Buying your first home is one of the most significant financial decisions you will make. It is also one of the most process-intensive. This guide walks through every stage — from saving your deposit to collecting the keys.
Before saving a dollar toward a property, establish what you can realistically afford. Use the Borrowing Capacity Calculator to estimate the maximum loan a lender will offer based on your income, expenses, and existing debts. Then model the repayments at that loan amount using the Repayment Calculator to confirm the monthly commitment is manageable with a buffer.
A common mistake is working backwards from a property price you want and hoping the borrowing capacity fits. Start with the capacity and work forward to the property budget.
Most first home buyers target one of three deposit thresholds:
In addition to the deposit, budget 2–3% of the purchase price for upfront costs: stamp duty (check whether you qualify for first home buyer exemptions using the Stamp Duty Calculator), conveyancing ($1,500–$2,500), building and pest inspection ($400–$800), and loan establishment costs.
The FHSSS allows first home buyers to make voluntary super contributions of up to $15,000/year (maximum $50,000 total) and withdraw them — along with deemed earnings — for a home deposit. Contributions and withdrawals are taxed at your marginal rate minus a 30% tax offset, making it more tax-effective than saving in a standard account for higher-income earners. Apply through the ATO's myGov portal before withdrawing.
Federal schemes available to eligible first home buyers:
Once your deposit is on track and you have identified which schemes apply to you, get mortgage pre-approval. This is a lender's assessment of your borrowing capacity before you have found a property. Pre-approval typically lasts 90 days and is essential before attending auctions (unconditional contracts). See the Pre-Approval guide for what to prepare.
With a pre-approved budget, search in suburbs that fit your price range. Attend open homes, research recent sales in the area (Domain and realestate.com.au have sold price history), and compare properties on price per square metre, condition, location, and potential. Do not skip building and pest inspections — even on new builds. The $500 inspection fee is cheap insurance against discovering structural problems after exchange.
Private treaty: Submit a written offer to the agent. Negotiate price, settlement date, and any conditions (subject to finance, building inspection). If accepted, you exchange contracts and pay a deposit (usually 5–10%). See the Cooling-Off Periods guide for your rights after exchange.
Auction: Unconditional and legally binding from the fall of the hammer. You must have pre-approval before bidding and be prepared to exchange immediately if your bid is successful. See the Auction Strategy guide.
Once you have exchanged contracts, submit your formal loan application with the signed contract. The lender will commission a valuation and complete all final checks. Unconditional approval (formal approval) is issued when all conditions are satisfied. Your conveyancer coordinates with the lender to ensure funds are ready for settlement.
Settlement is the legal transfer of the property into your name and the payment of the purchase price to the vendor. Your conveyancer manages the process. On settlement day, the lender transfers the loan funds, your deposit is applied, the balance is paid to the vendor, and you receive the keys. See the Settlement Process guide for a detailed walkthrough.