Buying your first home is one of the most exciting — and most daunting — financial decisions you’ll ever make. Between saving a deposit, understanding government grants, navigating lender requirements, and finding the right property, it can feel overwhelming. This guide cuts through the noise and gives you a clear roadmap to buying your first home in Australia.
Step 1: Understand Your Budget
Before you fall in love with a property, you need to know what you can actually afford. Your borrowing capacity is determined by your income, existing debts, living expenses, and the size of your deposit. Lenders typically allow you to borrow up to 6–7 times your annual income, but responsible borrowing means leaving a buffer for rate rises and unexpected costs.
A mortgage broker can give you a free pre-approval assessment and tell you exactly how much you can borrow — before you start looking at properties.
Step 2: Save Your Deposit
The standard deposit for a home loan is 20% of the purchase price. On a $700,000 property, that’s $140,000. However, many first home buyers get into the market with as little as 5% deposit — though this typically means paying Lenders Mortgage Insurance (LMI).
LMI protects the lender (not you) in case you default. It can add thousands to your loan, but for many buyers it’s the trade-off that gets them into the market years earlier.
Step 3: Access First Home Buyer Schemes and Grants
Australian first home buyers have access to several government schemes that can significantly reduce your upfront costs:
First Home Guarantee (FHBG): Allows eligible buyers to purchase with as little as 5% deposit without paying LMI. The government acts as guarantor for the remaining 15%.
First Home Owner Grant (FHOG): A one-off payment of up to $10,000 (amount varies by state) for first home buyers purchasing or building a new home.
Stamp Duty Concessions: Most states offer stamp duty discounts or exemptions for first home buyers under a certain purchase price threshold. In NSW, for example, first home buyers pay no stamp duty on homes up to $800,000.
First Home Super Saver Scheme (FHSSS): Allows you to save for your deposit inside your superannuation fund, taking advantage of the lower tax rate on super contributions.
Step 4: Get Pre-Approved
Pre-approval (also called conditional approval) is a lender’s confirmation that they’re willing to lend you up to a certain amount, subject to final checks. It gives you confidence when making offers, and sellers take pre-approved buyers more seriously.
Pre-approvals typically last 3–6 months. A mortgage broker can arrange pre-approval with multiple lenders simultaneously without leaving multiple inquiries on your credit file.
Step 5: Find the Right Loan
Not all home loans are created equal. Beyond interest rate, consider:
Offset account: Reduces the interest you pay by offsetting your savings against your loan balance.
Redraw facility: Lets you access extra repayments you’ve made if you need funds later.
Fixed vs variable rate: Fixed gives certainty; variable typically offers more flexibility and lower rates over the long term.
Repayment frequency: Paying fortnightly instead of monthly can shave years off your loan.
Step 6: Make an Offer and Exchange Contracts
Once you’ve found the right property and your finance is pre-approved, you can make an offer. Always get a building and pest inspection done before exchange. Your solicitor or conveyancer will handle the legal paperwork. On exchange, you’ll pay a 10% deposit (or negotiate a smaller holding deposit).
How Assembly Finance Helps First Home Buyers
We guide first home buyers through every step of the process — from understanding your borrowing capacity to applying for grants, selecting the right loan, and settling. Our service is completely free to you (we’re paid by the lender), and we’re available evenings and weekends to fit around your schedule.
