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How to buy a house in Australia: a 2023 guide

From suburb research to finance, signing contracts and moving in, we can guide you through the entire home buying journey.

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By

Marc Terrano

&

Sarah Megginson

Updated

Fact checked

How do I buy a house in Australia?

  1. Assess your circumstances
  2. Work out how much you can borrow
  3. Research the property market
  4. Pick the property right for you
  5. Compare home loans
  6. Complete the purchase
  7. Apply for a home loan
  8. Get ready to move in

Assess your circumstances

Your job security, number of dependents (if any) and lifestyle habits will influence how much you can borrow and the type of property you can afford. Here are some key points to think about when deciding if you're ready to buy a home.

Job security

Most lenders want borrowers who have employed in the same job for at least 12 months. This demonstrates that you have a stable source of income to service your mortgage repayments and are a lower lower risk to the lender.

Your profession

Depending on your occupation, some lenders may offer professional package home loans.

If you are a doctor or an accountant, a lender may waive lender's mortgage insurance (LMI) as you are perceived as a low risk borrower due to your high earning potential.

Your income

If you're a low-income earner or you're receiving Centrelink benefits, it may be more difficult to qualify for a home loan.

Family plans

Each dependent you have can lower the amount you can borrow. This is because lenders will request that you factor in costs such as childcare, education fees and unexpected medical expenses.

There are also options if you are applying for a home loan while on maternity leave or as a single parent.

Work out how much you can borrow

How much you can borrow for your home loan really depends on your individual circumstances. But it is definitely worth estimating your borrowing power before you start to search for properties.

Things to consider when working out your borrowing power

  • Existing debt

Your credit file and the amount of existing debt you have can reflect whether or not you're ready to purchase a home. Request a copy of your credit file to review your financial health.

If you have bad credit, you may not be a good candidate for a home loan application. However, there are lenders that specialise in borrowers with bad credit.

  • Deposit

Ideally, you want to come up with at least a 20% deposit so you can avoid paying lenders mortgage insurance (LMI) for a full documentation home loan.

If you don't have at least 10-20% deposit saved, there are low-deposit loans available, however you may want to think about whether you are financially prepared to buy a home, and whether you can afford to pay for mortgage insurance.

  • Costs

As well as the mortgage you need to consider costs like government charges, lenders fees and other costs like conveyancing. Some of the major upfront costs include stamp duty, building and pest inspections, settlement fees and lenders mortgage insurance (LMI).

Learn how to estimate your home-buying costs.

Start comparing home loans now

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1 - 5 of 86
Updated regularly
Name Interest Rate p.a. Comparison Rate p.a. Fees Monthly Payment
Unloan Variable Home Loan
Principal & Interest20% min. depositOwner-occupierRefinance
Interest Rate
5.74%
Comparison Rate
5.65%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$876
Go to siteMore Info
Tiimely Own Variable Rate Home Loan
Finder AwardPrincipal & Interest10% min. depositOwner-occupier
Interest Rate
5.94%
Comparison Rate
5.95%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$895
Go to siteMore Info
HSBC Home Value Loan
Principal & Interest40% min. depositOwner-occupier
Interest Rate
5.99%
Comparison Rate
5.99%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$900
Go to siteMore Info
loans.com.au Variable Home Loan
Principal & Interest10% min. depositOwner-occupier
Interest Rate
6.04%
Comparison Rate
6.06%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$905
Go to siteMore Info
Up Home Loan Variable Rate
Principal & Interest10% min. depositOwner-occupierOffset account
Interest Rate
6.15%
Comparison Rate
6.15%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$915
Go to siteMore Info
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Showing 5 of 86 results

Research the property market

How your property location fits into your lifestyle is one of the most important decisions you'll make in the home buying process. It's a matter of balancing your priorities and finding a suitable location that will match your needs and financial situation.

You need to carefully consider the geographic location of your property and how this will satisfy your lifestyle needs, particularly if you intend to stay there for an extended period of time.

You may also find that building your home may be a worthwhile option. If this is a consideration you should keep in mind suburbs with potential for future growth.

Learn how to research suburbs

Pick the right property for you

After fine-tuning different locations for your future home, you now need to research different properties that are listed on the market within these suburbs.

Here are some things to keep top of mind when deciding on property type.

Structural integrity

Structural integrity

One of the most important issues to think about when evaluating different properties is the structural integrity and quality of the build. When reviewing the structural integrity of the property, make sure you enquire about plumbing, electrics, insulation, materials in the structure and any existing damage (if it's an established property).

To help you understand whether the property is structurally sound, you should organise building and pest inspections to pre-empt any issues that may appear further down the track, (remember that inspections should only be organised if you have a strong intention to purchase the property, as you will have to pay for each inspection you request).

Property size

Property size

Regardless of the type of property you choose, you'll need to have an idea of the size. How many bedrooms and bathrooms do you need? Is the amount of space you need now the same as the space you'll need in the future? Do you want an extra bedroom for guests or potential tenants? Do you need a study if you plan to work from home?

Think about your lifestyle needs and the property size that will allow you to live comfortably. This will help you determine whether you need a 2-bedroom or 3-bedroom property, as well as whether you need additional rooms such as a living room, a baby's room or an outdoor entertaining area.

House or apartment

House or unit?

One of the biggest choices you'll have to make when selecting a property is whether to buy a house or a unit. While houses are typically more expensive, they've historically seen higher levels of capital growth. A detached house also offers more flexibility for renovations and additions.

Units, meanwhile, can have enormous potential as rental properties. They also have a lower price point than detached houses, so can be a good choice for first home buyers.

Should you buy a house or unit?

Compare home loans

When you're comparing home loans, you'll want to consider the following factors:

  • Interest rate. Ideally, you want to find a home loan that offers a competitive interest rate by market standards. A lower interest rate can go a long way in helping you maximise your savings. You should always pay attention to the comparison rate of different home loans, as this reflects the true cost of the loan by taking fees into account.
  • Fees. When comparing different home loans, you should keep an eye out for application or establishment fees, ongoing fees and discharge fees. Finding a home loan with fewer fees will help you to minimise your holding mortgage costs.
  • Features. As mentioned previously, there are many competitive features available that can help you save money. Compare if the lender allows you to make additional repayments without penalty, if a free redraw is available, if a 100% offset account is available, if split loans are offered, if the lender provides packaged discounts, and if salary crediting is offered.

Learn more about how to compare home loans

Complete the purchase

Once you’ve completed your preliminary research, decided where to buy and organised your finance, you need to prepare for your property purchase.

Get inspections done

Pre-purchase inspections give you a chance to see if any damages are present in the property and also allow a professional to view the fixtures and fittings that come with the property, such as air conditioners, carpet or furniture, to make sure they are sound. Generally, the contract of sale requires the seller to hand over the property to you in the same condition as it was on the day the sale was finalised.

You'll want to organise a building and pest inspection if you're buying a house, and a strata inspection if you're buying a unit.

Make an offer (or bid)

Houses in Australia are generally sold in two ways: via private treaty or auction.

With a private treaty sale the property owner sets the sale price and the real estate agent negotiates with buyers to achieve the highest possible sales price.

An auction involves multiple buyers bidding on the property at the same time.

If you've figured out your budget and researched suburbs and properties, you should have a good idea of what's a reasonable (and realistic) price for the property you're looking for.

Expert tips: how to bid at auction

Get ready to settle

If you win at auction or your offer is accepted in a private treaty sale, the next step will be to exchange contracts and pay your deposit to the vendor. Make sure to have a conveyancer or solicitor inspect the contract of sale.

Once contracts are exchanged, you'll be headed towards settlement day. Settlement is the process of paying the vendor and changing ownership of the home. Your lender will disburse funds for your home loan and you'll receive your keys.

You'll now need to sort out your home loan (if you haven't already started looking). And you'll need to make sure you have enough funds in your account to cover settlement, legal and conveyancing fees, as well as stamp duty.

After settlement is complete, your home purchase journey will have come to conclusion. It will be time to move into your new home.

What happens on settlement day?

Apply for a home loan

Once you've applied for a home loan, your application will progress through several stages. The first is pre-approval, which is a lender agreeing in principle to extend you a certain amount of finance. This stage is important, as it will give you an idea of your budget. However, the lender is under no obligation at this stage to offer you a home loan.

The next stage is conditional approval. At this stage, a lender often will have performed credit checks and verified your income and expenses, but will be waiting on more information either about your finances or the property you're buying.

The final stage is full approval. At this point, you'll sign and return your loan contracts and will have entered into a formal, binding agreement with your lender.

Get ready to move in

Once the settlement is complete, the property is all yours. But before you start packing boxes, there are a few items to prioritise on your agenda.

Familiarise yourself with the body corporate or local council of your area, organise removalist or cleaning services (if required) and get your utility accounts sorted. These are just some of things you need to organise before moving in.

Before making the transition, ensure that you're fully prepared to enjoy life in your new home from the moment you get the keys.

  • Sort through your belongings. Now is the time to ruthlessly cull anything you don't need or won't use.
  • Transfer accounts. Move all your services and utilities to your new address, and have your mail redirected.
  • Pack. It's a good idea to categorise your boxes by room for easy unpacking at your new residence.
  • Book removalists. It's wise to leave yourself a buffer of a few days between settlement day and your removalists coming. If you don't and run into any delays at settlement, it could add significant cost to your removalist bill.

Keep track of your move with our downloadable checklist

Read more on this topic

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10 Responses

    Default Gravatar
    SamSeptember 25, 2022

    Hi there,
    I have a fully paid off house (was my late uncles) that was gifted to me after his passing.
    There is nothing owing on the house and it is fully in my name as per the deeds.

    If i was to use the house as leverage to buy another place would the same methods for home loan lending still apply or is there another loan i need to take?

    Reply
      AvatarFinder
      RebeccaSeptember 30, 2022Finder

      Hi Sam,

      If you plan to use your house’s equity to acquire a second home, there are several ways that you can finance it. This includes refinancing, taking out a line of credit, or using savings from an offset account as a deposit and taking out a new loan.

      The steps may slightly vary depending on the option you choose. You may visit Using your equity to buy a second home guide to learn more.

      You can also talk to a mortgage broker about your specific circumstances and they’ll be able to walk you through your options.

      All the best,
      Rebecca

      Reply
    Default Gravatar
    DeborahMarch 11, 2019

    What lenders can I approach for a loan to purchase in an over 50s community? I have 50% of the home cost from the sale of my house.

    Reply
      AvatarFinder
      JoshuaMarch 11, 2019Finder

      Hi Deborah,

      Thanks for getting in touch with Finder. I hope all is well with you. 😃

      While I am unable to provide you a specific recommendation, you may refer to our list of the latest home loans. You can use our comparison table to compare offers based on the interest rate, fees, monthly repayment, to name a few. Once you are done comparing, click on the “Go to site” green button of your chosen lender. It should redirect you to the official website of the lender where you can get more information to start your online application.

      Moreover, you can also seek the help of mortgage brokers. They have the necessary knowledge and experience to help you explore your options.

      I hope this helps. Should you have further questions, please don’t hesitate to reach out again.

      Have a wonderful day!

      Cheers,
      Joshua

      Reply
    Default Gravatar
    JasonJune 18, 2017

    My wife and I want to purchase a house. We currently have a mortgage in our current place. Ideally we only wanted to be in it for 2 years then buy a house. We currently have 7 investment properties. I was told due to APRA and it will be hard for us to get a house loan to purchase a house. Are there people that could help in our situation?

    Reply
      Default Gravatar
      JonathanJune 18, 2017

      Hi Jason!

      Thanks for the comment.

      You can reach our to mortgage brokers for a personalized advice on this matter.

      Hope this helps.

      Cheers,
      Jonathan

      Reply
    Default Gravatar
    peterDecember 1, 2014

    Just an enquiry just sold my flat for $337,500 and have already
    placed a deposit of $30,500 towards a property @ $467,000 which leaves $437,000, total fees upfront just on $30,000, I have $130,000 which will cover the costs and the difference between both places, i am waiting on my solicitor to finalize all paper work and settlement day, in this respect do i guess have to organize a bridging loan? uncertain as to how much?

    Reply
      AvatarFinder
      ShirleyDecember 2, 2014Finder

      Hi Peter,

      Thanks for your question.

      It doesn’t sound like you need bridging finance as you have enough funds to cover the costs of moving from one property to the other.

      Bridging finance is useful if you have a cash flow problem during this period. However, it’s advisable that you speak to your current lender or agent to confirm if you’d need a bridging loan.

      All the best,
      Shirley

      Reply
    Default Gravatar
    NikkiJune 26, 2014

    Do you have the trail commission percentages from the different banks when they pay the broker?

    Reply
      AvatarFinder
      ShirleyJune 27, 2014Finder

      Hi Nikki,

      Thanks for your question.

      Unfortunately we don’t at this current point in time. However, you can find this information in the Credit Guides of the respective Mortgage Brokers.

      Cheers,
      Shirley

      Reply
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