First Home Buyers

Buying your first home is very exciting and is probably the biggest purchase you will ever make.


To help you get started, we have put together a list of questions that should be considered as you prepare to buy your first home.

How much can I borrow?

How much the banks/lenders will allow you to borrow depends on two main factors:

  • your household income
  • your commitments (current loans, leases & credit cards)
Each bank/lender has a mathematical formula to determine the maximum amount it will lend you.

What will the repayments be?

The amount a bank is prepared to lend you may be inconsistent with the amount you are comfortable borrowing. It is vital that you work out for yourself what loan repayments (and in turn what loan size) you will be comfortable repaying both now and in the future. A good way to work out what you can afford is to set up a budget for all your expenditure. It will help you assess what you can afford now. Alternatively, you can calculate how much you need to cut from your existing spending to afford the new home you desire.  

What deposit will I need?

In most cases, lenders want you to contribute at least 5% of the purchase price plus cover the additional costs associated with buying a property. With some lenders, your contribution does not need to be your own savings. It can be a gift from your family or even borrowed funds. There are lenders that will lend you 100% of the purchase price of a property and even a few that will lend you 100% of the purchase price plus enough to cover the additional costs such as stamp duty. With these loans you do need to be aware that:

  • You need a very stable employment record
  • Sometimes there are higher costs or fees associated with these types of loans
While these loans may not suit everyone, they can be the right solution for certain applicants and a more immediate way to buy a home if you have no/minimal deposit

Am I eligible for the First Home Owner’s Grant?

First home buyers are entitled to a one-off federal government grant of $7000 which is typically received upon settlement of the home loan. In addition, until June 2007 the State Government is giving first home buyers an additional $3K provided they sign a Contract Of Sale before that date and the house price is less than $500,000. For more information visit the government's first home owners grant website. To find out if you qualify for the First Home Owner's Grant you can either go through the First Home Owner Grant questionnaire with your adviser or you can answer the questions below. If you answer is "yes" to any of the below questions, place a tick in the box next to that question.

1. Will this be the first time each applicant and their partner will receive a grant under a First Home Owner Grant Act 2000 in any State or Territory of Australia? Yes
2. Does each applicant and their partner declare that they have never held a relevant interest in residential property, either jointly, separately or with some other person before 1 July 2000, in any State or Territory of Australia? Yes
3. Does each applicant and their partner declare that they have never occupied, a residential property in which they held a relevant interest either jointly, separately or with some other person on or after 1 July 2000, in any State or Territory of Australia? Yes
4. Is each applicant a natural person? Yes
5. Will at least one applicant be a permanent resident or Australian citizen at the time of either settlement or completion of construction? Yes
6. Will at least one applicant be occupying the home as his or her principal place of residence for a continuous period of at least 6 months commencing within 12 months of either settlement or completion of construction? Yes
7. Has each applicant on or after 1 July 2000: a) entered into a Contract of Sale or Agreement for the purchase of a home in Victoria? OR b) entered into a comprehensive building contract to have a home built on their land in Victoria? OR c) in cases of an owner-builder, commenced construction (laying of foundations) of a home on their land in Victoria? Yes

What extra costs are involved with buying a home?

Aside from the purchase price there are other costs involved with buying a home. These include:

  • Stamp duty on the Property Transfer - this is calculated on the purchase price of the property.
  • Lenders Mortgage Insurance (LMI) - an insurance premium you pay to insure the bank against the risk that you may not repay the loan. This only applies if you borrow more than 80% of the purchase price and is a one-off premium - not an annual fee.
  • Registration of title - government fees for transferring and registering the property into your name.
  • Registering/discharging mortgages - government fees associated with setting up or paying out mortgages.
  • Legal/conveyancing fees - fees charged by your lawyer/conveyancer to look after the transfer of the property into your name.
  • Loan application fee - a fee charged by the lender for setting up a loan (if applicable).
Usually these fees will amount to around 5% of the purchase price (if LMI is not involved).

How do I learn more?

Make an appointment with one of our Advisers to learn more. Click here to request an appointment online and an adviser will call you back to arrange a suitable time.