Buying your first home is one of the most significant financial decisions you’ll make. This comprehensive first home buyer guide walks you through every essential step, from saving your deposit and securing pre-approval to finding the right property, navigating inspections, finalizing your mortgage, and completing settlement. Whether you’re just starting to save or ready to make an offer, this guide provides the roadmap you need.

Step 1: Check Your Eligibility and Get Your First Home Buyer Benefits

First-Home Owner (FHO) Definition:

To qualify as a first home buyer in Australia, you must meet specific criteria:

• Have never owned a residential property in Australia (or only owned a life-tenancy interest)
• Be an Australian citizen or permanent resident
• Live in the property as your principal place of residence (not as an investment property)
• Occupy the property within 12 months of settlement for at least 6 consecutive months

First Home Buyer Benefits by State:

State	Stamp Duty Exemption/Concession	First-Home Grant	Other Benefits
Victoria	Full exemption up to $600,000	Up to $10,000 for new builds	First-Home Loan Deposit Scheme (5% deposit with government guarantee)
New South Wales	Full exemption up to $800,000	Up to $20,000 for regional areas	Shared Equity Scheme (government co-owns up to 40%)
Queensland	Exemption/concession up to $500,000	Up to $15,000 for new builds	First-Home Buyer Loan Scheme with reduced deposit
South Australia	Exemption up to $650,000	Up to $15,000 for new builds	HomeStart Finance with low deposit options

Potential Savings from First Home Buyer Benefits:

On a $500,000 property purchase in Victoria:

• Stamp duty savings: $15,000 to $20,000
• First-home owner grant: $10,000 (if purchasing new build)
• Total benefit: $25,000 to $30,000

These government incentives significantly reduce your upfront costs and make homeownership more accessible for first-time buyers.

Step 2: Save Your Deposit and Improve Your Credit Score

Deposit Target Guidelines:

• Minimum: 5% (available through government-backed guarantee schemes, requires Lenders Mortgage Insurance)
• Standard: 10-15% (reduces mortgage insurance premiums, access to better interest rates)
• Strong: 20%+ (avoids mortgage insurance entirely, secures best interest rates, stronger negotiating position)

Deposit Requirements for a $500,000 Property:

• 5% deposit: $25,000 (plus LMI of $8,000-$15,000)
• 10% deposit: $50,000 (plus LMI of $5,000-$10,000)
• 20% deposit: $100,000 (no LMI required)

Effective Savings Strategy:

• Set a realistic savings goal with a target date (12-24 months is achievable for most buyers)
• Open a high-interest savings account specifically for your deposit
• Consider the First Home Super Saver Scheme (access up to $50,000 from super contributions)
• Avoid taking on new debt (credit cards, car loans, personal loans reduce borrowing capacity)
• Build an emergency fund ($5,000-$10,000) separate from your deposit savings
• Track every expense and cut unnecessary spending

Improve Your Credit Score Before Applying:

• Obtain your free credit report from check your credit report providers
• Dispute any errors or inaccuracies on your credit file
• Pay all bills on time (electricity, phone, internet, rates)
• Avoid multiple credit applications (hard inquiries lower your score)
• Keep credit card balances below 30% of your available limit
• Close unused credit cards and store cards
• Register on the electoral roll at your current address

Step 3: Get Mortgage Pre-Approval

What is Pre-Approval?

Pre-approval is when a lender confirms the maximum amount you can borrow based on your income, expenses, debts, and credit history. It gives you confidence when making offers and shows sellers you’re a serious buyer.

Benefits of Pre-Approval:

• Know your exact budget before property searching
• Gain negotiating power with sellers
• Speed up the purchase process once you find the right property
• Identify and resolve any credit issues early
• Lock in interest rates (for limited periods with some lenders)

Documents Required for Pre-Approval:

• Proof of identity (driver’s license, passport)
• Last 2-3 payslips
• Last 2 years of tax returns (if self-employed)
• 3-6 months of bank statements
• Details of existing debts and liabilities
• Proof of deposit savings (bank statements showing genuine savings)

For a detailed walkthrough of the mortgage pre-approval process, including how lenders calculate borrowing capacity, refer to our comprehensive guide.

Step 4: Search for Your First Home Buyer Property

Define Your Property Criteria:

• Location: proximity to work, schools, public transport, amenities
• Property type: house, townhouse, apartment, unit
• Number of bedrooms and bathrooms
• Parking requirements (garage, carport, street parking)
• Outdoor space (yard, balcony, courtyard)
• Future growth potential for capital appreciation

Where to Search:

• Real estate websites (realestate.com.au, domain.com.au)
• Real estate agents and buyer’s agents
• Auctions and open homes
• Off-market properties through local agents and networks

Property Inspection Checklist:

• Structural condition (cracks, foundation, roof)
• Plumbing and electrical systems
• Pest issues (termites, rodents)
• Drainage and water damage
• Natural light and ventilation
• Noise levels from roads, trains, neighbors
• Street appeal and neighborhood condition

Step 5: Make an Offer and Navigate Contract Negotiations

Research Comparable Sales:

Before making an offer, research recent sales of similar properties in the area to determine fair market value. Use online property reports and speak with local agents.

Making Your Offer:

• Start below the asking price (typically 5-10% lower for negotiation room)
• Include conditions: building and pest inspection, finance approval, cooling-off period
• Be prepared to negotiate on price, settlement date, and inclusions
• Get everything in writing

Contract Review:

Always have a solicitor or conveyancer review the contract before signing. They will check for unusual clauses, zoning issues, easements, and other legal considerations.

Step 6: Complete Building and Pest Inspections

Why Inspections Are Essential:

• Identify structural defects, safety hazards, and maintenance issues
• Discover pest infestations (termites, borers, rodents)
• Provide negotiating leverage for price reductions or repairs
• Avoid costly surprises after settlement

Inspection Costs:

• Building inspection: $300-$600
• Pest inspection: $200-$400
• Combined building and pest: $500-$900

A comprehensive property purchase due diligence checklist ensures you cover all essential inspections and legal checks.

Step 7: Finalize Your Home Loan and Complete Settlement

Formal Loan Approval:

Once your offer is accepted, submit your formal loan application. The lender will conduct a property valuation and verify all documentation before issuing final approval.

Settlement Preparation:

• Arrange building and contents insurance
• Book removalists or plan your move
• Organize utilities connection (electricity, gas, water, internet)
• Conduct final property inspection before settlement
• Transfer deposit and remaining funds to your solicitor

Settlement Day:

On settlement day, your solicitor will exchange contracts and transfer ownership. You’ll receive the keys and officially become a homeowner. For a detailed breakdown of the entire settlement process in Australia, including timelines and costs, consult our step-by-step guide.

First Home Buyer Checklist Summary

Pre-Purchase Phase:

• Check eligibility for first home buyer benefits
• Save deposit and improve credit score
• Get mortgage pre-approval
• Research suburbs and property types

Purchase Phase:

• Attend inspections and auctions
• Make offer and negotiate contract
• Complete building and pest inspections
• Finalize home loan approval

Settlement Phase:

• Arrange insurance and utilities
• Conduct final property inspection
• Complete settlement and receive keys
• Move in and enjoy your new home

By following this comprehensive first home buyer guide, you’ll navigate the property purchase process with confidence. Take advantage of Australian government first home buyer schemes to maximize your savings and make homeownership a reality. Start your journey today by checking your eligibility and setting your savings goal.

Related Posts

• mortgage pre-approval process
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• property purchase due diligence
• property inspection
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Further Reading

• Australian government first home buyer schemes
• check your credit report