Buying a home

""Home sweet home

Buying your first home is both exciting and nerve-wracking. It is a major decision that takes planning and research, and careful budgeting. Here are some tips to help you get started.

Are you ready to buy?

You are ready to become a homeowner if you have the following things in place:

  • A substantial deposit - The bigger the better when you're saving for a home. (As a rough guide, aim to save 20% of the purchase price plus enough to cover costs.)
  • A regular savings habit - A solid track record of employment and a history of regular savings in your bank account will make it easier for you to get a home loan.
  • Pre-approval for a loan - Compare a few different loans before you decide. Ask your lender for a key facts sheet on each home loan so you can compare more easily. Once you pick the loan you'll know what the repayments will be and how much you can afford to spend on a property.
  • Some additional savings - These will act as a buffer if interest rates rise and your repayments increase.

Video: Scott Pape's top tips on buying a home

Tips for 1st home buyers video

The Barefoot Investor, Scott Pape, gives his tips on buying a home. He explains:

  • How much deposit you should have
  • Where is the best place to save for your deposit
  • Whether now is a good time to buy

Case study: Jane's dream comes true

""'My partner and I had been renting forever and could see house prices getting higher and higher - plus we weren't getting any younger. We decided to bite the bullet and for 4 years we saved every cent we could until we had a big enough deposit to get away with the smallest possible mortgage.

'We found a rundown house in a great street and it has become our labour of love to make it our dream home. Our plan is to put extra money into our mortgage so we can pay it off in 15 years.'

Jane, 33

Help for first home buyers

Government assistance is available for eligible first home buyers (not investors). See if a first home saver account is for you, and visit the First Home Owner Grant website.

How much can you afford?

A good way to find out how much you can afford to spend on a property is to review your household budget. If you don't already have one, use our budget planner to:

  • Take what you've saved as a deposit, add in first home buyer assistance (if applicable), then work out how much you can afford to borrow
  • Work out how much you can comfortably afford to repay on a home loan each month, and add a bit more to act as a buffer in case of interest rate rises
  • Include all the costs that come with home ownership: up-front costs like stamp duty and legal fees, ongoing costs like land and water rates, house and contents insurance, and repairs

Budget planner

Mortgage calculator

Stamp duty calculators

One of the bigger upfront costs you may have to pay is stamp duty or transfer duty on your property. Find out how much you will need to pay using calculators on the websites below. If you are a first-home buyer, check what stamp duty concessions you are entitled to in your state.

ACT -  Revenue Office: Calculators

NSW - Office of State Revenue: Calculator - for land and property transfers

Northern Territory - Department of Treasury and Finance: Stamp duty calculators

Queensland - Office of State Revenue: Transfer duty calculator

South Australia - RevenueSA calculator: Stamp duty on conveyances

Tasmania - Department of Treasury and Finance: Property transfer duty calculator

Victoria - State Revenue Office: Our calculators

Western Australia - Department of Treasury and Finance: Calculators

Video: Paying off your mortgage

how I paid my mortgage video

Di Motton, a Victorian teacher, explains how she paid off her first mortage in her 30s in this MoneySmart Teaching video.

Finding the right property

There's no point looking for a waterfront mansion if you can only afford a boatshed. Once you've set your price range, identify the suburbs that have properties in that range - it will save you a lot of legwork. Go to the Australian Property Monitors: Home Price Guide to see property prices in different suburbs.

Then comes the fun part: finding the house or unit you want. Take your time and consider things like proximity to schools, transport and amenities, and the condition of the property. Does it need major repairs?

Before you buy, arrange for building and pest inspections, and have the contract checked by a conveyancer or solicitor before you sign. Make sure the person inspecting your future home is qualified to do so, such as a licensed builder, architect or surveyor.

In some states you can also have inspections during the 'cooling-off period', or the 5 days after you sign the contract, as long as you don't buy at auction - where there is no cooling-off period - and you're prepared to lose part of your deposit if you withdraw during the period.

If you plan to buy a property as an investment, rather than a home to live in, read our information about investing in property.

Buying a home for the first time can feel like a giant leap into the unknown, but there are plenty of things you can do to make sure you don't fall into a financial abyss. Keep to your budget, put some money aside for emergencies, and take your time to find a place that feels like home.


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Last updated: 19 Nov 2013

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