Ultimate First Home Buyers Guide

  • Ultimate First Home Buyers Guide

Ultimate First Home Buyers Guide: From Deposit To Keys

Buying your first home in Australia can feel impossible when you’re juggling rising prices, interest rates, and confusing lender rules. This guide walks through every step, from saving a deposit to getting the right home loan approved the first time.​

Why now still matters

Despite rate changes and a tight housing market, government grants, lender discounts, and smarter strategies mean first home buyers still have real opportunities. The key is knowing your borrowing power and acting before conditions shift again.

Key questions this blog answers

  • How much deposit do first home buyers really need in Australia?
  • What is borrowing power and how do banks calculate it?
  • How do higher RBA cash rates affect home loan repayments?
  • What first home buyer schemes and stamp duty concessions are available?
  • How do you compare variable vs fixed rate home loans?

Understanding the first home loan basics

Lenders look at three core things: income, living expenses, and existing debts. They stress-test your loan at a higher “assessment rate” to ensure you could still afford repayments if interest rates rise.

Your borrowing power is shaped by:

  • Gross income and stability of employment
  • Existing loan and credit card limits
  • Dependants and living costs
  • Type of property and location

Deposit, LMI and no/low deposit options

In most cases you will need:

  • 20% deposit to avoid Lenders Mortgage Insurance (LMI)
  • 5–15% deposit with LMI, or via government guarantees where eligible

Some first home schemes allow you to purchase with as little as 5% deposit without paying LMI, if you meet income, property price caps and other criteria.

Variable vs fixed vs split

  • Variable rate home loan: Flexible, usually allows extra repayments and offset accounts, but repayments can move with RBA cash rate changes.
  • Fixed rate home loan: Certainty of repayment for a set period but less flexibility for extra repayments or refinance.
  • Split home loan: Part variable, part fixed, blending certainty and flexibility.

Practical steps for first home buyers

  • Check your borrowing power using a borrowing capacity calculator.
  • Review your bank statements and cut discretionary expenses 3–6 months before applying.
  • Pay down or close unused credit cards and personal loans.
  • Obtain a pre-approval so you know your price range.
  • Work with a mortgage broker to compare products from multiple lenders, not just your own bank.