First Home Buyers’ Guide

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Buying your first home is downright confusing, especially when you are trying to work out how much you can afford, whether your savings are enough and what comes next. With so many moving parts, it is not always obvious where to start or what to focus on first.

This first home buyers’ guide breaks it down into clear, practical steps so you can get your head around what matters, what can wait and what to do next without overthinking it.

What buying your first home involves

Buying your first home is a series of steps that build on each other, from understanding your finances through to securing a property and settling the purchase. It follows a fairly clear path, but how it plays out can look different depending on your situation.

It usually starts with getting a clear picture of your finances. That means looking at your income, savings, expenses and any existing commitments so you know what you are actually working with before you start making decisions.

Understanding your borrowing position

Lenders look at your financial position to work out how much you may be able to borrow. This gives you a starting point, but it does not always reflect what will actually feel comfortable once repayments begin.

A lender might approve a certain amount, but that does not automatically mean it fits your lifestyle. Looking at your budget in practical terms helps you figure out what you can realistically manage alongside your regular expenses and the ongoing costs of owning a home.

Once you have a clearer picture of your budget, the next steps are usually confirming your borrowing position, looking at loan options and starting your property search.

How much deposit you may need

Your deposit influences how much you can borrow and what your home loan may look like. A 20% deposit is often used as a benchmark, as it can help you avoid Lenders' Mortgage Insurance (LMI). However, it is not the only pathway into the market.

The 20% deposit benchmark

A larger deposit can give you access to more loan options and may reduce additional costs. It can also place you in a stronger position when applying for finance. That said, reaching a 20% deposit is not always realistic for every buyer, especially when entering the market for the first time.

Lower deposit options

In some cases, it is possible to buy with a smaller deposit, depending on your circumstances and lender requirements. These options can allow you to enter the market sooner, but they may involve additional costs or stricter criteria. Understanding how these pathways work can help you decide whether entering the market earlier suits your situation.

There can also be a no-deposit option with a guarantor home loan; this is where a family member uses their property as security so you can borrow up to 100% of the purchase price without needing a deposit.

Government support

Some first home buyers may be eligible for government support that can reduce the deposit required or provide financial assistance. This can include initiatives such as the First Home Owner Grant, stamp duty concessions or low-deposit schemes that allow eligible buyers to purchase with a smaller deposit without paying Lenders’ Mortgage Insurance.

These programs often come with specific eligibility criteria, property limits and conditions that vary by state and territory. Because these schemes can change over time, it is important to view them as a potential benefit rather than something to rely on.

What costs to plan for

The purchase price and upfront costs are only part of the overall cost, with additional expenses before and after settlement that can affect your budget, including:

Upfront costs

Upfront costs may include stamp duty, legal or conveyancing fees and inspections and are usually payable before or at settlement.

Ongoing costs

Ongoing costs include mortgage repayments, council rates, insurance and maintenance. These expenses continue after you move in and may change over time, so allowing some flexibility in your budget can make them easier to manage.

Situational costs

Some costs depend on your circumstances, such as moving expenses, initial furnishings or future improvements. While not always immediate, they can still affect your overall budget.

What a first home buyer’s journey might look like

Sarah is looking at a $600,000 property and has around $70,000 saved. After setting some of that aside for costs like stamp duty, legal fees and inspections, her deposit is closer to $50,000.

With that in mind, she looks at what her repayments could be and compares that against her current expenses. If repayments are around $2,500 per month, she needs to think about what that actually means for her day-to-day spending, whether there is enough buffer left over and how comfortable that feels over the long term.

Working through the numbers like this can quickly show where things need adjusting, whether that is saving a larger deposit, looking at a different price range or waiting until her position feels more stable.

(This is a general example only. Figures and outcomes can vary depending on individual circumstances.)

Take the next step with The Happy Finance Company

If you are getting serious about buying your first home, speaking with a broker helps you cut through the noise and understand what you can actually do next. No guesswork, no trying to piece everything together on your own.

At The Happy Finance Company, you work with a dedicated broker who takes the time to understand your situation and does the hard stuff with you. We work out how much you can borrow, deal with the banks and get your application ready so you don’t have to chase it all yourself. You are not passed around, and you are not left guessing. You’ve got one person in your corner from start to finish.

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