You might feel two things at once right now: excited to finally buy a place of your own, and confused by banks, deposits, and all the talk about government schemes. That mix of feelings is normal for a first home buyer in Australia.
This guide breaks the process into plain, simple steps. You will see what happens with your money, how the buying process works, and where grants and schemes can help. The aim is to give you a clear roadmap, not a pile of jargon.
Rules, loan policies, and government schemes change over time and by state. So treat this as general education, not legal, tax, or personal financial advice. For tailored help, it often makes sense to speak with a home loan expert and have a relaxed chat about where you are in the journey and what you want next.
What Every First Home Buyer Needs To Know Before Getting Started
When you buy your first place, you are usually buying a home to live in, not an investment. That means the numbers have to work, but your day‑to‑day lifestyle matters too.
The first big piece is your budget. Before you scroll through listings, you need to know two things: how much deposit you can bring and what monthly repayments feel safe. A simple rule of thumb many people use is to keep home loan repayments under 30 to 35 percent of your take‑home pay.
Next is your deposit. Many first home buyers in Australia save somewhere between 5 and 20 percent of the purchase price. A 20 percent deposit gives you more options and often avoids extra costs, but it can take longer to save. Some government programs now make it possible to buy with a 2 or 5 percent deposit, which we will cover later.
On top of the deposit, there are extra costs you need to plan for, such as:
- Stamp duty (unless you qualify for a concession or exemption)
- Legal or conveyancing fees
- Building and pest inspections
- Moving costs and connection fees
- First year of home insurance
These extras add up. Tools like the government’s MoneySmart buying a house guide can help you estimate them.
There are also several first home buyer schemes that can help you buy with a smaller deposit or pay less stamp duty. For now, just keep in mind that support exists and can make a big difference to your timeline.
Work out how much you can afford as a first home buyer
Start with your own numbers, not the property ads.
Look at:
- Your after‑tax income
- Regular bills and living costs
- Any personal loans, car loans, or credit cards
From there, test what a monthly repayment might feel like. Online calculators from banks or comparison sites like Finder’s guide to buying a house can give you a rough repayment figure based on a loan size, rate, and term.
Ask yourself: if interest rates rise or your costs jump, would you still sleep at night? If the answer is no, the loan amount is probably too high.
Remember, a bank might approve you for more than you feel comfortable with. Your job is to pick the loan size that fits your life, not just the maximum you can borrow.
Understand deposits, LMI, and true upfront costs
Your deposit is the money you put in upfront. Common targets are:
- 5 percent, often with Lenders Mortgage Insurance (LMI)
- 10 percent, sometimes with reduced LMI
- 20 percent, usually with no LMI
LMI is an insurance policy that protects the lender if you can’t repay the loan. You pay for it, often thousands of dollars, either upfront or added to the loan. It does not protect you if you lose your job or have health issues, it just protects the bank.
Some federal schemes, like the First Home Guarantee, let eligible buyers purchase with a 5 percent deposit and no LMI, because the government backs part of the loan. You can read more about it on the Housing Australia site under the First Home Guarantee.
Along with the deposit and any LMI, set money aside for:
- Stamp duty (if payable in your state)
- Solicitor or conveyancer fees
- Building and pest inspections
- Moving and cleaning
- Home and contents insurance
When you add it all up, you get your true upfront cost, not just the deposit.
Step-by-Step: How To Buy Your First Home In Australia
Once you understand your money, the buying journey follows a fairly clear path.
Step 1: Get your money and first home buyer plan in order
Before you talk to a lender, tidy up your financial life.
Focus on:
- Tracking your spending for a few months
- Cutting back on any costs that do not matter much to you
- Paying down or closing high‑interest debts where you can
- Keeping your job and income as stable as you can
- Saving your deposit into a separate high‑interest account
Lenders like to see consistent savings and sensible spending patterns. This shows you can handle the commitment of a home loan.
If you have past credit issues, you might want to get a copy of your credit report and check that everything shown is correct.
Step 2: Talk to a broker and get home loan pre-approval
A home loan pre‑approval is a conditional “yes” from a lender for a certain loan amount. It is not a guarantee, but it gives you a clear price range and shows sellers you are serious.
Most lenders will ask for:
- Photo ID
- Recent payslips or proof of income
- Bank statements for your savings and everyday accounts
- Details of any loans, credit cards, or buy‑now‑pay‑later accounts
A good broker works with many lenders and understands different first home buyer policies. They can help you compare rates, fees, and features so you do not have to do it alone.
Step 3: Search smart, inspect carefully, and choose the right home
With pre‑approval in place, you can house hunt with a clear budget.
Pick a few suburbs or towns that fit your price range and lifestyle. Look at:
- Travel time to work or study
- Schools, shops, parks, and healthcare
- Future projects that might affect prices or noise
At open homes, use a simple checklist. Take notes on:
- General condition, signs of damp, cracks, or leaks
- Layout and storage
- Natural light and airflow
- Street noise and privacy
- Any strata or body corporate fees if it is an apartment or townhouse
If you find a place you like, try to arrange a building and pest inspection before you are fully locked in. Guides like this step-by-step overview of buying a house in Australia can give extra detail on what to look for.
Step 4: Make an offer, sign the contract, and move to full approval
When you are ready to buy, you either:
- Make an offer through the agent in a private sale, or
- Bid at auction if the property is going under the hammer
For private sales, many buyers make their offer subject to finance and subject to building and pest. This means the contract only goes ahead if your loan is fully approved and the inspection result is acceptable.
Auctions are different. There is usually no cooling‑off period and conditions are tight. If you win, you are committed on the day, so never bid past your safe limit.
Once your offer is accepted:
- The contract goes to your solicitor or conveyancer.
- Your broker or lender orders a valuation on the property.
- If everything checks out, the lender gives unconditional approval.
- You sign the loan documents and return them to the lender.
Your legal representative explains what you are signing and handles the legal side of the transfer.
Step 5: Settlement day and getting your keys
Settlement is the final step. On that day:
- Your lender sends the money to the seller’s bank
- The property title transfers into your name
- Your solicitor or conveyancer confirms that settlement is complete
Before settlement, arrange a final inspection to make sure the property is in the same condition as when you agreed to buy. Set up home insurance from the day you become the legal owner and line up electricity, gas, internet, and any removalists.
Then you collect the keys and walk into your new home.
Grants, Schemes, and Getting Help As A First Home Buyer
As of late 2025, there is more help for first home buyers than ever, but it can feel hard to follow.
At the federal level, the First Home Guarantee, Regional First Home Buyer Guarantee, and Family Home Guarantee let eligible buyers purchase with deposits of 2 to 5 percent and no LMI, because the government backs part of the loan. The First Home Buyers government site explains these pathways and links to Housing Australia for more detail.
The new Help to Buy shared equity program supports some buyers who have at least a small deposit but still need help to reach a suitable home price. In that case, the government takes a share of the property and you need a smaller loan.
The First Home Super Saver Scheme lets you withdraw up to $50,000 of voluntary super contributions to put toward your first home deposit. This can be tax‑effective if planned well.
Each state and territory also has its own First Home Owner Grant and stamp duty concessions. These often focus on new homes and have caps on property price and income. A current summary of grants and schemes across Australia is in this 2025 guide to first home buyer grants and schemes.
Rules change often and differ by state. Always check current details on official government sites or with a qualified professional so you do not miss out on support you qualify for.
If you feel unsure about which schemes you can use, a friendly broker at The Lending Studio can walk through your income, deposit, and target areas, then explain your options in plain English.
Conclusion
Buying your first home in Australia is a big step, but it becomes far less scary when you break it into simple stages: sort your money, get pre‑approval, search smart, make an offer, then settle and move in. Each step builds on the last and you do not have to rush.
There is a lot of support for a first home buyer, from federal guarantees and shared equity to state grants and stamp duty discounts. The key is to know what is out there and choose what suits your situation.
If you want help turning ideas into a clear plan, reach out to The Lending Studio for a relaxed chat about your goals, questions, and next steps. A short conversation today can make your path to the front door feel much more real.