Buying your first home is exciting…
Right up until someone says “unconditional finance”, “strata report” or “proof of savings” and you briefly wonder whether renting forever and becoming very emotionally attached to your landlord might be easier.
It is a big financial decision, particularly when there is a family to think about. But you do not need to know everything on day one. You need a clear plan, a realistic budget and enough space in that plan for the costs nobody mentions while you are admiring the kitchen bench.
This guide takes you from deposit to settlement, with the current schemes and practical checks first home buyers in Australia need to know.
In This Guide for First Home Buyers
- Before you start: what can you comfortably afford?
- 1. Work out your deposit — and the costs around it
- 2. Choose a property type that suits your life now
- 3. Get pre-approval — but understand what it is
- 4. Do your homework before you make an offer
- 5. Finalise the loan and prepare for settlement
- 6. Plan for the first bills before they arrive
- A first-home-buyer checklist for the kitchen bench
Before you start: what can you comfortably afford?
Your borrowing limit is useful information – start there.
Before you go about inspecting homes, look at your real weekly life: groceries, school costs, childcare, transport, insurance, subscriptions, debt repayments, birthdays, rego and the occasional week where everyone gets sick at once. Then add the ongoing cost of home ownership — rates, water, repairs, strata levies if applicable and home insurance.
Use Moneysmart’s mortgage calculator to test repayments at different interest rates. It is wise to see how the budget would feel if rates rose, rather than treating today’s repayment estimate as the forever number.
The best first home is not necessarily the most expensive one a lender will approve. It is the one that still lets you live in it without every school excursion requiring a family summit.
1. Work out your deposit — and the costs around it
A deposit is the big one, but it is not the only cost of buying a home. You may also need to budget for:
- conveyancing or legal fees
- building and pest inspections
- strata reports for apartments, units or townhouses
- lender and settlement fees
- transfer duty, unless an exemption or concession applies
- moving, utility connection and immediate repairs.
Do you need a 20% deposit?
Not always. Saving 20% can reduce the amount you borrow and may help you avoid lenders mortgage insurance (LMI), but some buyers purchase with less.
Eligible first home buyers may be able to use the Australian Government 5% Deposit Scheme with a minimum 5% deposit and no LMI. Eligible single parents or legal guardians may be able to apply with a minimum 2% deposit. A participating lender still assesses your application, and property price caps and other eligibility criteria apply.
The scheme is not cash handed to you, and a smaller deposit means borrowing more. Check the figures carefully before deciding whether buying sooner is worth the larger loan.
Other deposit pathways worth checking
The First Home Super Saver Scheme can allow eligible people to use some voluntary super contributions toward a first home. The current contribution cap is $15,000 in one financial year and $50,000 in total, but the scheme has timing and eligibility rules — including requesting a determination before settlement — so read the ATO guidance before making plans around it.
Also check your state or territory revenue office for first home owner grants and transfer-duty concessions. They vary by location, property type, value and whether you will live in the home.
2. Choose a property type that suits your life now
The first home does not have to be your forever home. In fact, it may be smarter if it is not trying to be everything at once.
A freestanding house may mean more outdoor space and freedom to change things, but it can also mean every fence, gutter and mystery roof leak is now your problem. Apartments, units and townhouses can offer a lower entry price or a location closer to work, school or family — but may include strata fees and rules.
A unit, townhouse or duplex can be a practical middle ground for buyers who want less maintenance or a more achievable price point without giving up the feeling of having their own front door.
Before falling for a property, think about the boring but important bits:
- how many bedrooms your family actually needs
- parking, storage and public transport
- school and childcare routines
- whether stairs, shared walls or a small yard will work long term
- strata fees, by-laws, sinking funds and planned works
- the cost of heating, cooling and maintaining the property.
Buy the life the property gives you, not just the photo that looked good on the listing.
3. Get pre-approval — but understand what it is
Pre-approval can help you set a property-search budget and show an agent or seller that you are serious. It is not final approval and it is not a reason to start bidding like you are on a game show.
Ask your lender or broker:
- what information has been assessed
- which conditions still need to be met
- when the pre-approval expires
- what changes in your income, debt or spending you should report
- how a property valuation affects the final decision.
Pre-approval periods vary by lender. The property, valuation and your circumstances still need to be approved before finance becomes unconditional. Avoid taking on new debt or making large financed purchases while your application is underway unless you have spoken to your lender first.
4. Do your homework before you make an offer
It is easy to get swept up once you find a place with decent natural light and enough room for the sofa. This is when the sensible people — your conveyancer, inspector and future self — need to have a say too.
Before signing a contract or bidding at auction:
- have a solicitor or conveyancer review the contract
- arrange building and pest inspections where relevant
- read the strata report for apartments, units and townhouses
- check for planned special levies, major works and restrictive by-laws
- confirm your finance conditions and the deadline to meet them
- understand the cooling-off rules in your state or territory.
An auction can be especially risky because you may be committing to buy without a finance clause. Moneysmart’s buying-a-house guide explains the key steps and why legal advice before signing matters.
Negotiating is allowed. Ask questions. Take a breath. A property does not become “the one” because another buyer looked at it for twelve minutes after you.
5. Finalise the loan and prepare for settlement
Once your offer is accepted, your lender will complete its assessment and arrange a valuation. If your finance is approved, you will receive loan documents to review and sign.
Your conveyancer or solicitor coordinates the legal transfer and settlement. Before settlement, you will usually have a final inspection to make sure the property is in the agreed condition and any included items are still there.
Settlement day is when ownership transfers and you receive the keys. It is an excellent day to celebrate — after you have checked where the water meter is, taken photos of the condition of the home and worked out which mystery key opens the letterbox.
6. Plan for the first bills before they arrive
The first few weeks in a new home have a way of turning a carefully calculated deposit into a parade of receipts: curtains, a lawn mower, a new lock, cleaning supplies and a bin you somehow forgot existed.
Set aside a small moving-in buffer and organise your essentials early. For utilities, compare plans rather than simply accepting the previous owner’s retailer.
Econnex’s energy-plan comparison service can help you compare electricity and gas offers from participating retailers, while its electricity plan comparison page focuses on available electricity plans, rates and features. Availability depends on your location.
You can also compare Energy Locals electricity plans alongside other offers in your area.
For an independent benchmark, Energy Made Easy is available in the ACT, NSW, Queensland, South Australia and Tasmania, while Victorian households can use Victorian Energy Compare.
If filtered drinking water is on your kitchen wish list, start with the setup that suits the home. The BRITA On Tap V-MF System is a tap-mounted option for compatible standard taps.
If you already have a compatible system, the On Tap V-MF replacement cartridge and A1000 undersink replacement filter are the relevant replacement options. Check compatibility, installation requirements and current product details before buying.
A first-home-buyer checklist for the kitchen bench
Before you make an offer, make sure you can tick off:
- a realistic repayment budget with room for rate changes and home costs
- deposit, legal fees and moving costs
- any applicable government scheme, grant or concession
- pre-approval details and expiry date
- contract review and relevant inspections
- a settlement and moving-in buffer
- plans for insurance, utilities and rates.
Buying your first home is not about getting every decision perfect. It is about asking enough questions that the exciting decision is also a safe one for your family.
Aw cheers! We’ll take “top quality content” when the content involves golden syrup dumplings any day Hope you give them…