With property prices easing in some markets and recent federal budget housing tax reforms appearing to reduce investor competition, conditions may be becoming more favourable for first-home buyers. In this type of environment, there could be more choice, less pressure and more room to negotiate than we’ve seen in recent years.
Buying your first home can feel like a big leap, especially when prices, rates and lending rules are constantly changing. But the start of a new financial year provides a great opportunity to reset, get organised and understand what support may be available to help you take the next step.
Here are some tips if you’re looking to buy your first home this new financial year.
1) Review your finances
Before you start browsing listings or attending open homes, the most important thing you can do is to get your finances in shape.
Lenders don’t just look at your income. They’ll analyse your spending habits too, examining bank statements to build a picture of how you manage money day-to-day. That means your finances need to tell a good story.
Go through your statements and ask yourself what subscriptions, memberships, or recurring expenses you could cut or reduce. Even modest changes that are sustained over a few months can meaningfully strengthen your application and show lenders you’re financially disciplined.
2) Create a budget and supercharge savings
If you don’t already have one, a budget can be a useful tool for understanding your finances. Consider mapping out your after-tax income alongside your expenses, which might fall into essentials (like rent, groceries, utilities, and insurance) and non-essentials (such as eating out, entertainment, and hobbies).
From there, it can be interesting to see how much could potentially be saved each month. A well-known framework is the 50/30/20 rule — 50% toward essentials, 30% toward lifestyle, and 20% toward savings. Keeping separate bank accounts for each “bucket” is something many people find works well for them.
3) Do a credit check
It’s worth taking a look at your credit report before you apply for a home loan. Lenders typically review your credit history as part of their assessment process.
Under the Privacy Act 1988, you’re entitled to a free copy of your credit report every three months from each of Australia’s three credit reporting bureaus: Equifax, Experian, and illion.
Your credit report generally includes information such as:
- Your borrowing history over the past five years
- Any credit applications you’ve made
- Your repayment history
Each bureau also assigns a credit score, calculated on a different scale.
Because each bureau uses its own scoring system, your score may vary between them, and different lenders may use different bureaus.
If you spot any errors or information that doesn’t look right, contact the relevant credit reporting bureau directly to have it investigated and corrected.
4) Understand the government support
It’s important to familiarise yourself with government support that is available for first home buyers at a federal and state level. These schemes vary depending on where you’re buying and your personal circumstances.
Under the Australian Government 5% Deposit Scheme, first-home buyers can purchase a home with a minimum 5% deposit and backing from the Australian Government. There are no income caps, no limits on places, no waitlists, and you won’t be up for Lenders’ Mortgage Insurance (LMI).
The Australian Government Help to Buy Scheme is a shared equity initiative, whereby the government contributes up to 40% for new builds and 30% for existing homes. Buyers can purchase with a deposit as low as 2% without paying LMI, and there are 10,000 places each year.
There’s also the First Home Super Saver Scheme, which allows you to make voluntary contributions (up to $50,000) into your superannuation to save for a deposit, while taking advantage of concessional tax rates.
Depending on your situation and location, you may be eligible for other support such as the First Home Owner Grant or stamp duty exemptions/concessions.
5) Get your finance sorted early
Before you start house hunting, it’s important to meet with a mortgage broker to understand your borrowing power. This will save you countless hours looking at properties that could be outside your budget.
After running through your financial situation, we’ll explain your borrowing capacity, and any upfront and ongoing costs to consider, such as stamp duty, legal fees and building and pest inspections.
We’ll help you apply to get your finances pre-approved with your preferred lender, so that you’re all ready to go when you find the right home.
Buying your first home is exciting, and there are a lot of good reasons to jump in now. Let’s make your home purchasing dream a reality this financial year.
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