First Home Buyer's Guide to Getting a Home Loan

Buying your first home is one of the biggest financial decisions you'll ever make. The process can feel overwhelming, but with the right guidance, it doesn't have to be. Here's everything you need to know about getting your first home loan in Australia.

Step 1: Work Out Your Budget

Before you start looking at properties, you need to understand how much you can afford. This involves looking at your income, expenses, existing debts, and savings. A mortgage broker can help you get a clear picture of your borrowing power and what repayments will look like.

Step 2: Save Your Deposit

Most lenders require a minimum 5% deposit, but aiming for 20% will help you avoid paying Lenders Mortgage Insurance (LMI). First home buyers may be eligible for government schemes that allow a smaller deposit.

Government Grants & Schemes

• First Home Owner Grant (FHOG) — A one-off payment to help with the cost of buying or building your first home. The amount varies by state.
• First Home Guarantee — Allows eligible buyers to purchase with as little as 5% deposit without paying LMI.
• Stamp Duty Concessions — Many states offer reduced or zero stamp duty for first home buyers below certain price thresholds.

Step 3: Get Pre-Approved

Pre-approval gives you a clear idea of how much a lender is willing to lend you. It also shows sellers and agents that you're a serious buyer. Pre-approval typically lasts 3–6 months.

Tip: Getting pre-approved before you start house hunting saves time and helps you act quickly when you find the right property.

Step 4: Find Your Property

Once pre-approved, you can start searching with confidence. Consider factors like location, property type, future growth potential, and proximity to schools, transport, and amenities.

Step 5: Make an Offer

Whether buying at auction or via private sale, understanding the process in your state is important. Your broker can help coordinate with your solicitor or conveyancer to ensure everything runs smoothly.

Step 6: Formal Approval & Settlement

Once your offer is accepted, your broker submits the full loan application. The lender will conduct a property valuation and assess your application. Upon approval, settlement is typically 30–90 days, depending on the contract terms.

How a Mortgage Broker Helps

A mortgage broker compares loans from multiple lenders, handles the paperwork, and guides you through the entire process. For first home buyers, this expertise is invaluable — and the service is typically free, as the broker is paid by the lender.