Why First Home Buyers Should Start with a Checklist

Buying your first home isn't about ticking boxes. It's about knowing what you need before you need it, so when the right property appears, you're ready to move.

The difference between a buyer who secures their property and one who watches it go to someone else often comes down to preparation. A first home buyer who understands their budget, knows which documents their lender will request, and has already explored their deposit options can act quickly. Someone starting from scratch when they find a property they love will almost always arrive too late.

Working Out What You Can Borrow

Your borrowing capacity is shaped by your income, your existing debts, and your regular expenses. Lenders assess all three, and the result determines how much they'll lend you.

Consider a couple earning a combined $110,000 who want to buy in Brisbane. They have no car loan and minimal credit card debt. Their borrowing capacity will be different to a single buyer on $85,000 with a $15,000 car loan and a $10,000 credit card limit. The couple might borrow around $600,000 depending on their living expenses. The single buyer might borrow closer to $450,000. Both scenarios assume current variable interest rates and typical lender assessment buffers.

Before you start looking at properties, you need to know your number. That means gathering three months of payslips, your last two years of tax returns if you're self-employed, and a list of your monthly commitments. Lenders will also want to see your savings history, so having at least three months of bank statements ready is part of the process.

Understanding Low Deposit Options

You don't always need a 20% deposit. The Australian Government 5% Deposit Scheme allows eligible first home buyers to purchase with a 5% deposit, and the government guarantees the difference up to 20% of the property value. That means no Lenders Mortgage Insurance.

Property price caps apply. In Sydney, the cap is $1,500,000. In Melbourne, it's $950,000. In Brisbane, it's $1,000,000. Regional caps are lower but still generous compared to where they sat a few years ago. No income limits apply, and there are no annual place caps, so you won't be competing for a limited number of spots.

Applications go through participating lenders, not directly to Housing Australia. That's where working with a broker makes a difference. We know which lenders are on the panel, which ones process applications quickly, and which ones are more likely to approve your particular situation.

If you're buying in a regional area, the Regional First Home Buyer Guarantee may also be available depending on the property location and your circumstances. It works similarly to the 5% Deposit Scheme but applies to regional properties.

First Home Owner Grants and Stamp Duty Concessions

Every state and territory offers some form of support, but the structure varies.

In Queensland, the First Home Owner Grant is $30,000 for new homes valued under $750,000. On stamp duty, you'll pay nil transfer duty on established homes up to $700,000, with a concession applying up to $800,000. For new builds, the full transfer duty concession has no price cap.

In New South Wales, the grant is $10,000 for new builds or substantially renovated homes, with a purchase cap of $600,000 or a land and build cap of $750,000. Stamp duty is fully exempt on properties up to $800,000, with a sliding concession between $800,000 and $1,000,000.

Victoria offers a $10,000 grant for new homes up to $750,000 and a full stamp duty exemption on properties up to $600,000, with a concession phase-out at $750,000.

In our experience, buyers who factor these concessions into their budget early can afford a different type of property or retain more cash for furniture and immediate repairs. Someone purchasing an established home in Brisbane at $680,000 will pay no stamp duty. That's a saving of around $20,000 compared to a buyer in a different state without the same concession.

Getting Pre-Approval Before You Start Looking

Pre-approval gives you a clear borrowing limit and shows sellers you're a serious buyer. It's not a guarantee, but it's the closest thing to certainty before you sign a contract.

To apply for a home loan, you'll need proof of income, proof of savings, identification, and details of any existing debts. If you're receiving a gift deposit from family, lenders will want a signed declaration confirming the funds are a genuine gift and not a loan that needs to be repaid. That declaration needs to be provided upfront, not after you've found a property.

Pre-approval is usually valid for three to six months, depending on the lender. If your financial situation changes during that period, such as a new job or a credit card you've opened, you need to let your broker know. Changes can affect your approval, and it's easier to address them early than discover an issue at settlement.

Choosing Between a Fixed or Variable Interest Rate

A variable interest rate moves with the market. When the Reserve Bank changes the cash rate, your repayments can go up or down. You'll usually have access to an offset account and the ability to make extra repayments without penalty.

A fixed interest rate locks in your repayments for a set period, typically one to five years. Your rate won't change during that time, regardless of what happens in the broader market. The trade-off is less flexibility. Most fixed loans limit extra repayments to around $10,000 to $20,000 per year, and you won't have access to an offset account in most cases.

Some buyers split their loan, fixing part and leaving part variable. That gives you some certainty on repayments while keeping flexibility for extra payments and offset benefits. The split doesn't need to be even. You might fix 60% and leave 40% variable, or any other combination that suits your situation.

If you're unsure which structure makes sense for you, that's something we talk through as part of your home loan application. It depends on your income stability, your savings habits, and how much certainty you need in your budget.

Offset Accounts and Redraw Facilities

An offset account is a transaction account linked to your home loan. The balance in the offset reduces the interest you pay without reducing your loan balance. If you have a $500,000 loan and $20,000 in your offset, you're only charged interest on $480,000.

A redraw facility lets you access extra repayments you've made on your loan. If your minimum repayment is $2,500 per month and you've been paying $3,000, the extra $500 each month builds up and can be redrawn if you need it.

Offset accounts are more flexible because the funds remain separate from your loan. Redraw facilities can be restricted by the lender, and in some cases, accessing your funds requires notice or approval. For first home buyers who plan to build up savings after purchasing, an offset account is usually the more practical option.

What Happens After Pre-Approval

Once you've found a property and your offer is accepted, your lender will conduct a formal valuation. That valuation determines whether the property is worth what you've agreed to pay. If the valuation comes in below the purchase price, the lender will only lend based on the lower figure, which means you'll need to find the shortfall or renegotiate with the seller.

You'll also need to arrange building and pest inspections if your contract isn't unconditional. Those reports can uncover issues that affect the property's value or your willingness to proceed. If you're buying an apartment, a strata report is just as important. It shows whether the building has upcoming major works, disputes, or financial issues that could affect you as an owner.

Settlement usually occurs four to six weeks after contracts are exchanged, though it can be longer or shorter depending on what's negotiated. During that time, your broker will work with your lender to finalise the loan, and your solicitor or conveyancer will handle the legal side of the transfer.

Why Working with a Broker Matters

Lenders have different policies on everything from gift deposits to employment types to the suburbs they'll lend in. A buyer who works casually in their first year of a new job might be declined by one lender and approved by another. Someone buying in a regional area might find their chosen property falls outside one lender's postcode list but well within another's.

We regularly see buyers who've been knocked back by their own bank, only to be approved by a different lender within days. It's not that the first lender made a mistake. It's that their policy didn't suit that buyer's circumstances. Knowing which lender to approach in the first place saves time and avoids the frustration of applying in the wrong place.

If your situation is straightforward, you might not notice much difference between lenders. If you're self-employed, buying with a small deposit, or combining multiple income sources, the lender you choose will determine whether your application succeeds.

Buying your first home is a process, and having someone walk you through it makes a difference. Call one of our team or book an appointment at a time that works for you.