Buying your first home can feel overwhelming because advice often clashes, and falling for outdated information can cost you tens of thousands of dollars. As a trusted mortgage broker in Brisbane, we help clients cut through the noise every day. In this guide, we’re busting the biggest first-home buyer myths and mistakes—clearing up the confusion around massive deposits, perfect credit scores, hidden fees, and maxing out borrowing limits.
Read on to navigate the property market with confidence and secure your dream home without the financial hangover.
Myth #1: It's Cheaper To Rent Than Own
This stubborn myth keeps renters stuck on the lease merry-go-round for years. When you see the constant news about fluctuating property prices and interest rates, it’s easy to assume that renting is the safer, cheaper option.
But the reality is, the cost of renting is skyrocketing too. In fact, rents rose by a record 24% for units and 10% for houses between 2023 and 2024.
You won’t truly know if renting is cheaper unless you sit down and look at the numbers with a mortgage broker.
When we review your situation, we can help you determine:
- Your true borrowing capacity: Exactly how much you can safely afford to borrow.
- Estimated loan repayments: How a weekly or monthly mortgage repayment actually compares to your current rent.
- Deposit requirements: How much you need to save to get started (which might be less than you think).
Chances are, you might find that your potential loan repayments are very similar to—or even lower than—the rent you are paying right now. At the end of the day, wouldn’t you rather pay off your own home instead of your landlord’s?
Read more: Renting vs buying calculator.
Myth #2: It's A Bad Time To Buy
There is an old real estate saying that the best time to buy property was yesterday. It is incredibly easy to look back through rose-coloured glasses at the low interest rates and cheaper houses of yesteryear and feel like you’ve missed the boat.
However, because nobody has a crystal ball to predict exactly what the market will do tomorrow, waiting for the “perfect” time to buy can actually be a costly strategy.
If you hold off on buying to wait for the market to drop, you risk:
- Missing out on capital growth: You lose valuable years of potential property price growth that could be building your personal wealth.
- Paying your landlord’s mortgage: You continue to sink your hard-earned cash into rent instead of building equity in your own home.
- Prices outpacing your savings: Property values often rise faster than the average first-home buyer can save, pushing that 10% or 20% deposit goalpost further away.
Instead of trying to time the market perfectly, the best approach is to focus on whether it is the right time for you financially. If you have your deposit ready and can comfortably afford the repayments, getting your foot in the door is often the smartest move.
Read more: First home buyer guide
Myth #3: You Should Put In A Lowball Offer
When you are buying a house, you definitely don’t want to be overpaying. After all, you have spent years sacrificing to save your deposit. But in a hot real estate market, throwing out a lowball offer is often the worst thing you can possibly do.
The harsh reality is that if you offer under the suggested price on a property in high demand, your offer will likely get completely ignored. Keep in mind that the real estate agent isn’t technically obligated to call you back to negotiate. Once you make that initial offer, it could be your first and final chance.
We have seen cases where property prices have increased by up to $10,000 a week in the same suburb. Right now, agents are flush with offers, and if you are lowballing, they are just going to move to the next buyer to secure an easy deal.
To stand out, you need to go in completely prepared. This means bringing a strong price, having your formal pre-approval ready, and offering the tightest contract terms possible.
How to make your offer more attractive (beyond the price):
- Shorten your clauses: Limit the number of days for your finance clause and your building and pest inspection.
- Offer a flexible settlement: A quick settlement time frame (or matching the seller’s exact preferred date) is highly appealing.
- Consider a cash offer: If you are auction-ready, you might consider waiving your finance clause. Note: Always check with your mortgage broker to ensure you are safely in a position to do this.
Sellers and agents are always looking for the least hassle and the quickest route to a sale. When you are getting ready to put your name on a contract, gathering intel is critical.
Ask the real estate agent these 4 questions before you make an offer:
- How will the offers be presented? Will your offer be shown to the seller simultaneously with others, or one after another?
- Will I be informed about other offers? Some agents will tell you if competing bids are on the table, while others will keep the process completely confidential.
- What is the seller’s time frame? Are they desperate for a quick sale, or do they need extra time to find their next home? Tailoring your offer to their needs gives you a massive advantage.
- Is there a chance to improve my offer? This is a huge mistake buyers make—assuming they will get a second chance to negotiate. If the agent says they want your “best and final offer,” you must rethink your strategy and put your best foot forward immediately.
Myth #4: You Can't Get A Home Loan If You Have A HELP Debt
You can absolutely still buy a property if you have a Higher Education Contribution Scheme (HECS) or a Higher Education Loan Program (HELP) debt. It might sound too good to be true, but it is a fact!
When assessing your application, banks do not look at your total overall student debt amount and instantly decline you. Instead, they look at your HELP loan purely from the angle of how much you are required to repay each year out of your salary.
How your HELP debt impacts your borrowing power:
- The Income Assessment: Let’s say you earn $55,000 a year. The bank will factor in the mandatory repayment rate for that income bracket (for example, 2%), which equals $1,100 per year in repayments.
- The Final Impact: This $1,100 annual commitment will slightly lower your maximum borrowing capacity, but it definitely will not rule you out of getting a home loan altogether.
You can see more examples of repayments for different income brackets in the chart below.
If you only have a very small amount of your HELP debt left, you might consider just paying it off. Once it is cleared, the bank removes it as a liability from your ongoing assessment, and your borrowing capacity will instantly increase. You just need to provide proof to the bank that the debt has been finalized.
The main reason people mistakenly think they cannot buy a home with student debt is that they apply directly with the wrong lender. As an experienced mortgage broker in Brisbane, we know exactly which lenders are the most generous when assessing first-home buyers with HECS debts. We can match you with the right bank for your specific situation
Myth #5: Your Credit Score Has To Be Perfect
A lot of first-home buyers log into a free credit score app, see a number that isn’t in the “Excellent” tier, and instantly panic. They assume that without a flawless credit score, their dream of buying a home is completely off the table.
Let’s clear the air: your credit score does not need to be perfect to get a home loan approved.
When you submit your application, Australian banks and lenders don’t just stare at a single three-digit number. Thanks to Comprehensive Credit Reporting (CCR), they look at your entire financial file to understand the whole story behind your finances.
In the eyes of a lender, your financial behaviour matters much more than your raw score.
What lenders watch out for (Red Flags):
- Recently missed Afterpay or Buy Now Pay Later instalments.
- Unpaid utility bills that have gone to collections.
- Applying for multiple credit cards or personal loans in a single month.
What lenders love to see (Green Flags):
- A consistent track record of paying rent on time.
- Regular, uninterrupted savings deposits.
- Clearing your existing bills and minimum repayments on time.
Pro Tip: Put yourself on a “credit diet” for at least 3 to 6 months before applying. Stop applying for new loans, close down any Buy Now Pay Later accounts you don’t absolutely need, and set up direct debits so you never miss a bill.
Read more: Bad credit home loans
Myth #6: You Should Take A Mortgage Out With Your Existing Bank
Plenty of first-home buyers instinctively default to their current bank when it’s time to get a mortgage. It feels easier, right? They already have your details, you use their app every day, and there’s a sense of loyalty.
However, just because they’ve held your savings account since you were ten doesn’t mean they’ll offer you the best deal. In fact, loyalty can often cost you.
Banks only offer their own products, which means you are limited to a very small slice of the market. As a mortgage broker in Brisbane, we have access to over 30 different lenders. When you shop around, you gain access to a much wider variety of rates, features, and—most importantly—lending policies.
Why staying with your current bank could backfire:
- The “Too Much Info” Trap: Your bank sees every single transaction. If they spot spending habits they don’t like (even if you’re financially stable), they can use that data to decline your application.
- Rigid Lending Criteria: If your situation is slightly unique—like being self-employed or having a small deposit—your bank might say “no” simply because you don’t fit their specific box.
- Missing Out on Better Rates: There are often “new customer” specials or smaller lenders offering significantly lower rates that your current bank simply won’t tell you about.
Under the Best Interests Duty, mortgage brokers are legally required to act in your best interest, not the bank’s. This means we are motivated to find the absolute best loan for your specific needs, rather than just selling you what’s on the shelf.
Myth #7: You Need Help From Family To Buy
If you read the news lately, it’s easy to feel like the only way to get onto the property ladder is by tapping into the “Bank of Mum and Dad.” It can be super discouraging to think you are locked out of the market without a massive cash gift from your parents.
Here is the truth: you absolutely do not need family cash to buy your first home. We help first-home buyers secure properties entirely on their own every single day.
However, if your family does want to help out—but they don’t have $50,000 in spare cash sitting around—there is another great option: a guarantor loan. Instead of handing over cash, a guarantor loan allows a family member (usually your parents) to use the equity in their own property as security for a portion of your mortgage.
The benefits of a guarantor loan:
- You can potentially borrow up to 100% of the purchase price.
- You can completely avoid paying Lenders Mortgage Insurance (LMI), saving you thousands of dollars.
- You can get into the market much faster.
That said, a guarantor loan isn’t just a casual favour. Your guarantor is taking on a level of risk, and if you default on your loan, the bank can look to them to cover that guaranteed portion. Furthermore, lenders have strict policies on who can be a guarantor and how much equity they need.
Think of family help as a fantastic pathway to explore, but definitely not a strict requirement to buying a house.
Read more: The complete guide to guarantor home loans.
Myth #8: You Should Avoid Fixed Rates
Many first-home buyers believe variable rates are always the best choice. From the outside, this seems logical—variable rates offer maximum flexibility, the ability to make unlimited extra repayments, and the option to use an offset account to slash your interest costs.
But in the current market, fixed rates are a powerful tool for budgeting and peace of mind. If you want absolute certainty over your expenses for the next 1 to 3 years, a fixed rate is worth considering. This is particularly helpful if you have a major life event on the horizon—like a wedding or starting a family—and you need to know exactly what your mortgage repayments will be every single month.
The benefits of a fixed interest rate:
- Protection against rate hikes: With the RBA cash rate currently sitting at 4.10% (as of April 2026), a fixed rate protects you if the board decides to increase rates further.
- Budgeting certainty: You can lock in your monthly expenses, making it much easier to manage your household cash flow.
- Stress-free living: You don’t have to check the news every month to see what the Reserve Bank is doing.
The "Split Loan" Secret
One of the biggest things first-home buyers don’t realise is that you don’t have to choose just one. You can get a split loan, where one part of your mortgage is fixed (for stability) and the other part is variable (for flexibility and offset access).
As a mortgage broker in Brisbane, we often recommend this “best of both worlds” approach to give you security while still allowing you to pay off your loan faster with extra repayments.
Bonus Myth: Offset Accounts Are Always Best
Since we’ve mentioned offset accounts, it’s time to bust a secondary myth: that every home loan needs an offset account to be “good.”
Don’t get us wrong—offsets are fantastic. But they aren’t free. Banks often charge annual package fees (sometimes $395 or more) just for the privilege of having one. If you don’t keep a significant amount of cash in that account, you might actually be paying more in fees than you are saving in interest.
The cheaper alternative: The Redraw Facility
If you want to save interest without the high fees, a redraw facility might be the better play.
- How it works: You make extra payments directly into your loan.
- The benefit: It reduces your interest just like an offset account does, but most basic loans offer this feature for free.
- The catch: Unlike an offset (which acts like a normal transaction account), redraw facilities can sometimes have restrictions on how quickly you can get your money back out.
Myth #9: You Shouldn't Put Down Less Than A 20% Deposit
Times have changed, and the old-school rule of thumb that you must have a 20% deposit is officially a thing of the past. While a larger deposit means you borrow less and avoid Lenders Mortgage Insurance (LMI), waiting years to hit that 20% mark can actually be a massive financial mistake.
In 2026, the average household takes roughly 5.9 years to save a 20% deposit for a median-priced home. With Australian property prices forecast to rise by 7.7% this year alone, the “cost of waiting” can far exceed the cost of paying LMI.
The "Cost of Waiting" vs. Paying LMI:
- Scenario: You want to buy a $600,000 property today with a 10% ($60,000) deposit.
- The LMI Cost: Your LMI premium might be around $12,000.
- The Risk of Waiting: If property prices grow by 7.7% while you spend another two years saving, that same house could cost you over $90,000 more by the time you’re ready.
For our clients, entering the market with a 5% to 8% deposit is often the smartest move to outpace rising prices. In fact, our internal statistics show that 81% of our buyers now put down less than a 20% deposit.
How to skip or reduce the 20% hurdle:
- Professional LMI Waivers: If you are a doctor, lawyer, nurse, or engineer, many lenders will waive LMI entirely, allowing you to borrow up to 90% or 95% with zero extra cost.
- Government Support: Schemes like the First Home Guarantee allow eligible buyers to get in with just a 5% deposit while the government effectively “guarantees” the rest.
- Guarantor Loans: If you have zero deposit, a family member can use their home equity to help you secure 100% of the purchase price.
As a mortgage broker in Brisbane, we specialise in finding low-deposit solutions that get you into your home years ahead of schedule.
Mistake #1: Ignoring the "Hidden" Costs of Buying
It is incredibly common for first-home buyers to laser-focus entirely on saving their deposit. While hitting that savings goal is a massive achievement, one of the biggest mistakes you can make is treating the deposit as the ultimate finish line.
If you drain every last cent of your savings to hit that magical 5% or 20% mark, you might find yourself completely caught out by the upfront costs required to actually settle on the property.
Before you even get the keys, there are several un-mortgageable expenses you need to pay out of pocket.
Common hidden costs for first-home buyers include:
- Stamp Duty: This can be a huge expense depending on your state, property price, and whether you qualify for a first-home buyer exemption.
- Conveyancing & Solicitor Fees: You will need professional legal help to transfer the title, which generally sits between $1,000 and $2,000.
- Lenders Mortgage Insurance (LMI): If your deposit is under 20%, you will encounter LMI. While often capitalised onto your loan, it impacts your overall borrowing power.
- Bank & Government Fees: Including loan application fees, mortgage registration, and title transfer fees.
- Moving & Setup Costs: Budgeting for removalists, utility connections, and basic repairs.
To avoid a stressful financial scramble right before settlement, work with your mortgage broker early on to map out your total purchase budget. This ensures you have a comfortable buffer to cover both your deposit and all the extra hidden fees.
Read more: 16 hidden costs of buying a home.
Myth #10: Mortgage Insurance Protects You
It’s one of the most common misunderstandings in the property world: the idea that Lenders Mortgage Insurance (LMI) is there to protect the homeowner.
Unfortunately, the exact opposite is true. Lenders Mortgage Insurance is an insurance policy that protects the bank, not you.
When you purchase a home with a small deposit (typically anything less than 20%), the lender views you as a higher risk. To hedge their bets, they take out a policy with a third-party insurance company. If you were to default on your loan and the sale of the house didn’t cover the remaining debt, the LMI policy pays the bank the difference.
What you need to know about LMI:
- It’s for the bank’s benefit: If you can’t make your repayments, LMI does not pay your mortgage for you. You are still responsible for the debt.
- You pay the premium: Even though the policy protects the lender, they pass the full cost of the premium onto you as the borrower.
- It’s usually “capitalised”: The good news is that you don’t usually have to pay for LMI out of your own pocket upfront. Most lenders will “capitalise” it, which simply means adding the cost to your total loan balance.
- It’s a “ticket to the game”: While it’s an extra cost, LMI is often the only way first-home buyers can enter the market without waiting decades to save a massive deposit.
As an experienced mortgage broker in Brisbane, we help you calculate exactly how much LMI will cost and, more importantly, we look for ways to help you avoid it—such as through professional waivers or government-backed schemes.
Read more: What is Lenders Mortgage Insurance (LMI)?
Myth #11: Your Pre-approval Is Fine For Any Property Type
Many first-home buyers don’t realise that even if you have been pre-approved for a specific dollar amount, the type of property you buy can change everything. A bank’s “yes” is often tied to the security of the asset you are purchasing.
If the property type doesn’t meet the lender’s internal rules, they might reduce the amount they lend you—or refuse to lend on that property at all!
Common property "deal-breakers" for lenders:
- Inner-city postcodes: Some banks restrict lending in “high-density” areas where they already have too much exposure.
- Small apartments: Many lenders won’t touch units under 40sqm or 50sqm (excluding balcony and car space).
- Unique dwellings: Studio apartments, converted warehouses, or rural properties on large acreage can trigger stricter lending rules.
- Company Title properties: These are often much harder to finance than standard Torrens or Strata titles.
It’s also important to remember that pre-approval is conditional. To move to formal, unconditional approval, the bank will require a satisfactory valuation of the property. If the bank’s valuer thinks the home is worth less than what you paid, you may have to bridge the gap with your own cash.
This is a massive risk if you are bidding at auction. In Australia, an auction contract is unconditional. If you win, you are legally committed to the purchase and must pay the deposit, even if your bank later decides they don’t like the property type.
Before you fall in love with a city apartment or a unique townhouse, speak with your mortgage broker in Brisbane. We can check the postcode and property type against your lender’s specific “blacklists” to ensure your pre-approval holds firm.
Read More: How reliable is your pre-approval?
Mistake #2: Assuming Pre-Approval Means You're Ready For Any Loan & Maxing It Out
Getting that pre-approval letter from the bank is an incredibly exciting milestone, but many first-home buyers make the critical mistake of treating their maximum borrowing limit as a target to spend.
Just because the bank says you can borrow $600,000 doesn’t mean you should. Maxing out your borrowing capacity leaves you financially stretched, meaning you could end up “house poor” with zero buffer for emergency repairs, lifestyle changes, or cost-of-living increases.
While Australian banks do stress-test your application by adding an APRA 3% buffer to current interest rates (to ensure you can survive potential rate hikes), that calculation doesn’t factor in your personal lifestyle, travel plans, or future family goals.
The second major trap is assuming your pre-approval is an ironclad guarantee that you will get the money. It is vital to understand the difference between the two types of approval:
- Pre-approval (Conditional Approval): The bank agrees to lend you the money in principle, based on your current financial situation, but it is not a final guarantee.
- Unconditional Approval (Formal Approval): The bank has formally agreed to fund the loan after assessing the specific property you want to buy and conducting a valuation.
Even with a strong pre-approval, your final formal approval can still fall through before settlement.
What can derail your unconditional approval?
- Property Type Restrictions: Banks have strict lending criteria. They might decline the loan if you buy in a high-risk postcode, purchase a tiny studio apartment (under 40sqm), or buy a property with zoning issues.
- Valuation Shortfalls: If the bank’s independent valuer decides the home is worth less than what you offered to pay, the lender won’t cover the difference.
- Changed Finances: Taking out a new car loan, changing jobs, or spending a chunk of your deposit before settlement can cause the bank to instantly revoke your approval.
Pro Tip: Work out what monthly repayment you are actually comfortable living with, rather than just looking at the maximum amount the bank will hand over.
Myth #12: You Are Locked In With The Lender For The Duration Of The Loan
One of the biggest misconceptions first-home buyers have is that a 30-year mortgage means a 30-year marriage to their bank. This couldn’t be further from the truth.
The reality is that your financial situation, the property market, and interest rates will all change over time. If you find that your current lender is no longer providing a competitive deal, you have the power to refinance your mortgage to a different bank.
Refinancing is simply the process of replacing your existing loan with a new one—either with your current lender or a completely new one—to better suit your needs.
Why Australian homeowners choose to refinance:
- Secure a lower interest rate: Even a small reduction in your rate can save you thousands of dollars over the life of the loan.
- Access your “Equity”: If your home has increased in value, you can refinance to access that equity for renovations or even a deposit on an investment property.
- Switch features: You might want to move from a basic loan to one with an offset account or a better redraw facility.
- Consolidate debt: You can sometimes roll other high-interest debts, like car loans or credit cards, into your mortgage to lower your overall monthly repayments.
While there are some costs associated with switching lenders—such as discharge fees or government registration fees—many banks offer refinance cash-back incentives to help cover these costs and lure you away from their competitors.
As your mortgage broker in Brisbane, we recommend reviewing your home loan every 18 to 24 months. We can run a “health check” on your current mortgage to ensure you’re still getting a top-tier deal compared to what’s currently available on the market.
Read more: 9 Reasons to refinance your home loan
Myth #13: Lenders Follow Interest Rates Set By The Reserve Bank of Australia
Many people assume that whenever the Reserve Bank of Australia (RBA) changes the official cash rate, their mortgage interest rate will automatically move by the exact same amount.
The truth is that while the RBA sets the “benchmark” for the cost of money in Australia, individual banks and lenders are private businesses. They get to decide how much—and how quickly—they pass those changes on to you.
The Reserve Bank cash rate is essentially the interest rate that banks pay to borrow money. When the RBA shifts this rate, it influences the broader market, but lenders have a few different ways they can react:
- Full Pass-Through: The lender moves their rates by the exact same percentage as the RBA (e.g., the RBA hikes by 0.25%, and your bank hikes by 0.25%).
- Partial Pass-Through: The lender might only pass on a portion of a rate cut to protect their profit margins, or they might hike rates by more than the RBA suggests.
- Out-of-Cycle Hikes: Lenders can actually change their interest rates at any time, even if the RBA has held the cash rate steady. They often do this due to the rising costs of funding from overseas markets.
Ultimately, lenders decide whether or not to follow the RBA’s lead. This is why having a mortgage broker in Brisbane on your side is so important. We keep a close eye on which lenders are being “fair” with their rate movements and which ones are being aggressive.
By comparing different products, we can help you find a lender that has a track record of passing on savings rather than just hikes.
Myth #14: Your Friends And Family Know Best
It is natural to turn to the people you trust most for advice when you’re making the biggest purchase of your life. While recommendations from friends and family are a great starting point, it’s important to remember that what worked for them might not be the right fit for you.
The Australian mortgage landscape changes rapidly. A broker who helped your sister three years ago might now specialise in commercial lending, or they may simply be too busy to give a first-home buyer the attention they deserve. Your financial goals, budget, and credit profile are unique, and you need a strategy tailored specifically to your situation.
How to choose the right mortgage broker for your journey:
- Check their experience: Look for a broker who specialises in first-home buyers and has dealt with situations similar to yours (e.g., self-employed, low deposit, or HECS debt).
- Read independent reviews: Don’t just take their word for it. Check Google reviews and testimonials to see how they’ve helped other buyers in the current market.
- Assess their personality: You are building a long-term relationship. As a first-home buyer, you need a patient broker who will “hand-hold” you through the process and coach you on negotiations.
- Look for value-adds: A top-tier broker should provide more than just a loan; they should offer property reports, pricing insights, and tips on how to handle real estate agents.
While we love referrals at Hunter Galloway, we always advise you to speak with a few different experts before committing. You want a mortgage broker in Brisbane who suits your individual style and has the tools to guide you from your first inspection all the way to settlement.
Just remember: go with the broker that fits your future, not just your friend’s past.
Mistake #3: Skipping Building and Pest Inspections to Save a Buck
In a highly competitive real estate market, it’s incredibly easy to get swept up in the buying frenzy. When multiple people are fighting for the same property, real estate agents might hint that the seller is only looking for hassle-free, unconditional offers. This can tempt first-home buyers into waiving their building and pest clauses just to make their offer look more attractive and get a foot in the door.
While skipping these inspections might save you around $400 to $600 upfront, it is the ultimate false economy. You are effectively rolling the dice on the biggest financial commitment of your life. That small upfront saving could easily result in buying a house with $50,000 worth of hidden structural issues or severe termite damage.
A professional inspector will look past the fresh coat of paint and the beautifully staged furniture to uncover what is really going on behind the walls and under the floorboards.
What a standard building and pest inspection can uncover:
- Termite and timber pest activity: Active infestations or historical damage that compromises the structural integrity of the home.
- Structural cracking or subsidence: Major issues with the concrete slab, stumps, or load-bearing walls.
- Water damage and poor drainage: Hidden roof leaks, rising damp, or inadequate property drainage that could lead to mold.
- Illegal or shoddy renovations: Unapproved extensions or DIY fixes that don’t meet Australian building codes.
Consider a building and pest inspection as an essential investment in your peace of mind, not an optional extra. If an inspector does find a major issue, you then have the power to either negotiate the purchase price down to cover the repairs or use the clause to safely walk away from a terrible investment.
Bonus: Government Schemes You Can Qualify For As A First Home Buyer
Your home is likely the most expensive purchase you’ll make in your lifetime. However, that doesn’t mean it is impossible to get your foot in the door. In fact, there have never been more government schemes and grants in place to help Australians purchase their first home than there are right now.
As a mortgage broker in Brisbane, we keep a close eye on these programs because they can literally shave years off your savings timeline.
The most popular schemes available to first homeowners include:
- The First Home Guarantee (FHBG): This allows eligible buyers to purchase a home with as little as a 5% deposit without paying Lenders Mortgage Insurance (LMI). The government effectively “guarantees” the other 15%. Note that not all lenders offer this, and there are specific property price caps.
- The First Home Super Saver Scheme (FHSSS): This clever scheme allows you to make voluntary contributions to your superannuation, which you can later withdraw to use as a deposit. Because super is taxed at a lower rate, you can often save your deposit faster this way.
- The First Home Owners Grant (FHOG): This is a one-off cash payment from the government towards the purchase of a brand-new or substantially renovated home. The amount of the grant and the eligibility rules vary significantly from state to state.
- Stamp Duty Concessions & Exemptions: Stamp duty is a major upfront tax on property transfers. Most states offer massive discounts or full exemptions for first-home buyers up to a certain price threshold (for example, in NSW, homes up to $800,000 may qualify for a full exemption).
- Shared Equity Schemes: Newer programs, like the “Help to Buy” scheme, involve the government contributing to the purchase price in exchange for an equity share in the home. This can help you get started with as little as a 2% deposit.
Navigating these rules can be a bit of a maze, especially since they change every financial year. We can help you check your eligibility for each scheme and ensure your lender is one of the approved participants.
Read more: Grants to buy your first home: The ultimate guide.
Bonus: Tips For Buying A Home
Finding the right property is just as important as finding the right loan. To help you navigate the process like a pro, we’ve put together our top “insider” tips to ensure you don’t get played by the market.
1. The 100-10-1 Rule
Many first-home buyers look at two or three houses and buy the one they fall in love with. The problem? You usually end up overpaying. Aim to look at 100 properties online or in person. This gives you the perspective needed to make offers on 10, with the goal of successfully negotiating on one.
2. Tighten Your Search Criteria
Success comes from reducing variables. Don’t try to search the whole city; stick to 1 or 2 core suburbs. Decide early if you want a detached house, a townhouse, or a unit. Being a local expert in a specific area allows you to spot a “good deal” the second it hits the market.
3. Fact-Check the Real Estate Agent
Agents are professional negotiators. If an agent tells you there is “another party about to make an offer,” take it with a grain of salt. It might be true, but it could also be a tactic to increase your sense of urgency. Always verify information and never let an agent rush your decision-making process.
4. Keep Emotions in Check
Buying a home is an emotional rollercoaster, but emotions lead to overspending. Take a step back and gain perspective by talking to someone not involved in the deal—like your mortgage broker in Brisbane. They can provide a grounded, numbers-based view to keep you on track.
5. Talk to the Neighbours
You can change the kitchen, but you can’t change the neighbours. Before you sign, walk around the street and chat with the people living nearby. It’s the best way to find out if there are “neighbours from hell” or local issues like noisy street parties that the agent won’t mention.
6. Use the "Buy and Sell" Online Trick
When inquiring about a property on Domain or Real estate, there is usually a drop-down box asking about your intent. Select “I’m looking to buy and sell.” The agent will likely call you back immediately because they think they’re getting a new listing (your current home) out of the deal. It’s a great way to get to the front of the queue.
7. Put Your Mortgage on "Training Wheels"
Just because a bank says you can borrow $700,000 doesn’t mean you should. Practice your future monthly repayments now while you are still saving. If the mortgage is $1,000 more than your current rent, put that $1,000 into savings every month. It proves to you (and the bank) that you can handle the commitment without breaking a sweat.
8. Negotiate More Than Just the Price
If the seller won’t budge on price, try negotiating the terms. Non-price items can sway a deal:
- Longer or shorter settlement: Match the seller’s preferred move-out date.
- Inclusions: Ask for that designer fridge or the outdoor furniture to be included.
- Deposit terms: Negotiate a lower initial deposit to keep your cash flow steady.
9. The "Subject to Solicitor Review" Clause
Agents often push for signatures on weekends when lawyers are closed. Never sign a contract without a professional review. Ask your solicitor for the exact wording to include a “subject to solicitor review” clause. This gives you a safe avenue to pull out if your legal team finds a “deal-breaker” in the fine print on Monday morning.
FAQs About First Home Buyer Myths
Do I need a 20% deposit to buy my first home?
No. Many first-home buyers purchase with less than 20%. While you may need to pay Lenders Mortgage Insurance (LMI), options like the First Home Guarantee scheme allow eligible Australians to buy with deposits as low as 5%.
Can I get a home loan with a HECS/HELP debt?
Yes. HELP debt does not automatically stop you from getting approved. Lenders factor in your yearly repayment based on your income, which slightly reduces your borrowing capacity but does not disqualify you.
Does a bad credit score mean I can’t buy a home?
Not necessarily. Lenders look at your full financial profile, including your income, savings history, and employment stability, rather than relying solely on your credit score.
What are the hidden costs of buying a house in Australia?
Beyond your deposit, you must budget for upfront costs like stamp duty (if applicable), conveyancing or solicitor fees, building and pest inspections, transfer fees, and LMI.
How do banks stress-test my income for a mortgage?
Australian banks add a buffer—typically around 3%—to current interest rates. They assess your income against this higher rate to ensure you can still make repayments if interest rates rise in the future.
Does Lenders Mortgage Insurance (LMI) protect the buyer?
No, this is a common myth. LMI protects the bank in case you default on your loan. However, it benefits you by allowing you to enter the property market sooner with a smaller deposit.
Does pre-approval guarantee final approval?
No. Final (unconditional) approval can still change if the property valuation falls short, the property type doesn’t meet lender criteria, or your personal financial situation changes before settlement.
Should I always choose the lowest interest rate?
Not always. A slightly higher rate might offer better overall value if it includes features like an offset account, unlimited redraws, flexibility, and lower ongoing or exit fees.
Next Steps And Getting Your Home Loan.
Our team at Hunter Galloway is here to help you buy a home in Australia. Unlike other mortgage brokers who are just one-person operations, we have an entire team of experts dedicated to helping make your home loan journey as simple as possible.
If you want to get started, please give us a call on 1300 088 065 or book a free assessment online to see how we can help.
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