First Home Buyer Guide: How to Save For and Buy Your First Property

Buying your first home is the largest financial decision most Australians make. The process is complex, the stakes are high, and the costs extend well beyond the purchase price. Understanding the complete picture before you start prevents expensive surprises and positions you to make confident decisions at each stage of the process.

How Much Deposit Do You Actually Need?

The standard deposit is 20% of the purchase price — on a $700,000 property that is $140,000. With less than 20%, most lenders require Lenders Mortgage Insurance (LMI), which costs $10,000-25,000 and is added to your loan balance. The First Home Guarantee scheme allows eligible first home buyers to purchase with as little as 5% deposit without paying LMI — the government guarantees the remaining 15% to the lender. Research eligibility at the National Housing Finance and Investment Corporation website. Stamp duty varies by state and is a significant additional cost on top of your deposit.

First Home Buyer Grants and Schemes

The First Home Owner Grant (FHOG) provides $10,000-25,000 in most states for eligible first home buyers building or buying a new home. The First Home Super Saver Scheme allows you to make voluntary super contributions and withdraw up to $50,000 plus earnings for a home deposit — these contributions are taxed at 15% rather than your marginal rate, providing a tax saving on the way in. State governments offer additional stamp duty concessions and grants that vary by state — check your state revenue office for current offerings.

Getting Your Finances Ready

Build your deposit in a high-interest savings account while maintaining a clean credit history. A clean credit file demonstrates responsible financial behaviour to lenders. Avoid applying for new credit cards or personal loans in the 12 months before applying for a mortgage. Reduce existing debt as much as possible — lenders assess your borrowing capacity based on your income and existing commitments. Use TopCashback on insurance renewals and online purchases to accelerate your deposit savings with cash back earnings on spending you are making anyway.

Understanding Mortgage Types

Variable rate mortgages move with the RBA cash rate — your repayments decrease when rates fall and increase when rates rise. Fixed rate mortgages lock your interest rate for 1-5 years providing repayment certainty but missing out if rates fall. Split loans combine both — a portion fixed and a portion variable. Offset accounts are transaction accounts linked to your mortgage — any balance in the offset reduces the interest calculated on your loan. A $30,000 offset against a $600,000 mortgage saves significant interest and reduces your loan term.

Beyond the Purchase Price: True Costs of Buying

Stamp duty varies by state and property value — budget 3-5% of purchase price in most states. Conveyancing costs $1,500-2,500. Building and pest inspections cost $500-800 and are non-negotiable for existing properties. Mortgage registration fees. Home and contents insurance from settlement day. Removalist costs. Initial maintenance and improvements. Total additional costs beyond the deposit and purchase price typically run $20,000-40,000 — these must be in your budget before you exchange contracts.