voluntarily to your superannuation and later withdraw up to $50,000 (from 2024) for a first home deposit. The tax benefit comes from contributions being taxed at 15% inside super rather than your marginal rate. The application process runs through the ATO — allow at least 4–6 weeks.
Step 4 — Get Pre-Approved
A pre-approval (also called conditional approval or approval-in-principle) tells you what a specific lender will lend you, subject to a satisfactory property valuation. It is not a guarantee, but it gives you confidence to bid at auction and shows sellers you are serious.
Pre-approvals typically last 90 days and require payslips, tax returns, bank statements, and ID. A mortgage broker can submit to multiple lenders simultaneously, which saves time and protects your credit score (too many applications in a short window can hurt your score).
Step 5 — Understand the True Cost of Buying
The purchase price is just the start. Budget for all of these before you sign anything:
- Stamp duty — typically 3–5% of purchase price (use our calculator for exact figures)
- Conveyancing / legal fees — $1,500–$3,000 for a solicitor or conveyancer
- Building and pest inspection — $400–$800, non-negotiable for established homes
- Lender fees — application fee, valuation fee, mortgage registration (varies by lender)
- Moving costs — $1,000–$5,000 depending on distance and volume
- Initial repairs and setup — budget at least $2,000–$5,000 for immediate needs
As a rule of thumb, allow 5% of the purchase price for all upfront costs combined. If you are in VIC or NSW where stamp duty is highest, this is closer to 6–7% without a first home buyer concession.
Step 6 — What Happens at Auction vs. Private Treaty
In Australia, homes are sold either at auction or by private treaty (negotiated sale). In Sydney and Melbourne, auctions dominate — especially for established houses. In Queensland and WA, private treaty is more common.
At auction, there is no cooling-off period. You must have your finance ready, your building inspection done, and your contract reviewed by a solicitor before bidding. If you win, you sign and exchange contracts on the day with a 10% deposit cheque.
Private treaty sales typically have a 5-business-day cooling-off period in most states, giving you time to arrange inspections and finance after exchanging contracts.
Key Takeaways
- Calculate your borrowing capacity before you start looking
- Check which government schemes you qualify for — they can save tens of thousands
- Budget 5–7% of the purchase price for upfront costs beyond the deposit
- Get a pre-approval in place before inspecting properties seriously
- Always get a building and pest inspection, even if the market feels hot
- A mortgage broker is free to you and can access dozens of lenders