Buying your first home

This type of home loan is tailored to help Australians purchase their first property by easing upfront expenses. It supports access to the housing market through flexible deposit options and potential exemptions from Lenders Mortgage Insurance (LMI).

Key Features:
• Government schemes may allow deposits as low as 5%
• LMI can be waived for eligible applicants
• Flexible lending criteria in many cases
Why It Helps: Avoiding the need for a 20% deposit (e.g., $120k for a $600k home) makes homeownership more achievable.

Popular Government Programs:
• First Home Guarantee: 5% deposit, No LMI
• Regional Guarantee: For eligible regional buyers
• Family Home Guarantee: 2% deposit for single parents, income cap $125k

Accessibility depends on personal circumstances, but common options include:
• Government-Backed Loans: Competitive rates, 5% deposit, no LMI, but limited in number
• Low-Doc Loans: Ideal for self-employed; rely on business records, often with slightly higher interest
• Broker-Assisted Loans: Access to many lenders, cashback offers, and personalised guidance

Beyond the interest rate, consider:
• Offset account availability
• Fixed vs variable rate options
• Any ongoing or hidden fees
Watch out for introductory offers that may increase later.

As of December 2024, national average: $536,561
By State:
• NSW: $811,000
• VIC: $632,000
• QLD: $635,000
• SA: $655,000
• WA: $598,771
• ACT: $650,000
• TAS: $462,661
• NT (Aug 2024): $416,667

Strategies include:
• Reducing debts
• Increasing income
• Maintaining a strong credit score
• Demonstrating consistent savings
• Structuring the application with broker help

 Be prepared for:
• Stamp duty (can reach up to 5.5% depending upon state)
• Legal/conveyancing fees ($1,000–$2,500)
• Building Inspection fees ($500–$1,000)
Tip: Some fees may be negotiable.

This allows you to build a deposit using super contributions, which are taxed at just 15%. You can contribute up to $15,000/year (total cap: $50,000).

Find more on https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme

New Properties:
• Pros: Access to grants, modern design, lower upkeep
• Cons: Often farther from cities, may lack landscaping

Established Properties:
• Pros: Closer to facilities, unique features
• Cons: May require updates, fewer incentives

LMI protects lenders when borrowers have less than a 20% deposit. It doesn’t cover the borrower and can cost thousands.
Cost Factors: Loan size, deposit amount, lender policy, owner/investor status
Example: On a $600,000 loan with 10% deposit, LMI may cost $10,000–$15,000

Ways to Avoid:
- Save 20% deposit, some lenders may consider up to 15% Deposit
- Use a guarantor
- Apply via First Home Guarantee
- for LMI waivers based on your profession
-Ask a broker for LMI-friendly options

- Meet a mortgage broker to assess your borrowing power
- Gather key documents: ID, payslips, statements, deposit proof
- Apply for pre-approval to set your property search budget
- Find a property and make an offer
- Gain formal (unconditional) approval
- Review and sign your loan documents
- Settle the loan and receive ownership
- Continue receiving support from your broker

Brokers provide:
• Access to diverse lenders
• Personalised loan matching
• Help with application paperwork and negotiation
• Often no out-of-pocket cost to you

It’s a timeframe after signing a purchase agreement when you can withdraw from the contract, typically with a small financial penalty (about 0.25% of the price).
Cooling-Off Period by State:

Why It Matters: Gives you time to:

• Do building inspections
• Obtain formal approval
• Seek legal advice
• Cancel if needed