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
- 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
- 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
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
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
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
- 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
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:
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
Department of Treasury and Finance: Property transfer duty
Victoria - State Revenue
Office: Our calculators
Western Australia - Department
of Treasury and Finance: Calculators
Finding the right
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
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.
Last updated: 19 Nov 2013
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