First home buyer checklist
Part 1: Get ready to buy your first home.
Buying your first home is a big milestone
And while it can feel overwhelming at times, a little preparation goes a long way.
We have prepared a step-by-step checklist to help you on your journey to owning your first home.
First home buyer checklist
- Step 1: Work out how much you can borrow
- Step 2: Save for a deposit (and extras)
- Step 3: Research where & what you want to buy
- Step 4: Time to get pre-approval
Step 1: Work out how much you can borrow
This is where the home buying journey starts. Your borrowing capacity (as the banks like to call it) shapes what you can afford, where you can buy and how much you need to save.
How do I work out borrowing capacity?
Your borrowing capacity is based on your income, expenses, savings and debts.
Use a borrowing capacity calculator to give you an idea of how much you can borrow.
Step 2: Save for a deposit (and extras)
A deposit is normally 20% of the total home value. So, for a $700,000 home, a 20% deposit is $140,000. It's a big number, we know!
If you have less than a 20% deposit
We’re proud to be one of the participating lenders of the Australian Government 5% Deposit Scheme. This Scheme helps first home buyers who have saved a minimum 5% deposit with a Government guarantee. No income caps, no waitlists and no LMI means lower upfront costs and could own your first home sooner.
If you don't qualify you can still buy with a smaller deposit - but you may need to pay Lender's Mortgage Insurance (LMI), which can range from 1% to 6.5% of your loan amount.
Additional upfront costs
While you're saving for a deposit, there are some additional upfront costs to consider saving for:
Cost | What is it? | Estimate |
|---|---|---|
Stamp duty | The tax that you pay to the government when buying a house. | Work out your stamp duty using our Stamp Duty Calculator. |
Conveyancer fees | A conveyancer is a lawyer who specialises in the legal aspects of transferring the ownership of a property from one person to another. | Approximately $1,000 to $2,500+. |
Transfer fees | A state government fee for transferring the property title from the seller to the buyer. This is determined by the State Revenue Office and varies per state. | Varies from state to state. |
Lenders Mortgage Insurance | Insurance that protects the bank if you can't repay your loan. It is only required if you have a less than 20% deposit. | Between 1% to 6.5% of the total loan amount. |
Inspection fees | Before making an offer on a house, you may choose to do a building and pest inspection. This assessment informs you if the building is free from structural issues and has no major pest problems. | From $500 to $1,500+ per property |
Other costs | Loan application fees, home and contents insurance, body corporate fees, moving costs, utilities set up, and outstanding rates. | Varies based on lender, property, location, cost etc. |
How do I save a deposit plus upfront costs?
Everyone’s savings journey is different so follow a savings plan that works for you. Look at your budget and work out how much you can put aside each pay cycle that can build towards your goal.
Step 3: Research where & what you want to buy
While you’re saving, start exploring.
Research the area
Location, location, location! Buying a home is a long-term commitment. Look into suburbs that suit your lifestyle, commute and future plans. You can get suburb reports for the area you want to buy in, or explore the area to get a better idea of what living there would be like.
Attend inspections
Attend inspections and auctions of properties in the area to see how much properties go for and how that compares to their advertised price.
Step 4: Time to get pre-approval
Congratulations on hitting your goal!
The next step is to speak to a lender or broker about getting pre-approved. Pre-approval or conditional approval is the amount that a financial provider has agreed to lend to you based on a preliminary assessment. It gives you a solid idea of what you can borrow, and shows sellers you’re serious.
To get pre-approved, you’ll need to provide information such as:
ID
Proof of income (like payslips)
Details of savings, debts and expenses
Pre-approval usually lasts 90 days so it’s best to apply when you’re ready to start house hunting.
Ready to move ahead?
Continue to Part 2: Start your search, make the purchase and move in.
* The information in this webpage is general information only. The information is intended for general guidance only and does not constitute financial or legal advice. You should consult your own professional advisors before making any decisions. While we aim to provide accurate and up-to-date information, we do not guarantee the completeness or suitability of this content for your specific circumstances. Whilst care has been taken in preparing the content, no liability is accepted for any errors or omissions in this communication, and/or losses or liabilities arising from any reliance on this communication.