Work out the deposit you actually need
A deposit of 20% of the price usually avoids lenders mortgage insurance, which protects the lender and is paid by the borrower. Smaller deposits are possible, but usually mean paying that insurance or using a government guarantee.
Your savings also have to cover the upfront costs of buying, not only the deposit. Budget for both before settling on a price range.
Check the government schemes and concessions
The Australian Government’s Home Guarantee Scheme, run by Housing Australia, can let eligible first home buyers buy with a deposit as low as 5% without paying lenders mortgage insurance, subject to eligibility rules and property price caps.
Every state and territory also offers first home buyer stamp duty concessions or exemptions, and some offer grants for new homes. These can be worth tens of thousands of dollars, and the rules change often, so check the official sources for your state before you buy. The stamp duty pages on this site show the general rates, before any concession.
Know your borrowing power and repayments
Lenders assess your income, living expenses and existing debts, and test the loan at a rate at least 3 percentage points above the one you would pay. A pre-approval tells you what one lender would consider before you make an offer.
Check the repayments against your own budget, not just the lender’s limit. A loan you can comfortably repay if rates rise is safer than the largest loan on offer.
Budget for every upfront cost
Beyond the deposit and any stamp duty, allow for conveyancing or legal fees, building and pest inspections, loan application or establishment fees, lenders mortgage insurance if it applies, and moving costs.
At settlement there are also adjustments for council and water rates the seller has already paid. Ask your conveyancer for an estimate early so the total does not surprise you.
Sources & further reading
- Housing Australia — Home Guarantee Scheme
- Moneysmart — buying a home
- Stamp duty by state and territory
Market context and illustrative scenarios are not valuations or individual financial advice. Definitions and source availability can change.