Buying your first home has two halves: finding the property, and being ready to borrow for it. Most of the stress comes from leaving the second half too late. Here's what to work on, roughly in the order it matters.
1. Know your borrowing capacity early
Before you fall in love with a suburb, find out what a lender will actually lend you. Capacity is driven by your income, your existing debts (including credit card limits and HECS/HELP), your living expenses and the lender's assessment rate. Two lenders can differ by a surprising amount on the same application, which is where a broker helps.
2. Build the deposit — and the "genuine savings" part
As a rule of thumb you'll want at least 5% of the purchase price, plus funds for costs (stamp duty where it applies, conveyancing, inspections, loan fees and moving). Many lenders also want to see part of the deposit as genuine savings: money you've accumulated and held for at least three months, rather than a recent gift or bonus.
- A 20% deposit avoids Lenders Mortgage Insurance (see below) and opens up more lenders.
- Smaller deposits are common and workable — you just need to plan for LMI or a guarantor.
- Set up a dedicated savings account so your deposit history is easy to show.
3. Understand Lenders Mortgage Insurance (LMI)
If you borrow more than 80% of the property value, lenders usually require LMI. It protects the lender, not you, and the premium can run to several thousand dollars — often added to the loan. It isn't necessarily a bad deal: paying LMI to buy two years earlier can beat waiting to save a full 20% while prices move. Run the numbers both ways.
4. Check which government schemes you can use
Depending on your state and your situation, there may be first home buyer grants, stamp duty concessions, and Commonwealth schemes that let eligible buyers purchase with a smaller deposit without paying LMI. Eligibility rules, price caps and place limits change, so confirm the current details for your state and check whether the property type qualifies before you rely on them.
5. Tidy up your finances for the next three months
- Reduce or close unused credit cards and buy-now-pay-later accounts — the limit counts against you even if the balance is zero.
- Keep repayments on everything on time; recent missed payments are a red flag.
- Avoid big new purchases on finance right before you apply.
- Keep your spending steady and explainable — lenders review recent statements.
6. Get a proper pre-approval
A formal pre-approval means a lender has assessed your situation and documents and is prepared to lend up to a set amount, subject to a satisfactory property and no material change. It's not a guarantee, and it typically lasts around 90 days, but it lets you bid or make offers with confidence. Because pre-approval involves a credit enquiry, it's worth getting it through a broker who can pick the right lender the first time.
7. Budget for the ongoing costs, not just the loan
Council rates, water, insurance, body corporate fees for apartments, and maintenance all land after you move in. Build a buffer — ideally a few months of repayments — so a rate rise or a quiet month doesn't become a crisis.
Where a broker fits
We map your borrowing capacity across lenders, tell you honestly what deposit and timeline are realistic, flag the schemes you qualify for, and handle the pre-approval and application. It costs you nothing for most home loans, and it usually saves weeks.