Buying your first home? Important things to know
Whether you're exploring the best home loans, comparing home loans and mortgage loans, researching government assistance programmes, or trying to understand stamp duty concessions, this comprehensive guide covers the six essential things every first home buyer needs to know. Working with an experienced mortgage broker or home loan broker can help you navigate the process successfully. For an overview of all your options, read our guide on pathways to home ownership.
Understanding your borrowing capacity and budget
Before you start browsing properties or attending open homes, you need to understand exactly how much you can borrow and what you can realistically afford. This is where your pre-approval process begins. Whether you're working with a mortgage broker, home loan broker, or applying directly with a bank, getting clear on your borrowing capacity is essential.
Getting pre-approved for your home loan
Securing a pre-approval is your first major step as a first home buyer. A pre-approval tells you:
- Your maximum borrowing capacity – how much lenders are willing to lend you
- Your realistic budget – what you can comfortably afford in monthly repayments
- Your negotiating power – sellers take you seriously when you have finance ready
- Your property search parameters – the price range you should focus on
Key insight: Most first time home buyers are surprised to learn their borrowing capacity might be different from what they can comfortably afford. A good mortgage broker will help you understand both numbers and find the right balance for your financial situation. Use our home equity calculator to explore different scenarios.
Creating your first home buyer budget
When buying your first home, you need to budget for more than just the property price. Our budgeting guide for first home buyers covers all the costs you'll encounter:
- Deposit – typically 5-20% of the property price (lower with government schemes)
- Stamp duty – can be substantial, but NSW first home buyers may qualify for exemptions
- Legal and conveyancing fees – usually $1,500–$3,000
- Building and pest inspections – around $400–$800 combined
- Lenders Mortgage Insurance (LMI) – if your deposit is under 20%
- Moving costs and immediate repairs – often overlooked but important
Related reading: Learn more about choosing the right finance to understand your options before applying for pre-approval.
Exploring deposit options and government schemes
One of the biggest challenges for first time home buyers is saving enough for a deposit. The good news? You have more options than you might think. Check our comprehensive guide on first home buyer deposit options to explore all strategies.
How much deposit do you actually need?
While traditional wisdom says you need a 20% deposit, first home buyer loan programmes have changed the landscape dramatically:
- 5% deposit – available through the Home Guarantee Scheme
- 2% deposit – possible with the Shared Equity Scheme for eligible buyers
- 10–15% deposit – common for buyers using family guarantors or genuine savings
- 20%+ deposit – ideal to avoid LMI and access better interest rates
The Home Guarantee Scheme (5% deposit scheme)
The Home Guarantee Scheme is a game-changer for first time home buyers. This government programme allows you to:
- Purchase with just a 5% deposit
- Avoid paying Lenders Mortgage Insurance (potentially saving $10,000–$50,000)
- Access competitive interest rates despite the lower deposit
- Buy established homes or new builds (within price caps)
To understand if you're eligible and how to apply, read our detailed guides on the genuine savings requirements and the benefits and risks of the Home Guarantee Scheme.
Other deposit building strategies
Beyond government schemes, first home buyers can explore:
- First Home Super Saver Scheme – use your superannuation to build your deposit faster with tax benefits
- Family guarantee – parents can use their property equity to help you buy
- Gift or inheritance – money from family (with proper documentation)
- Savings plans – dedicated high-interest accounts for genuine savings
Ready to get pre-approved?
Our expert mortgage advisers specialise in helping first home buyers in Parramatta, North Sydney, Hills District, and Inner West navigate the home loan process.
Maximising NSW first home buyer benefits
As a first home buyer in NSW, you have access to some of Australia's most generous government support programmes. Understanding and maximising these benefits can save you tens of thousands of dollars.
NSW stamp duty savings and exemptions
Stamp duty is typically one of the largest upfront costs when buying property. NSW offers substantial relief for first time home buyers. Learn more in our detailed NSW stamp duty guide for first home buyers:
- Full exemption on stamp duty for properties up to $800,000
- Concessional rates for properties between $800,000 and $1,000,000
- Potential savings of $30,529+ on an $800,000 property
First Home Owner Grant (FHOG)
The NSW First Home Owner Grant provides $10,000 to eligible buyers purchasing or building a new home. For full details on eligibility and how to apply, read our NSW First Home Owner Grant guide. Key points:
- Available for new homes only (not established properties)
- Property value must be under $600,000 (or $750,000 for land and construction)
- Must be Australian citizen or permanent resident
- Cannot have previously owned property in Australia
Combining multiple benefits
Strategic approach: Smart first home buyers can combine multiple programmes. For example: use the Home Guarantee Scheme (5% deposit) + stamp duty exemption + FHOG on a new property. This could mean purchasing a $750,000 new home with just $37,500 deposit whilst saving over $35,000 in stamp duty and receiving $10,000 grant.
Understanding Loan to Value Ratio (LVR) and Lenders Mortgage Insurance
Two critical concepts every first time home buyer must understand are LVR and LMI – they directly impact your borrowing power and costs.
What is Loan to Value Ratio (LVR)?
Your Loan to Value Ratio (LVR) is the percentage of the property value you're borrowing:
- 80% LVR – 20% deposit (generally considered low risk by lenders)
- 90% LVR – 10% deposit (requires LMI, common for first home buyers)
- 95% LVR – 5% deposit (available through Home Guarantee Scheme)
Your LVR affects:
- Whether you need to pay LMI
- Your interest rate (lower LVR often equals better rates)
- Loan approval likelihood
- How much you can borrow
Lenders Mortgage Insurance (LMI) explained
Lenders Mortgage Insurance protects the lender (not you) if you default on your loan. It's required when borrowing more than 80% of the property value. For first home buyers, LMI can cost anywhere from $10,000 to $50,000+ depending on your loan size and deposit.
Ways to avoid or reduce LMI:
- Save a 20% deposit
- Use the Home Guarantee Scheme (government guarantees instead of LMI)
- Have a family member provide a guarantee using their property equity
- Some lenders offer LMI waivers for certain professions (medical, legal, accounting)
Related reading: Use our property deposit calculator to understand how different LVRs and deposits affect your borrowing capacity.
Choosing the right property type and location
When purchasing your first home, choosing the right property type and location is just as important as securing the right finance. Learn more in our guide on how to buy the right property as a first home buyer.
Property types to consider
Each property type has different benefits, costs, and considerations for first time home buyers:
- Full land ownership and control
- Privacy and space
- Higher entry cost but stronger capital growth potential
- Complete renovation freedom
Strata properties (apartments and townhouses)
- Lower entry cost – ideal for first home buyers in expensive markets
- Shared amenities (pool, gym, security)
- Strata fees to consider (typically $1,000–$5,000+ annually)
- Restrictions on renovations
Vacant land or land for construction
- Build your dream home from scratch
- Access to additional grants for new builds
- More complex finance process (construction loans)
- Longer timeline to move in
Location considerations
Location, condition, and vibes all matter when choosing your first home. Consider:
- Proximity to work and transport – daily commute impacts quality of life
- School zones – important for families or future resale
- Local amenities – shopping, healthcare, recreation
- Future development – infrastructure projects that may increase value
- Price growth trends – some suburbs outperform others
Serving Sydney's first home buyers
We specialise in helping first home buyers in Parramatta, North Sydney, Hills District (Baulkham Hills, Castle Hill, Kellyville), and Inner West (Marrickville, Newtown, Leichhardt).
Contact us: 0426 002 202 | Hello@buyvest.com.au
Understanding the purchase process
The final key to success as a first home buyer is understanding exactly how the purchase process works. For a detailed walkthrough, read our guide on property purchase, bank valuation and property types. There are three main ways to buy property in Australia:
Private treaty sales
Private treaty sales are the most common and first-home-buyer-friendly option:
- Negotiate directly with the seller
- Include conditions (finance approval, building inspection)
- Time to arrange finance and complete due diligence
- More flexible and less pressure than auctions
Buying at auction
Buying at auction is competitive but can work for prepared first time home buyers:
- Need unconditional finance approval beforehand
- Complete all inspections before bidding
- Contract is unconditional when hammer falls
- Requires confidence and preparation
Off-the-plan purchases
Buying off the plan offers unique opportunities for first home buyers:
- Lock in today's price for future property
- Qualify for First Home Owner Grant (new property)
- Extended settlement (time to save larger deposit)
- Potential risks: property value changes, construction delays
The path to settlement
Once your offer is accepted, you'll move through to settlement. This includes:
- Exchange of contracts – legal commitment made, deposit paid
- Final loan approval – bank completes their checks
- Property inspection – final check before settlement
- Settlement day – balance paid, keys collected
Timeline tip: The typical timeline from offer acceptance to settlement is 30–90 days for established properties, or 12–24 months for off-the-plan purchases. Your mortgage broker will co-ordinate with your lender to ensure everything stays on track.
Related reading: Learn more about understanding bank valuations and how they impact your property purchase.
Your complete journey: from pre-approval to homeownership
Understanding these six key areas is essential, but buying your first home is about bringing them all together into a cohesive strategy. Read our complete first home buyers journey guide to see how all these pieces fit together, from pre-approval to moving day.
Why work with a specialist first home buyer broker?
Navigating the complexities of home loans, comparing mortgage loans, government schemes, and property selection can be overwhelming. A specialist mortgage broker or home loan broker helps you find the best home loans available. Here's why choosing the best mortgage broker matters:
- Access best home loans – our mortgage brokers work with 35+ lenders to find your best deal
- Compare home loans easily – we handle the comparison so you don't have to
- Navigate government schemes – ensure you're maximising all available benefits
- Understand true borrowing capacity – not just maximum, but comfortable repayments
- Co-ordinate timing – align pre-approval, property search, and settlement
- Ongoing support – from first consultation through to settlement and beyond
Start your first home journey today
Our experienced team specialises in helping first time home buyers across Parramatta, North Sydney, Hills District, and Inner West achieve their homeownership goals.
We'll help you understand your borrowing capacity, access government schemes, and find the right home loan for your situation.
Book free consultation or call 0426 002 202
📧 Email: Hello@buyvest.com.au
Comparing home loans and finding the best mortgage broker
When you're ready to compare home loans and mortgage loans in Australia, working with a qualified mortgage broker gives you a significant advantage. Rather than approaching banks individually, a home loan broker can present you with options from multiple lenders, helping you find the best home loans for your situation. Many Australians benefit from using a mortgage broker in Sydney or their local area to simplify the process of comparing mortgage loans and securing competitive rates.
Whether you're looking for the best mortgage loans, considering a home loan refinance, or exploring mortgage options for the first time, professional guidance from a home loan broker can save you thousands of dollars and hours of research.
Next steps: your first home buyer resources
Ready to dive deeper? Whether you're looking for the best home loans in Australia or need a mortgage broker in Sydney, explore our comprehensive resource library:
- Buying your first home: important things to know – essential tips and strategies
- Pathways to home ownership – complete overview of your options
- Property deposit calculator – see the maximum property price you can afford based on your deposit
- Home equity calculator – estimate the amount of equity you can access from a property based on different loan-to-value ratios (LVRs)
- Mortgage repayment calculator – work out how much your home loan repayments could be and plan your budget with confidence
Whether you're just starting to research or ready to apply for pre-approval, Buyvest is here to guide you through every step of buying your first home in NSW.
Contact our team today:
- 📱 Phone: 0426 002 202
- 📧 Email: Hello@buyvest.com.au
- 📅 Book: Schedule your free consultation
Buyvest specialises in mortgage broking for first home buyers across Parramatta, North Sydney (Chatswood, Mosman, North Sydney), Hills District (Baulkham Hills, Castle Hill, Kellyville, Rouse Hill), and Inner West (Marrickville, Newtown, Leichhardt, Dulwich Hill). We help first time home buyers navigate home loans, government schemes, and the property purchase process with expert, personalised advice.
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Important stuff:
Please note that the views and opinions expressed in this post are general information only, and this is not financial advice.
Any advice and information is provided by Buyvest Pty Ltd ABN 91 684 841 496, Australia Credit Licence No. 567392 and is general in nature, for educational purposes only and is not intended to constitute specialist or personal advice. This website has been prepared without considering your objectives, financial situation or needs. Therefore, consider the appropriateness of the advice for your situation and needs before taking any action. It should not be relied upon to enter into any legal or financial commitments. Specific investment advice should be obtained from a suitably qualified professional before adopting any investment strategy. If any financial product has been mentioned, you should obtain and read a copy of the relevant Product Disclosure Statement and consider the information contained within that Statement concerning your circumstances before deciding whether to acquire the product. You can obtain a copy of the PDS by emailing hello@buyvest.com.au. If you want to change your financial circumstances, such as applying for a loan, all loan applications are subject to credit approval.
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