Home loans · First home buyers
Your first home, including the costs nobody mentions.
Most first home buyers spend two years saving a deposit and about ten minutes thinking about transfer duty, conveyancing, inspections, and the month after settlement when the hot water system gives up. The deposit is the part everyone plans for. It is rarely the part that catches people out.
Start here
The deposit is not the whole cost of buying.
There is a moment that happens to almost every first home buyer. The deposit is finally there, and then the conveyancer sends through the settlement figures and a second, unbudgeted number is sitting underneath the first one.
None of these costs are hidden. They just do not appear on the listing, and nobody reminds you about them. Work them out before you start looking, not after you have made an offer.
| Cost | What it is | Getting your real number |
|---|---|---|
| Transfer duty | Commonly called stamp duty. A state tax on the transfer, usually the largest cost after the deposit itself. | Use the calculator published by the revenue office of the state you are buying in. |
| Conveyancing | A conveyancer or solicitor reviews the contract, runs the searches and handles settlement. Not the place to go cheapest. | Ring two or three firms before you bid. Ask for a fixed fee, and what disbursements sit on top. |
| Building and pest inspection | An independent inspector tells you what you are really buying. On strata, add a strata records inspection. | Budget it per property. You may pay for more than one before an offer sticks, and that is money well spent. |
| Lenders mortgage insurance | A premium charged where your deposit is below a lender's threshold. It protects the lender, not you, and is usually added to the loan. | It depends on the loan size and deposit, and the scales differ. We will show you the real figure for your scenario. |
| Loan and government fees | Lender application or settlement fees, plus mortgage and transfer registration at the titles office. | Ask for the lender's disclosure documents and your conveyancer's settlement statement in writing. |
| Settlement adjustments | Council rates, water and body corporate levies are apportioned. If the seller paid ahead, you reimburse the balance. | Ask your conveyancer for a rough figure early rather than in the final week. |
| Insurance and moving | Building insurance from the day you become liable, then removalists, connections, locks and the things a rental quietly provided. | Quote insurance while the contract is being reviewed. Write the moving list before you move. |
Owning means the repairs are yours now, and something usually goes early — a hot water system, a pump, a tree that has to come out, a strata special levy. Buying with your last dollar means the first ordinary problem goes onto a credit card at the worst possible rate. A buffer sitting untouched in an offset or savings account is the difference between an inconvenience and a crisis.
The assessment
Genuine savings, and why lenders care.
Lenders generally want to see that part of your deposit is genuine savings — money you accumulated yourself over time, rather than a balance that appeared last week. It can feel like an arbitrary hoop. It is not. A deposit built steadily out of your own income is direct evidence you can go without a chunk of your pay every month, which is exactly what a mortgage asks of you.
So if some of your deposit is a gift from family, say so at the start. Gifted funds are common and entirely workable, but they are treated differently, usually need a letter from the person giving them, and the requirements are not identical everywhere. A week before settlement is a bad time to discover that.
What else moves your borrowing capacity
- Income and how stable it is. Time in your role, whether you are permanent, casual, contract or self-employed, and whether bonus or overtime can be counted.
- Credit card limits. The limit counts, not the balance. A card you never use still reduces what you can borrow, so reducing or closing unused ones is often the highest-leverage thing available to you.
- Buy-now-pay-later. These are visible in your bank statements and increasingly on your credit file, and the repayments are commitments like any other. Regular reliance on them also says something about cash flow that a lender will read. Wind them down and close the accounts well before you apply.
- HECS-HELP. A study debt is repaid through the tax system once your income passes the compulsory repayment threshold, which reduces your take-home pay. Lenders generally account for that, so it does affect capacity even though it behaves nothing like an ordinary loan. It very rarely stops a purchase on its own.
- Personal loans and car finance. Assessed against your income for the full remaining term. A car loan taken out the year before you buy can cost you more borrowing capacity than the car was worth.
- Living expenses and dependants. Assessed against your actual statements, not a figure you declare. Three months of legible, unremarkable banking helps more than people expect.
Grants and concessions
Check the rules yourself. Do not take a number off a website.
Three broad kinds of help exist for first home buyers in Australia, and people routinely blur them together:
- First home owner grants, run by each state and territory.
- Transfer duty concessions or exemptions for first home buyers, also state by state.
- The federal Home Guarantee Scheme, administered nationally, which supports eligible buyers to purchase with a smaller deposit.
Every one of those numbers has moved in recent years. Grant amounts change, property price caps change, eligibility conditions change, and none of it is the same across the states and territories. A figure written into a web page ages badly, and acting on a stale one can send you to an auction with the wrong budget.
Go to the source. For a grant or a duty concession, that is the revenue office of the state or territory you are buying in, which publishes the current conditions and a duty calculator. For the federal scheme, read the current published scheme rules rather than a summary. Then call us and we will go through all of it against your actual situation — that is genuinely part of the job.
One thing holds regardless of the scheme detail: help with a deposit does not change what a lender assesses. Your income, your commitments and your conduct still decide whether the loan is affordable. A scheme can shorten the wait. It cannot make an unaffordable purchase affordable.
Important distinction
A pre-approval is not an approval.
This is the most misunderstood step in the whole process, and misunderstanding it is how people end up bidding on a house they cannot settle on.
| Stage | What it means | What it does not mean |
|---|---|---|
| Indicative estimate | A calculator or a broker gives you a rough borrowing range from figures you supply. | Nothing verified, no lender has looked at you. A starting point only. |
| Pre-approval (conditional) |
A lender has assessed your documents and indicated it is willing to lend up to an amount, subject to conditions. It gives you a credible budget. | Not a commitment to lend. It is conditional, it expires, and it is given before anyone has seen the property you end up buying. |
| Formal approval (unconditional) |
The lender has assessed the specific property, the valuation is done and every condition is satisfied. | This is the one that counts. Your conveyancer should know the moment it happens. |
Those conditions are real. The common ones are a satisfactory valuation, confirmation your circumstances have not changed, and verification of documents — and any of them can move the answer. So between pre-approval and settlement: avoid changing jobs, do not open a credit card, a car loan or a buy-now-pay-later account, and do not let your savings drain. Lenders re-check. A valuation coming in under the purchase price is also more common than people expect, and covering that gap lands on you.
Auction contracts are generally unconditional on the fall of the hammer, with no cooling-off period and no room for a finance clause. The inspection, the contract review and the finance work all have to be done before you raise your hand, on a property you may not win. Cooling-off rules for private treaty sales differ by state and have exceptions, so ask your conveyancer what applies to you before you sign anything.
The middle bit
What happens between the offer and the keys.
This is where most of the actual work happens, and it is the part first home buyers have least visibility over. Broadly, the sequence runs like this.
The settlement period is negotiated in the contract rather than fixed by anyone, so if you need longer, raise it while the contract is still being agreed. Delays, when they happen, are almost always missing paperwork rather than the lender.
Family help
Guarantor arrangements, described honestly.
A guarantor arrangement is where a family member, usually a parent, offers equity in their own property as additional security for part of your loan. It can bring a purchase forward by years and it can reduce or remove lenders mortgage insurance. It is also the most serious favour anyone in your family is likely to do for you, and it deserves describing plainly rather than selling.
What the guarantor is actually taking on
- Real, enforceable liability. A guarantor is not a character reference. If you cannot pay, the lender can pursue the guaranteed portion, and their property is the security behind it. In the worst case that means their home.
- A restriction on their own finances. While the guarantee stands it generally affects their ability to borrow, refinance or sometimes sell, because the obligation attaches to their property.
- An open-ended timeframe. The guarantee is usually released once your loan falls far enough relative to the property value, which depends on your repayments and the market. Nobody can promise a date.
- A relationship risk. If things go wrong financially, they go wrong between people who are related. Both sides should say out loud what happens if you lose your job or separate from a partner.
If a guarantor is on the table, they must get their own independent legal advice from someone acting for them alone — not for you and not for the lender. Most lenders require it; even where it is not required, they should insist. A guarantor who does not fully understand the document should not sign it.
We will explain the structure to both of you together and be straightforward about the downside. If a guarantee is not right for your family, we would rather say so than arrange one.
How it works
Three steps.
Tell us where you are up to
What you have saved, what you earn, what you owe, and roughly where and when you want to buy. If the honest answer is that six more months of saving would put you in a much stronger position, we will say so.
We check policy before anything is lodged
We work out a realistic budget including the costs above, then match you to lenders whose criteria fit. No credit enquiry is recorded while we do it, so your file is not the testing ground.
Pre-approval, offer, settlement
We arrange the conditional approval, stay with you through the offer and the valuation, and work with your conveyancer to settlement. One named broker who answers the phone.
Common questions
First home buying, answered.
How much deposit do I actually need?
There is no single national answer, and anyone who gives you one is guessing. Requirements differ between lenders, between loan types and according to your own profile, and they interact with lenders mortgage insurance and with whether a government scheme applies to you. What is true generally is that a larger deposit widens your options, reduces or removes the insurance premium and usually improves the pricing available to you. Tell us your situation and we will give you a real figure for your scenario rather than a rule of thumb.
What should I budget for on top of the deposit?
At minimum: transfer duty, conveyancing, a building and pest inspection, registration fees, insurance, settlement adjustments for rates and water, and moving costs. Lenders mortgage insurance too, if your deposit sits below your lender's threshold. Then a buffer for the first year, because repairs are yours now. Get real quotes for the professional services and use your state revenue office calculator for the duty, rather than working off figures you read on a website, ours included.
Am I eligible for a first home owner grant or a duty concession?
Possibly, and it is well worth checking, but the rules genuinely differ by state and territory and they change. Grant amounts, property price caps, whether the property must be new or established, whether you must live in it and for how long — all of that is set where you are buying. Go to that revenue office directly for the current position, and read the federal scheme rules separately, since that is a different programme with its own criteria. Then call us and we will work through what applies to your circumstances.
What is lenders mortgage insurance, and does it protect me?
No, it protects the lender. It is a one-off premium charged where your deposit is below a lender's threshold, covering the lender against loss if the loan is not repaid and the property sells for less than is owed. You pay it, they benefit. It is usually added to the loan, so you pay interest on it too. That does not automatically make it a bad deal — for some buyers, paying it and buying earlier works out better than waiting — but it should be a deliberate decision made with the actual figure in front of you.
Is a pre-approval the same as being approved?
No, and this trips up a lot of first home buyers. A pre-approval is conditional: the lender has assessed your documents and is willing to lend up to an amount subject to conditions, before anyone has seen the property you will buy, and it expires. Formal approval comes once the lender has assessed the specific property and valuation and every condition is met. That is the one you can rely on. In between, avoid changing jobs, taking on new credit or spending your savings, because lenders do re-check.
Does my HECS-HELP debt stop me from buying?
Very rarely on its own. A study debt is repaid through the tax system once your income passes the compulsory repayment threshold, so it reduces your take-home pay, and lenders generally account for that when working out what you can afford. It does reduce borrowing capacity, but it behaves differently from an ordinary loan and how much weight it carries is not identical everywhere. Whether paying it down early helps depends on your numbers, and it is not always the right move — worth asking us with your actual figures.
Will buy-now-pay-later accounts count against me?
They are visible and they are treated as commitments. The repayments show in your bank statements, the accounts increasingly appear on credit files, and regular reliance on them says something about cash flow that a lender will notice. One dormant account is not the end of the world. But if you are planning to buy, winding them down and closing the accounts several months beforehand is one of the simpler ways to strengthen your position. The same goes for unused credit card limits.
Should I ask my parents to go guarantor?
Only once everyone understands exactly what it means. A guarantor puts their own property up as additional security and takes on real, enforceable liability — in the worst case their home is at risk, and while the guarantee stands it limits their own ability to borrow or refinance. It can also be a genuinely good arrangement that brings a purchase forward by years. Your guarantor should get independent legal advice from someone acting for them alone. We are happy to sit down with both of you and explain the structure honestly, including the uncomfortable parts.
Let's talk
Tell us where you are up to. We will tell you what it really takes.
No cost, no obligation, and no credit enquiry while we work it out. If you are ready, we will find the right loan from our panel. If another six months would put you in a much better position, we will say that instead.
Before you start looking
Two things are worth doing before you walk into an open home, and neither involves us.
Then come to us with the loan. Ready now? Start an application, or ask for a call back and we will work through it with you.
The Finance Team is the trading name of Online Showroom Pty Ltd and holds Australian Credit Licence 551493. We act as a credit broker rather than a lender. Nothing on this page is an offer of credit or a recommendation to borrow, any costs or repayments discussed with you are estimates for illustration only, and every application is subject to assessment and approval by the lender.