Buying Your First Home in Australia
Buying your first home is one of the biggest financial milestones in life. However, many first home buyers in Australia struggle with understanding deposits, loan requirements, and government incentives.
At Believe Finance, we simplify the process so you can move from renting to owning with clarity and confidence.
This guide walks you through everything you need to know in 2026.
Step 1: Understand How Much You Can Borrow
Before looking at properties, you need to understand your borrowing capacity.
Lenders assess:
- Income (salary, overtime, business income)
- Living expenses
- Existing debts (credit cards, car loans)
Credit score
Why this matters
Your borrowing power determines your property price range. Many buyers start house hunting before knowing their limits, which leads to disappointment.
Step 2: Saving for a Home Deposit
In Australia, most lenders require:
- 20% deposit (ideal scenario)
- 5%–10% deposit (first home buyer options available)
Example:
If a property costs $700,000:
- 20% deposit = $140,000
- 10% deposit = $70,000
If your deposit is below 20%, you may need Lenders Mortgage Insurance (LMI).
Step 3: First Home Buyer Grants & Incentives
Depending on your state or territory, you may be eligible for:
1. First Home Owner Grant (FHOG)
A one-off government payment for eligible first home buyers.
2. Stamp Duty Concessions
Reduced or waived stamp duty depending on property value.
3. First Home Guarantee Scheme
Allows eligible buyers to purchase with as little as 5% deposit without LMI.
Step 4: Get Home Loan Pre-Approval
Pre-approval is a conditional approval from a lender confirming your borrowing capacity.
Benefits:
- Know your exact budget
- Stronger negotiating position
- Faster settlement process
- Shows sellers you are serious
Step 5: Finding the Right Property
Once pre-approved, you can confidently:
- Attend inspections
- Compare suburbs
- Make offers
- Bid at auctions
Step 6: Final Loan Approval
After you find a property, your lender will:
- Value the property
- Finalise documents
- Approve the loan unconditionally
Common First Home Buyer Mistakes
- Not checking borrowing capacity early
- Underestimating extra costs (stamp duty, legal fees)
- Applying for loans before speaking to a broker
- Ignoring credit score issues
Final Thoughts
Buying your first home is achievable with the right plan. Understanding your borrowing power, deposit requirements, and available grants puts you in a strong position.
