If you’re trying to buy your first home in Australia, you already know it’s difficult. Prices are high, deposits take years to save, and the process is full of hidden costs and confusing jargon.

Here’s a practical overview of what you actually need to know.

How Much Deposit Do You Really Need?

The standard advice is 20% of the purchase price. For a $600,000 property, that’s $120,000. This avoids paying Lenders Mortgage Insurance (LMI).

But 20% isn’t the minimum. You can buy with as little as 5% deposit, though you’ll pay LMI. LMI is a one-off insurance premium that protects the lender (not you) if you default. It can range from $5,000 to $30,000+ depending on the loan size and your deposit percentage.

Some government schemes help reduce the deposit requirement. The First Home Guarantee allows eligible buyers to purchase with a 5% deposit without paying LMI. Availability is limited and there are price caps, but it’s worth checking if you qualify.

Costs Beyond the Purchase Price

The deposit is just the beginning. Additional costs that catch first-time buyers off guard:

Stamp duty. This varies by state and property value. In NSW, a $600,000 property incurs roughly $22,000 in stamp duty. First-time buyer concessions exist in most states, with some offering full exemptions below certain thresholds.

Legal/conveyancing fees. $1,500-$3,000 for a solicitor or conveyancer to handle the legal side of the purchase.

Building and pest inspections. $500-$800. Non-negotiable. Skip this and you risk buying a property with structural issues or termite damage.

Loan application fees. Some lenders charge $200-$600 for processing your loan application.

Moving costs. $500-$2,000 depending on distance and how much stuff you have.

Budget an additional 5-8% of the purchase price for these costs, on top of your deposit.

The Mortgage Landscape

Interest rates in Australia have risen significantly from their pandemic lows. Your borrowing capacity is lower than it was two years ago, which affects how much you can spend.

Get pre-approved before you start looking. Pre-approval gives you a clear budget and shows sellers you’re a serious buyer. It typically lasts three to six months.

Compare rates across multiple lenders. Don’t just go with your existing bank. Online comparison sites give you a starting point, but talking to a mortgage broker (who accesses multiple lenders) can save you time and potentially find better deals.

Fixed vs variable is the perpetual question. Fixed rates give you certainty for a set period. Variable rates can go up or down. Many borrowers split their loan — part fixed, part variable — to get some certainty with some flexibility.

Where to Buy: The Trade-Off

Location is the biggest factor in both price and lifestyle. The trade-offs are real:

Inner city: Expensive, small, but close to work, public transport, and amenities.

Middle ring suburbs: Moderate prices, bigger properties, reasonable commute times. Often the best compromise.

Outer suburbs: More affordable, larger blocks, but longer commutes and potentially fewer amenities.

Regional areas: Much more affordable but requires different lifestyle assumptions. Remote work has made this viable for many people.

There’s no objectively right answer. It depends on your work situation, family needs, and lifestyle preferences. Visit areas at different times of day and week before committing.

The Buying Process

Research first. Attend open homes without bidding for at least a month. Get a feel for the market in your target area. What sells? At what price? How competitive are auctions?

Get your finances sorted. Pre-approval, deposit saved, additional costs budgeted. Know exactly what you can afford before making offers.

Make offers or bid at auction. Auctions are unconditional and binding. Private sales allow conditions (subject to finance, building inspection). Understand the difference.

Settlement. After exchange, settlement typically takes 30-90 days. During this time, the legal and financial paperwork is completed. You get the keys at settlement.

Government Schemes Worth Knowing

First Home Guarantee: Purchase with 5% deposit without LMI (limited places).

First Home Super Saver Scheme: Withdraw voluntary super contributions (up to $50,000) for your deposit, with tax benefits.

State first home buyer grants: Vary by state. Typically $10,000-$15,000 for new homes. Check your state’s current offering.

Stamp duty concessions: Most states offer reduced or waived stamp duty for first home buyers below certain price thresholds.

The Honest Advice

Buying your first home is stressful, expensive, and uncertain. It’s also still one of the best long-term financial decisions for most Australians, given the tax advantages (no capital gains tax on your primary residence) and the forced savings nature of mortgage repayments.

Take your time. Don’t panic-buy because you think prices will keep rising. Don’t stretch beyond what you can comfortably afford. Interest rates can change, incomes can change, circumstances can change.

Buy a home you can live in and afford, even if it’s not your dream home. You can upgrade later. Getting on the property ladder matters more than where on the ladder you start.