12 First Home Buyer Myths: What Actually Matters in Australia

Being told you need a 20% deposit can make buying your first home feel years away. But a deposit is only one part of the decision. You also need a loan you can repay, enough money for buying costs and a property the lender will accept.

Some home loan myths make buyers wait unnecessarily. Others encourage them to commit before their finance is ready. This guide explains the difference and gives you a check to make before your next step.

The grant and stamp duty examples below are for Queensland. If you are buying elsewhere, check your state or territory’s rules before including assistance in your budget.

You can sometimes buy with less, but you still need to qualify for the loan. Eligible first-home buyers can use the Australian Government 5% Deposit Scheme to buy with a minimum 5% deposit without lenders mortgage insurance, through a participating lender.

The scheme has no income caps, but eligibility, property price limits and lender approval still apply. You must meet its ongoing requirements, including living in the home. It does not give you the missing deposit as cash or pay your mortgage for you.

For a $700,000 purchase, a 5% deposit is $35,000. A 20% deposit is $140,000. Those are deposit calculations only: add buying costs and check the loan needed under each option. Borrowing more means a larger debt to repay.

Ask for a comparison using your savings, buying costs and comfortable repayment budget. Our low-deposit home loan guide explains the possible pathways.

Family assistance is one option, not an application requirement. Start by checking whether your own savings, income and available first-home assistance are enough.

If a family guarantee is being considered, understand what the family member is promising. They can become responsible for the guaranteed debt if you cannot pay, and property used as security can be at risk. Independent legal advice matters.

Compare a loan in your own names with the proposed guarantee, including how and when the guarantee could be released. Read our guarantor home loan guide.

A grant, a duty concession and a government guarantee are different forms of help. Their rules do not necessarily match.

In Queensland, the $30,000 first home owner grant continues for eligible contracts from 1 July 2026. It is for eligible new homes valued at less than $750,000, including the land and relevant variations. An ordinary established home does not qualify just because it is your first purchase. Residency and other conditions also apply.

Transfer duty is a separate calculation. Eligible Queensland first-home buyers purchasing a new home under a contract dated from 1 May 2025 can receive a full concession on the qualifying residential property, without a value cap. For transactions from 1 August 2026, buyers must be Australian citizens, permanent residents or specified foreign retirees. Other eligibility conditions and additional land can change the result.

Have your conveyancer confirm the duty position for the actual property and each buyer. Use our first-home grants guide to compare assistance, rather than assuming every program applies.

HELP debt does not automatically prevent a home loan. Its repayments can affect the lender’s affordability assessment, alongside your other commitments.

APRA allows banks some flexibility where HELP repayments will have little effect over the mortgage term. Its guidance gives the example of a debt expected to be cleared within 12 months through compulsory repayments. This is not a promise that every lender will disregard your debt.

Paying HELP off with your deposit savings also has a trade-off: you have less cash available for the purchase. Ask your broker to compare both positions before transferring money, using your current balance, income and available savings.

There is no single public score that guarantees a mortgage. Lenders assess your circumstances and credit information; a number from an app cannot tell you the whole approval outcome.

Check the report behind the score. Credit accounts, repayment history, defaults and credit enquiries can matter. If something is wrong, request a correction before lodging an application. You can obtain free credit reports from the reporting bodies.

Explain any missed payments or unusual entries to your broker before applying. Avoid sending multiple applications just to see which lender accepts you.

Pre-approval still has conditions. A lender may need to check the property, valuation and your financial position before giving final approval. CommBank’s published process, for example, includes final checks after receiving the contract. Other lenders have their own requirements.

A property below your price limit can still be unsuitable security. Your approval can also need reassessment if your income, debts or circumstances change.

Send the property details and contract to your broker and solicitor before committing. Ask what remains outstanding, when the approval expires and whether the proposed finance condition is appropriate. See our home loan pre-approval guide.

Set a repayment budget you can live with before choosing your maximum purchase price. Allow for rates, insurance, maintenance, body corporate charges where relevant and the spending you expect after moving.

Banks generally test new housing loans at least 3% above the actual rate, subject to their policies and permitted exceptions. That test is part of the lender’s assessment; your own budget still needs room for your plans and unexpected costs.

Try putting the difference between your rent and proposed housing budget into savings. If that feels difficult now, revisit the price range. Use our mortgage repayment calculator to test the loan amount, term and rate you are considering.

Buying costs sit alongside the deposit. Allow for legal work, searches, inspections, registration fees, moving costs and any duty or lenders mortgage insurance that applies. Confirm what must be paid before settlement and what can be included in the loan.

Keep a purchase worksheet with these separate amounts:

Decide what cash you want left after settlement before increasing your offer. Scheme rules may affect how much savings you must contribute, so confirm this with the participating lender too.

Lenders mortgage insurance, or LMI, protects the lender if you fail to repay. Paying it does not insure your income or remove your responsibility for the debt.

LMI can be relevant when borrowing with a small deposit, although some borrowers qualify for an exemption or guarantee pathway. Ask whether it applies, how much it costs and whether financing it adds to your debt. Consider your own insurance needs separately.

Compare a suitable loan’s full cost and conditions. A bank you already use may be competitive, but familiarity alone doesn't mean its loan suits your purchase.

Check fees, repayments, offset or redraw access, extra repayment limits and what happens after a fixed or introductory period. Compare like-for-like loan amounts and terms. Features can cost extra, so choose those you expect to use.

A fixed rate can provide certainty for its fixed period. It can also restrict extra repayments or carry break costs. A variable or split loan may suit different plans; none is automatically the right choice for every first-home buyer.

Ask why the recommended loan suits your deposit, income and plans, and what alternatives were compared. Start with our home loan features guide.

The cash rate and your home loan rate are different. On 29 September 2026, the RBA announced an increase in the cash-rate target from 4.35% to 4.60%, effective 30 September.

Your lender decides the rate and effective date for your loan. An existing fixed rate generally stays unchanged during its agreed fixed period; new fixed offers can move independently of the cash rate.

Read your lender’s notice before changing your repayment budget. If you are still buying, ask whether your proposed loan or pre-approval needs another check. A forecast is no reason to stretch your budget; our interest-rate outlook explains what the banks currently expect.

Understand the contract before you sign or bid. A pre-approval and an agent’s reassurance do not replace legal advice or property checks.

In Queensland, buying at auction has no cooling-off period. Organise your finance position, legal review and necessary inspections beforehand.

For a private sale, ask your solicitor which finance and inspection conditions are appropriate, and what notice and deadline requirements apply. Do not assume a concerning inspection report automatically lets you cancel a contract.

Agree on your maximum price, contract conditions and inspection plan before negotiating. An offer should reflect the property and your circumstances; a low opening offer is not automatically a good strategy.

Choose the question you need answered first: your deposit, borrowing limit, available assistance or a particular property.

For a useful conversation, have these ready:

• Your savings balance and where the deposit is coming from.
• Recent income evidence and details of regular expenses.
• Existing debts, credit limits and your HELP balance, if applicable.
• Your intended price range and property type.
• Any pre-approval, proposed contract or deadlines you are working towards.

Hunter Galloway can review your deposit options, borrowing position and lender requirements before you apply. Bring the assumption you are unsure about and we can work through what needs checking.

For the whole process, use our first-home buyer guide. If repayments on existing debts are already unmanageable, speak with your lender or a free financial counsellor before taking on a mortgage.