First Home Buyers: 8 Things You Need to Know Before You Buy

Buying your first home is one of the biggest financial decisions you'll ever make. The process can feel overwhelming, and the stakes are high. This guide covers the eight most important things every first home buyer needs to understand before signing anything.

1. Know your borrowing capacity before you start looking

Before you fall in love with a property, find out how much you can actually borrow. Get a pre-approval or pre-qualification from a lender. This tells you your realistic price range and makes you a more credible buyer when you make an offer. It also helps you avoid wasting time viewing properties you can't afford.

Your borrowing capacity depends on your income, expenses, existing debts, credit score, and the deposit you have available. Use our mortgage calculator to estimate repayments at different price points.

2. The deposit is just the beginning

Most people focus on saving the deposit, but buying a home involves significant additional costs that can add 3–6% to the purchase price. Budget for:

• Stamp duty or transfer duty — a government tax on property purchases. The amount varies by location and property price. First home buyer concessions apply in many jurisdictions.
• Legal fees / conveyancing — typically $1,000–$2,500
• Building and pest inspection — $300–$600 and essential before purchase
• Mortgage registration and establishment fees — varies by lender
• Moving costs — $500–$3,000 depending on distance
• Immediate repairs and furnishings — budget conservatively

3. Understand the total cost of ownership

Monthly mortgage repayments are only part of what you'll pay as a homeowner. Budget also for rates and taxes, building insurance, contents insurance, maintenance (a rule of thumb is 1% of property value per year), body corporate fees if applicable, and utilities.

4. A larger deposit saves you significantly more than you might think

A 20% deposit versus a 10% deposit on a $500,000 property isn't just about borrowing $50,000 less. It also eliminates Lenders Mortgage Insurance (LMI) — a premium charged when you borrow more than 80% of the property value. LMI can cost $10,000–$20,000 on a typical loan. A larger deposit also gives you access to better interest rates and a lower monthly repayment.

5. Get independent legal advice

Never sign a contract of sale without having a solicitor or licensed conveyancer review it first. Contracts contain conditions, sunset clauses, inclusions, and exclusions that can have major implications. The cost of legal advice ($1,000–$2,000) is negligible compared to the risks of signing without it.

6. Always get a building and pest inspection

Never skip the building and pest inspection, even if the property looks perfect. Inspections regularly uncover issues invisible to the untrained eye — structural problems, moisture damage, termite activity, faulty wiring. The $400–$600 cost of an inspection is trivial compared to the cost of discovering these problems after settlement.

7. Don't overextend yourself

Just because a lender will lend you a certain amount doesn't mean you should borrow that much. Lenders assess your capacity to repay under current conditions — they don't fully account for interest rate rises, reduced income, or family changes. Borrowing at maximum capacity leaves no financial buffer for life's inevitable surprises.

A general guideline is to keep your mortgage repayment below 30% of your gross income. Use our mortgage calculator to find the repayment level that feels sustainable for your budget.

8. Think long term

Property is a long-term asset. Short-term market movements matter far less than the 10, 20, or 30-year trend. Trying to perfectly time the property market is extremely difficult even for professionals. If you're buying a home to live in for the long term, market timing matters less than buying something you can afford and maintain.