I want to buy a home

Making the decision to buy your first home is exciting, and the journey to getting there should be too.

But before you start doing your housing market research, saving, budgeting, and applying for home loans, it’s important to establish your financial readiness and set clear goals, so you’re well-prepared to make informed decisions right up until you buy your first home.

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How much could I borrow?

Before you start looking for your new house, you need to determine how much you’ll be able to borrow based on your financial situation. This will impact your savings, budgeting, and other home-buying decisions going forward.

Use our home loan borrowing power calculator to get an idea of what your home loan might look like.

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Supporting this step in your journey

What first home buyers need to know

A handy guide for understanding the home buying process.

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Understanding home loans

Learn the basics of home loans & what to consider.

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Dealing with debt

Tips for breaking the debt cycle & building better financial habits.

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Low deposit options for first home buyers

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Preparing to save for your first home

Being able to buy your first home starts with good saving habits and consistent effort. Before you can start saving, you need to determine how much you’ll need for a deposit and create a savings strategy and goal that fits your budget.

Find out more about how to do that by reading our resource below.

Tips to help you save for your first home

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The cost of buying your first home

Understanding how much to save for your first home deposit is crucial. By assessing your financial situation and exploring various deposit requirements, you can work out how much you need to save and plan effectively.

Read the guide below about the key factors that determine your deposit amount, so you can set a realistic savings goal.

How much you do you really need for a house deposit?

FAQs

What is Lenders Mortgage Insurance (LMI)?

Lenders Mortgage Insurance (LMI) is a type of insurance that protects the lender in case the borrower defaults on their home loan. It’s typically required when a borrower has a deposit of less than 20% of the property’s value.

While LMI doesn’t protect the borrower, it enables them to secure a home loan with a lower deposit, making it easier to enter the property market sooner. The cost of LMI is usually added to the loan amount or paid upfront.

What is the Home Guarantee Scheme? Am I eligible?

The Home Guarantee Scheme (HGS) is an Australian Government initiative that supports eligible homebuyers looking to purchase a home sooner, with a low deposit and no Lenders Mortgage Insurance (LMI). Read more about the Home Guarantee Scheme.

You find out if you’re eligible on the Housing Australia website/

What is the Loan to Value ratio (LVR)?

The Loan to Value Ratio (LVR) is a percentage that represents the amount of a loan compared to the value of the property being purchased. It’s calculated by dividing the loan amount by the property’s value and then multiplying by 100.

For example, if you’re borrowing $400,000 to buy a property worth $500,000, the LVR would be 80%.

Lenders use the LVR to assess the risk of a loan. Generally, a higher LVR means higher risk. This might lead to the lender taking out Lenders Mortgage Insurance (LMI) or higher interest rates.

What are the benefits of getting pre-approval for a home loan?

Pre-approval for a home loan has several advantages, including helping you set a realistic budget, increasing your negotiating power with sellers, and potentially speeding up the final approval process once you find a property. It can also help reduce stress by providing clarity on your borrowing capacity.

However, pre-approval is typically valid for a limited time and is not a guarantee of final loan approval, because factors like property valuation and changes in your financial situation can still affect the outcome. Additionally, the process involves a credit check, which may slightly impact your credit score, and knowing your maximum borrowing limit might lead to stretching your budget beyond comfortable levels.

What do I need to do before I apply for a home loan?

Before applying for a home loan, it's essential to prepare thoroughly to ensure a smooth and successful application process. Start by gathering key documents such as proof of identity, income, savings, and liabilities. Understanding your credit score and financial situation will also help you make informed decisions.

For personalised guidance tailored to your specific needs, it's best to speak with a lending specialist. They can provide expert advice, help you understand the application process in detail, and ensure that you meet all requirements. To get started, read our home loan application checklist or speak directly with a lending specialist.