Tips for first home buyers in Australia

Top Tips for First Home Buyers in Australia

How to buy your first home the right way

Buying your first property can be an overwhelming process. First time borrowers can face uncertainty over how to apply for a home loan, how to get approved, the grants they might be eligible for and where they should look to buy. On top of that, the home buying process can be filled with steps you never knew existed and jargon you've never hear before.

This guide will ensure you're more confident when buying your first property, and ready to take on that real estate agent.

Eight tips for first home buyers

Boost your confidence and your home loan know-how with the following eight tips:

  • 1. Make sure you're actually eligible for a home loan. Before you dig too deeply into the process, check that you actually qualify for a home loan. Contact several lenders to get an idea of how much money you can borrow. This will give you a realistic understanding of what (and where) you can actually buy. Try out finder's home loan eligibility calculator to get a better idea.
  • 2. Research all your home loan options. The home loan market is complex and competitive. You need to compare the interest rates of as many loans as possible to make sure you're not getting a rate that's far higher than average. You also need to know what types of home loans are available. From variable to fixed rate loans, interest-only and investment loans, there are many different types of mortgages. Finding the type of loan that matches your needs is crucial.
  • 3. Sort out your debt. If you're already in debt you might find it harder to get a home loan approved, or you may not be able to borrow quite as much. Focus on paying off any large debts you may have before you apply for a home loan, especially high-interest debts. Consider combining several debts into one if you can. But note that some debts, such as university HECS debt, are far less troubling than, say, credit card debt.
  • 4. Get a good-sized deposit together. The bigger your deposit the more you can borrow. And you can apply for loans with lower interest rates. While it's possible to take out a loan with a 5 or 10% deposit, you will have to pay lenders mortgage insurance. The general rule of thumb is a 20% deposit is a reasonable deposit size.
  • 5. Crunch all your costs (and calculate your concessions). Repayments are one thing, but home buying incurs so many surprise expenses. Budget for removalist costs, stamp duty, application and registration fees and pest inspection reports. It's a scary exercise, but you should also see if you're eligible for a first homeowners grant or stamp duty concessions. If you're buying your first home in NSW and it costs less than $650,000, for example, you won't have to pay any stamp duty. This saves you many thousands of dollars.
  • 6. Position yourself for success. If you've fallen in love with a particular property, other buyers probably have too. Having all your paperwork and deposit together, plus pre-approval puts you in a much better position to snap up your dream home when you find it.
  • 7. Caveat emptor (home buyers, beware!). Imagine buying a car without checking the mileage or the brakes, and then having it breakdown as soon as you buy it. Now imagine it's a house and you've spent possibly a million dollars on a total wreck. Ultimately you as the buyer are responsible for making sure you're getting a quality property for the price you're paying. Get building and pest inspections so you're not stuck with a collapsing, termite-infested disaster. Examine the quality of the property's fittings and construction as best you can. And if there are obvious repairs that need doing (and you're OK with that) make sure you get a quote for repairs and factor that in to your budget.
  • 8. Get expert help. There are professionals who can help you with every step of the home buying process. Buyers agents can help you with the whole buying process, while a mortgage broker can navigate the loan market if you can't. Make sure you have a licensed conveyancer look over your contract thoroughly.

First home buyer scenarios

Here are some more tips for first home buyers depending on the type of property you buy or the strategy you employ:

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Start comparing home loans now

Rates last updated January 18th, 2018
$
Loan purpose
Offset account
Loan type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.69%
3.69%
$0
$0 p.a.
90%
A special limited time offer for owner occupiers. An IMB Transaction Account must be opened with this loan.
3.69%
4.86%
$0
$395 p.a.
90%
A special rate for first home buyers buying residential property and borrowing over $150K. 350K NAB Rewards Points offer available. Terms and conditions apply.
3.74%
3.74%
$0
$0 p.a.
80%
Pay no application fee or ongoing fees with this loan.
3.65%
3.66%
$0
$0 p.a.
90%
A competitive variable rate home loan with no application fee.
3.68%
3.83%
$0
$10 monthly ($120 p.a.)
80%
A low interest rate home loan that allows borrowers to borrow up to 80% of the property value.
3.64%
3.66%
$0
$0 p.a.
80%
A basic home loan with a competitive rate and low fees.
3.65%
4.84%
$0
$395 p.a.
90%
A 2 years fixed platinum package that has $0 application and a loan redraw facility.
3.74%
3.76%
$0
$0 p.a.
90%
A home loan with a special rate for owner occupiers. Free offset account.
3.64%
4.03%
$0
$395 p.a.
80%
Apply for a new owner occupier loan or refinance from another lender and receive this discounted rate.
4.19%
4.19%
$0
$0 p.a.
90%
Get access to a redraw facility and offset account without the annual fee.
3.94%
4.88%
$0
$0 p.a.
90%
Enjoy a low interest rate and borrow up to 90% (with LMI) of your property's value.
3.84%
4.58%
$445
$0 p.a.
90%
A two year discounted rate which reverts to an ongoing life of loan discount afterwards.
3.94%
4.98%
$0
$0 p.a.
90%
Investors can take advantage of a short term fixed rate with no application or ongoing fees.
3.64%
3.67%
$0
$0 p.a.
80%
A low rate home loan with no ongoing fees.
3.97%
4.02%
$445
$0 p.a.
90%
Get a competitive rate without features you may not use.
4.09%
4.83%
$0
$0 p.a.
95%
A low 3-year fixed rate with the option to split your loan for free.
3.49%
4.47%
$0
$375 p.a.
90%
Discount off an already competitive interest rate for loans over $150k. NSW, QLD and ACT residents only.
3.99%
4.77%
$0
$0 p.a.
80%
A competitive 3 year fixed rate with a redraw facility and split loan options, plus no application fee.
4.17%
4.21%
$600
$0 p.a.
95%
A competitive no frills home loan. 350K NAB Rewards Points offer available. Terms and conditions apply.
4.39%
4.78%
$0
$395 p.a.
95%
Package your home loan to get discounts on your interest rate and other financial products.
3.68%
3.69%
$0
$0 p.a.
95%
A no frills loan with a competitive rate and a maximum LVR of 95%.
3.59%
4.42%
$0
$0 p.a.
95%
This competitive introductory rate is a limited time offer for new owner-occupiers

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Marc Terrano

Marc Terrano is a content marketer manager at finder. He's been writing and publishing personal finance content for over five years and loves to help Australians get a better deal.

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Home Loan Offers

Important Information*
loans.com.au Essentials - Variable (Owner Occupier, P&I)

A competitive interest rate home loan with interest only options. Interest rate 3.64%p.a.
comp rate of 3.66%p.a.

NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I) First Home Buyer Special

A special rate for first home buyers buying residential property and borrowing over $150K. 350K NAB Rewards Points offer available. Terms and conditions apply.

NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I)

A fixed rate package with flexible repayment options. 350K NAB Rewards Points offer available. Terms and conditions apply.

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6 Responses

  1. Default Gravatar
    PeachMay 29, 2014

    the First Home Savings Account here is ancient, not updated since 2010. All the dollar limits have since been changed AND the whole scheme has subsequently been scrapped.

    • Staff
      ShirleyMay 29, 2014Staff

      Hi Peach,

      Thank you for your feedback, we’ve now updated the page so it’s relevant for our users.

      Cheers,
      Shirley

  2. Default Gravatar
    JimMay 19, 2014

    Dear sir/madam

    I am buying an established property from a seller
    for $216,000 in fifteen months time to be paid in
    cash from my own savings. The seller is still paying for the mortgage. Could you please tell me
    how and to whom and in what manner should this money be paid?
    Should the payment be made before or after the documentation has been completed?

    Could you please give me an estimate of all other cost including the GST.

    • Staff
      ElizabethMay 20, 2014Staff

      Hi Jim,

      Thanks for your question.

      Usually, payment is made when the seller and the buyer exchange signed copies of the contract of sale. If you are using a solicitor to draw up the documents then they may be able to advise you how the money should be paid, as the payment terms may be specified in the contract.

      As for GST, the ATO has a GST Property Tool that can calculate the GST that will be payable in the sale.

      I hope this has helped.

      Thanks,

      Elizabeth

  3. Default Gravatar
    phillipFebruary 2, 2014

    is the first home owner grant only for new homes

    • Staff
      ShirleyFebruary 3, 2014Staff

      Hi Philip,

      Thanks for your comment.

      Yes the FHOG is only for new homes.

      Cheers,
      Shirley

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