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Buying My First Home

Get a head start with the knowledge and confidence to lock down your first property.

Buying My First Home

Buying your first house is probably one of the most exhilarating (and nerve racking) things you can do in your entire life. It’s a daunting experience where banks are full of surprises and high school never prepared you for the steps involved. Let’s face it: We’re not playing with Monopoly money anymore.

You want to feel confident when signing on the dotted line but that’s a lot easier said than done when you’re faced with complicated processes and unfamiliar jargon. You’re eager to get the ball rolling but are worried you might fall victim to some common pitfalls or sly traps. Where do you even start? Luckily, our mortgage advisors will assess your situation and get your finances in order, all the while giving you expert advice on how to make your dream come true. We’ll make sure you learn the ropes and are fully equipped with the know-how to brave the buying process.

Never fear, we’re here for you.


As a rule of thumb, the minimum deposit you will need is 10% of the property price. Of that 10%, 5% should be savings that you have accumulated. Lenders like to see that you can save money, and they may require you to show evidence of genuine savings over a three month period. The other 5% which could come in the way of a gift or a grant, will go towards costs including things like stamp duty and legal fees. Of course, the more savings you accumulate, the better. Think of it this way: The larger your deposit, the less you’ll need to borrow and the lower your repayments will be.

What’s more, if you can manage a 20% deposit, you may avoid paying Lenders Mortgage Insurance (LMI). LMI is designed to protect the lender from failed repayments when the sale value doesn’t cover the remaining loan amount. This one-off payment can be added to your loan, or paid upfront. While the above information is a helpful guideline, each situation is unique.

Our expert team will assess your entire financial picture, working with you to determine exactly how much money you’ll need to buy your dream home.

If you are struggling to save enough money for a deposit but are confident that you could afford mortgage repayments in the future, you may have some alternative options.

Family pledge or guarantor loans

If your parents are current Australian homeowners, they can provide a limited guarantee for your new home. As guarantors, they will use the equity from their own property as additional security for your deposit. However, your property will still serve as the primary security for the loan.

With this strategy, you may be able to purchase a property with little or no deposit. What’s more, you could also save thousands of dollars by not having to pay LMI – And that extra cash could go a long way in creating your dream home.

However, to support the guarantee, lenders will also put a mortgage over the guarantor’s property. This places the property at risk if any repayments fall behind. Therefore, it’s essential for the guarantor to understand the magnitude of this responsibility before they enter the agreement.

Joint ownership

Depending on your personal circumstances, you may want to purchase a property in partnership with a friend or family member. Pooling your money and combining your borrowing power will help you get your foot on the property ladder in areas that would otherwise be far out of reach.

However, there are some risks involved. You will be jointly liable for each other’s debts – if one of you defaults on your repayments and the other does not step up to pay the bill, both of your credit ratings will be harmed.

Disputes can also rear their head over:

  • Selling the property
  • Refinancing
  • Buying each other out
  • Splitting the property’s profits and costs

Therefore, you may want to consider signing a co-ownership agreement and getting some legal advice before buying the property.

Gifted cash

Your loved ones may want to help you with your deposit without committing to the risk of a guarantor loan. They can do this by gifting you a certain amount of funds. In this case, your family member must formally declare the sum as a non-refundable gift with the bank.

Supplemental loans

If your parents are financially secure, they may agree to help you purchase your property with a supplemental loan. This type of loan is particularly attractive to first home buyers, as it tends to have little to no interest – Thanks, Mum and Dad!

To avoid any controversy down the line, we strongly recommend that the terms between both parties are documented clearly and accurately.

Thankfully, the government are aware of how difficult it can be to purchase your first home. As a first home buyer, you are entitled to a grant that assists your property purchase, provided that all criteria are met. However, this type of grant varies by state so we recommend researching the specific options in your area.

You can also cut costs with certain concessions when purchasing your first home.

Below are some money-saving entitlements worth investigating.

First Home Owner Grant

The FHOG is a one-off payment designed to help you buy your first property. It was introduced as a means of offsetting goods and services tax (GST) on homeownership for first-time buyers, giving the supportive push they need to go through with the purchase.

While this is a national scheme, it is funded on a state level so you’ll find different legislation and eligibility criteria depending on your property’s location.

To check if you are eligible for the grant, visit:

Stamp duty concessions

Stamp duty is a tax imposed on any property purchase in Australia. This tax is calculated as a percentage of the property price and added to the final sale value of your new home. The rate varies from state to state.

In certain states, first home buyers can benefit from a stamp duty concession. This depends on whether you meet specific eligibility criteria and whether your property is valued below a specific threshold.

This is a benefit worth researching, as every little helps when it comes to buying your first home. To learn more about stamp duty concessions and if you are eligible, check out our stamp duty calculator or speak with our friendly team today.

A soon as you’ve determined how much deposit you are able to pay, you can work out how much you can really afford to borrow. This amount depends on numerous factors, such as your income, employment status, marital status, credit score, expenses and so on.

Check out our borrowing capacity calculator for a quick estimate.

If you want to avoid a lifetime of struggling to pay off your mortgage, then don’t overcommit yourself from the get-go. Rather, set a limit so that you don’t end up borrowing too much from your lender.

In addition to saving up for your deposit, you’ll need to consider the upfront and ongoing costs of purchasing a property: stamp duty, council and water rates, structural repairs and electricity bills – just to name a few. The cherry on top is that interest rates fluctuate over time, meaning you’ll need to budget for rate rises that will increase your repayments. Our last piece of advice? Picture yourself down the line. What are your future plans? When do you wish to retire? Do you want to have a family of your own?

It’s always a good idea to keep these things in mind and budget for any foreseen expenses alongside your deposit.