Get your finances in order – save a deposit, improve your credit score, and secure loan pre-approval.
Explore government support – First Home Owner Grant (FHOG), stamp duty concessions, and low-deposit schemes.
Choose the right property – research suburbs, attend inspections, and compare houses, townhouses, and apartments.
Make your move – place an offer or bid at auction, negotiate terms, and engage a conveyancer.
Settlement prep – complete legal checks, organise insurance, and connect utilities.
Move in with confidence – collect the keys, budget for ongoing costs, and enjoy your first home.

First Home Buyer Guide Australia 2025: Grants, Loans & Smart Buying Tips

Buying your first home is one of life’s biggest milestones. It represents independence, stability, and a long-term investment in your future. For many Australians, stepping onto the property ladder is a dream that requires careful planning and informed decision-making. Unlike renting, homeownership offers the security of building equity and the pride of having a place that’s truly your own.

That said, becoming a first-time buyer in Australia is not without its challenges. Rising property prices in major cities, the struggle to save a large enough deposit, and the complexities of securing a first home loan can feel overwhelming. Many buyers also face uncertainty when navigating first home buyer stamp duty exemption thresholds, comparing loan products, and deciding whether to use a mortgage broker or approach banks directly.

These challenges are reflected in the numbers. As of Q2 2025, the number of new first-home buyer loan commitments increased modestly—by 1.7% in volume and 5.7% in value—demonstrating steady but cautious demand from prospective buyers. Meanwhile, the average new loan size has ballooned, hitting around $555,000 for first-home buyers.

On the flip side, this year saw a striking 9.1% growth in first-home buyer loans overall, with investor-style “rentvesting” loans surging even faster at 21.4%—a shift that highlights the affordability pressures many face.

The good news is that you don’t need to go through the process alone or unprepared. This comprehensive guide is designed to walk you through every step—from getting your finances in order to accessing government grants and concessions, such as the First Home Owner Grant (FHOG), right through to choosing the right property, making an offer, and preparing for settlement. We’ll also cover essential home buying tips for inspections, legal requirements, and moving in smoothly, so you can avoid common pitfalls and approach the process with confidence.

Whether you’re looking to buy in a bustling city suburb or a regional area, this guide provides the tools and insights to help you make informed decisions. With the right knowledge, planning, and understanding of concessions like stamp duty exemptions, your first home can be more than just a dream—it can be a smart, achievable reality.

Understanding the Australian Property Market

Step 1 – Understanding the First Home Buyer Journey

Buying your first home isn’t a single transaction — it’s a multi-stage journey that requires careful planning, financial discipline, and legal awareness. Many first-time buyers underestimate the hidden steps between saving for a deposit and finally moving in. Below, we’ll walk through the journey so you know what to expect.

1. Setting Financial Foundations

Before you even begin house-hunting, you need to assess your financial health. This includes:

Savings habit – Lenders want to see consistent saving patterns, often over 3–6 months.
Credit score – A strong credit score (700+) improves your chances of securing a loan with better rates.
Debt management – Outstanding debts like car loans, HECS/HELP, or credit cards can reduce borrowing power.

Pro Tip: Many buyers focus only on the deposit, but banks assess your entire financial profile. Clearing debts and showing financial stability can boost your borrowing limit.

2. Determining Borrowing Power

Your borrowing power depends on your income, expenses, deposit size, and current interest rates. Lenders use a “serviceability test” to ensure you could afford repayments even if interest rates rise by 2–3%.

Online calculators provide a rough guide, but actual borrowing power can vary by $50k–$100k depending on the lender.
Mortgage brokers can compare dozens of lenders to find the best fit for your situation.

3. Saving for a Deposit

The deposit is the biggest hurdle for most first home buyers. In Australia:

Standard deposit = 20% of the property price (to avoid Lenders Mortgage Insurance, or LMI).
First Home Guarantee Scheme allows buyers to purchase with as little as 5% deposit.
Some lenders offer 2% deposits under special schemes, but conditions apply.

Example: On a $600,000 home in Victoria, you’d need:

$120,000 (20% deposit, no LMI) OR
$30,000 (5% deposit under First Home Guarantee).

4. Understanding Upfront & Ongoing Costs

Beyond the deposit, you’ll face upfront costs like:

Stamp duty (if exemptions don’t apply)
Loan application fees
Conveyancing & legal fees
Building & pest inspections
Moving costs

And ongoing costs such as:

Mortgage repayments
Council rates & utilities
Insurance (home & contents)
Strata/body corporate fees (if buying an apartment)

5. House Hunting & Making Offers

Once you’re financially ready, you can start house hunting:

Research suburbs for growth potential, infrastructure, and lifestyle.
Attend inspections to understand property conditions.
Get pre-approval from your lender before making an offer.

6. Settlement & Ownership

The final step is settlement, where ownership is legally transferred:

Usually takes 30–90 days after signing the contract.
Involves paying the balance of the purchase price, stamp duty, and legal fees.
You officially become the legal owner on settlement da

Preparing Your Finances for Your First Home

How Much Deposit Do You Really Need?

For most first-time buyers in Australia, a 20% deposit is ideal as it avoids paying Lenders Mortgage Insurance (LMI). However, many lenders accept deposits as low as 5% with the support of government schemes or if you’re willing to pay LMI. Knowing your required loan-to-value ratio (LVR) helps determine how much you’ll need upfront.

Saving Strategies for First-Time Buyers

Saving for a deposit can be one of the hardest steps. Setting up a high-interest savings account, automating transfers, and cutting non-essential spending are common strategies. Some buyers use the First Home Super Saver Scheme to boost savings through tax advantages. Using a home loan calculator can also help set realistic goals.

Credit Scores and Home Loan Eligibility in Australia

Your credit score significantly impacts your borrowing capacity. Lenders look at your credit history, income, and existing debts when assessing your eligibility. A higher score improves your chances of approval and may even secure lower interest rates. Regularly checking your credit report ensures there are no surprises during mortgage pre-approval.

Types of Home Loans (Variable, Fixed, Split)

Home loans in Australia come in several forms. Variable loans fluctuate with interest rates, offering flexibility but less certainty. Fixed-rate loans lock in repayments for a set period, providing stability. Split loans combine both, allowing buyers to balance security and flexibility.

Using a Mortgage Broker vs Going Directly to a Bank

A mortgage broker can compare multiple lenders to find competitive options, often saving time and money. Going directly to a bank may suit buyers with a long-standing relationship, but it limits options. For many first home buyers, brokers provide guidance throughout the application process.

First Home Buyer Grants, Schemes, and Concessions

First Home Owner Grant (FHOG) – State by State Breakdown

The First Home Owner Grant (FHOG) is a one-off payment designed to help first-time buyers enter the property market. Each state and territory sets its own rules and amounts. For example, in Victoria, eligible buyers may receive up to $10,000 for new builds, while Queensland and Western Australia also offer grants of similar value. Since eligibility varies, it’s essential to check your state’s revenue office for details.

Stamp Duty Exemptions and Concessions

One of the biggest upfront costs when buying a home is stamp duty. Fortunately, many states offer exemptions or concessions for first-time buyers. For instance, in Victoria, buyers purchasing a home under a certain price threshold may be exempt from paying stamp duty altogether. These first home buyer incentives can save thousands, significantly improving housing affordability.

First Home Guarantee (FHBG) & Family Home Guarantee

The First Home Guarantee (FHBG) allows eligible buyers to purchase with as little as a 5% deposit, without needing to pay Lenders Mortgage Insurance, thanks to government backing. Similarly, the Family Home Guarantee supports single parents with deposits as low as 2%.

Shared Equity Schemes and Low Deposit Options

Several states offer shared equity schemes, where the government contributes part of the purchase price in exchange for a share of the property. This reduces the loan amount and makes buying more accessible. Low deposit options, paired with government housing assistance, also ease the entry point for many buyers.

How to Apply for Grants & Eligibility Criteria

Applications for these programs are usually made through your lender or mortgage broker when applying for a loan. Each scheme has criteria such as income caps, property value limits, and residency requirements. Always confirm eligibility early to maximise savings.

Choosing the Right Property

Deciding Between House, Apartment, or Townhouse

Your first home doesn’t have to be your forever home—it’s often a stepping stone into the property market. Houses generally provide more space and land, but they come with higher purchase prices and maintenance costs. Apartments can be more affordable, particularly in capital cities, but they usually involve strata fees and less privacy. Townhouses offer a middle ground, balancing affordability and lifestyle. The right choice depends on your budget, lifestyle needs, and long-term goals.

Location Matters – Suburbs vs City Living

Location is a key factor in property value and lifestyle. City living offers convenience and proximity to jobs but often at a premium price. Outer suburbs or regional towns provide more affordable entry points, with the potential for long-term growth as infrastructure develops. Consider transport links, schools, healthcare, and community amenities when making your decision.

Evaluating Growth Potential and Lifestyle Needs

Beyond the price tag, look for areas with strong property trends such as population growth, planned infrastructure projects, and employment hubs. These factors can drive capital growth over time. Equally important is lifestyle—your first home should suit your daily needs, whether that’s being close to work, schools, or recreational spaces.

Red Flags to Watch Out for in Property Inspections

Always attend multiple inspections and watch for issues like dampness, cracks, faulty wiring, or pest problems. A professional building and pest inspection is highly recommended to avoid costly surprises.

The Role of Real Estate Agents

Real estate agents represent the seller, not the buyer. While they can provide information about the property, always do your own research and consider getting independent advice before making an offer.

The Home Buying Process Step-by-Step

Buying your first home can feel overwhelming, but breaking the process into clear steps makes it far more manageable. This step-by-step guide is designed to walk you through each stage, from securing finance to finalising contracts. For a broader understanding of everything involved in purchasing your first property, you can also explore The Ultimate First Home Buyer Guide: Everything You Need to Know.

Getting Loan Pre-Approval

A mortgage pre-approval shows sellers and real estate agents that you are a serious buyer. It also gives you a realistic picture of your borrowing capacity, ensuring you stay within budget and avoid disappointment later.

Approach at least two to three lenders (or use a mortgage broker) for competitive offers.
Ensure your credit report is in order and free of discrepancies.
Gather necessary documents early—payslips, tax returns, and bank statements.

Pre-approval typically lasts three to six months, giving you flexibility in your property search.

House Hunting and Attending Inspections

Once finance is in place, you can start house hunting with confidence.

Attend multiple open inspections—don’t rush your decision.
Take notes and photos to compare properties.
Look beyond presentation—evaluate future resale value, neighbourhood safety, and ongoing costs like strata fees or council rates.
Don’t hesitate to ask questions about repairs, history of renovations, or potential issues like flooding.

Remember, the right property balances lifestyle needs and financial reality.

Making an Offer – Auction vs Private Sale

When you find a property you love, the next step is making an offer.

Private Sale: You make an offer through the agent, often with room for negotiation. Conditions like finance approval or building inspections may apply.
Auction: A fast-paced, competitive environment requiring unconditional bidding. Research comparable sales, set your budget limit, and avoid emotional overspending.

Tip: Always have your deposit accessible before auction day.

Negotiation Tips for First-Time Buyers

Negotiation can save you thousands.

Be prepared to negotiate not just on price, but also on inclusions (like appliances or furnishings) and settlement dates.
Strengthen your bargaining power with loan pre-approval and a conveyancer on standby.
Don’t show too much eagerness—agents can use this to push prices higher.

Knowledge is your best leverage.

Contract of Sale Explained

The Contract of Sale is the formal agreement outlining the terms of your purchase. It typically includes:

Purchase price and deposit
Settlement period
Special conditions (subject to finance, inspections, or repairs)

Always have a legal professional review the contract before signing—rushing this step could cost you significantly.

Hiring a Conveyancer or Solicitor

A conveyancer (or solicitor) ensures the legal transfer of property ownership is completed correctly. They will:

Verify the property’s title and ownership
Check for outstanding rates or land tax obligations
Ensure compliance with local property laws

Hiring a professional reduces risk, protects your investment, and provides peace of mind.

Preparing for Settlement

What Happens Between Exchange and Settlement?

After contracts are exchanged, your lender finalises the home loan. During this period, the conveyancer conducts final checks and ensures all legal and financial requirements are met.

Final Inspection Checklist

Before settlement, you’re entitled to a final inspection. Check that fixtures and fittings are in place, no new damage has occurred, and the property is in the agreed condition.

Settlement Day Explained

On settlement day, your solicitor or conveyancer coordinates payment with the seller’s representatives. Once funds are transferred and documents lodged, ownership is officially transferred to you.

Organising Utilities (Electricity, Water, Gas, Internet)

Arrange connections in advance to avoid delays when moving in. Utility providers may require a few business days to activate services.

Home Insurance – Why You Need It Before Moving In

Lenders typically require building insurance to be in place before settlement. It protects you against damage from unforeseen events such as fire, flood, or theft.

Moving In and Beyond

Budgeting for Ongoing Costs (Rates, Insurance, Maintenance)

Ownership costs extend beyond mortgage repayments. Budget for council rates, strata fees, home insurance, and routine maintenance.

Setting Up Your New Home – Furniture, Appliances, Renovations

Prioritise essentials first. Consider second-hand or budget-friendly options for furniture and appliances while you adjust to new expenses.

Strata Fees and Body Corporate – What First-Time Buyers Should Know

If buying an apartment or townhouse, you’ll need to pay strata levies. These cover shared maintenance, insurance, and amenities. Review body corporate rules carefully before purchase.

Planning for the Future – Refinancing and Investment Opportunities

As your equity grows, consider refinancing to secure better rates or to fund renovations. Your first home can also act as a stepping stone toward property investment.

Common Mistakes First Home Buyers Should Avoid

Underestimating extra costs like stamp duty, conveyancing, and inspections.
Skipping pre-approval before house hunting.
Overextending your budget beyond safe repayment levels.
Failing to explore government housing assistance schemes.
Rushing into contracts without proper legal review.

Expert Tips for First-Time Buyers in Australia

Start with a clear budget and stick to it.
Use a mortgage broker to compare loans across multiple lenders.
Consider upcoming infrastructure projects when choosing a suburb.
Treat your first home as a stepping stone, not necessarily your forever home.
Build a financial buffer for unexpected costs after settlement.

Conclusion: Confidently Take the Next Step Toward Homeownership

Buying your first home in Australia can feel overwhelming, but with the right preparation, expert advice, and clear steps, you can make informed decisions and avoid costly mistakes. From securing pre-approval to understanding contracts and negotiating effectively, each stage of the journey brings you closer to the keys in your hand.

For additional reliable guidance, you can explore resources like the First Home Owner Grant (FHOG) – State Revenue Office to understand eligibility and benefits, the MoneySmart – Buying a Home guide for financial tips, and Housing Advice – Services Australia for broader support and assistance options.

At the same time, remember that every buyer’s situation is unique. While official sites provide the rules and frameworks, practical insights and step-by-step breakdowns like this guide give you the confidence to act.

FAQs – First Home Buyer Questions Answered

What is the minimum deposit required to buy a home in Australia?
Most lenders require at least 5–10%, but 20% avoids LMI.

Can first home buyers avoid stamp duty?
Yes, many states offer exemptions or concessions for eligible buyers under certain property value thresholds.

How long does settlement take in Australia?
Generally 30–90 days, depending on the contract.

Do I need a mortgage broker?
Not mandatory, but brokers can access multiple lenders and may secure better deals.

Can I use my superannuation to buy my first home?
Yes, under the First Home Super Saver Scheme, you can use voluntary contributions to boost your deposit.

What happens if my loan gets rejected after making an offer?
If your offer is conditional on finance, you may withdraw without penalty. Always include this clause.

References