- Buying a home in Australia is achievable with the right preparation, budget, and strategy.
- Understanding your deposit, borrowing power, and upfront costs can help avoid surprises later.
- First home buyers can consider options like rentvesting, apartments, guarantor loans, or government schemes.
- Comparing home loans and doing thorough property checks are crucial steps in the homebuying process.
Between rising property prices, saving a deposit, navigating home loans and understanding government schemes, buying a home in Australia can feel complex. But with the right preparation, realistic expectations, and a clear strategy, home ownership is still achievable.
Before you buy: Getting clear on your finances
First things first, get a clear picture of your financial position. This not only helps set realistic expectations, but can also save you time (and disappointment) later.
Save for a deposit
Lenders typically prefer borrowers to have a 20% deposit, which allows you to avoid lenders mortgage insurance (LMI). However, many buyers enter the market with less, particularly first home buyers who may use government schemes or guarantor arrangements.
Some buyers may be able to boost their deposit through:
- First Home Super Saver Scheme (FHSSS) - Use eligible voluntary super contributions towards a first home deposit
- Help to Buy - A shared-equity program that allows eligible buyers to purchase with a smaller deposit
- First home owner grants - Available in many states and territories, subject to eligibility rules
How to save up for a house deposit
Here are a few practical ways you can boost your savings for that down payment.
- Reduce living costs by moving in with family or sharing with a flatmate.
- Increase income through extra shifts, a side hustle, or renting out a spare room. Read our guide on hosting your property on Airbnb here.
- Sell unused items to boost savings.
- Cut discretionary spending like unused subscriptions.
- Park savings in a high-interest savings account.
- Consider investing (with risk in mind). If you're not familiar with it, this beginner's guide to investing may be useful.
- Reduce transport costs where possible.
Understand your borrowing power
Getting home loan pre-approval gives you a clearer idea of how much you may be able to borrow. Lenders assess your income, expenses, existing debts and current interest rates, and apply serviceability buffers to test whether you could still afford repayments if rates rise.
Documents you need to prepare include
- Proof of identification (driver's license, passport, Medicare card, etc.)
- Proof of income (payslips, tax returns, etc.)
- Bank statements and proof of savings
- A list of your current assets and liabilities (e.g. credit card and personal loan debt)
- Take note: Getting pre-approved doesn't guarantee your home loan application will be successful.
Use our Home Loan Borrowing Power Calculator to estimate the maximum amount a lender might be willing to lend you for a home loan.
How the homebuying process works
While every purchase is different, the homebuying journey generally follows a similar path.
1. Find a competitive home loan
Choosing a competitive home loan can save you thousands over the life of the loan. When comparing loans, consider features such as redraw, offset accounts, early repayment options and ongoing fees.
Factors to consider include:
- Is there a redraw facility available?
- Can you pay out your loan early by making extra payments?
- Can you link an offset account?
- Are there any ongoing fees payable?
Unsure what the difference is between a redraw facility and an offset account? Find out here.
2. Get pre-approval
Home loan pre-approval gives you an estimate of how much a lender is willing to let you borrow, giving you confidence in your search. While it's not a guarantee, having pre-approval can help you act quickly when you find the right property.
If you're preparing to buy a home, the table below can help you compare owner-occupier home loans with competitive interest rates and features.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.94% p.a. | 5.98% p.a. | $2,978 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.89% p.a. | 5.80% p.a. | $2,962 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.99% p.a. | 6.02% p.a. | $2,995 | Principal & Interest | Fixed | $0 | $0 | 60% |
| Promoted | Disclosure | ||||||||||
5.93% p.a. | 5.93% p.a. | $2,975 | Principal & Interest | Variable | $0 | $395 | 70% | Disclosure |
3. Research locations and property types
Deciding where and what to buy is often one of the toughest parts of the process. Buyers typically weigh up:
- Houses vs apartments
- Inner-city vs outer-suburb
- Lifestyle preferences vs long-term growth potential
This is also where many buyers start exploring alternative strategies, such as buying in a more affordable area or choosing a smaller property to get a foot in the door.
4. Inspect properties and do your checks
Attending inspections is about more than just aesthetics. It's important to consider the condition of the property, its location, strata fees (for apartments), and any potential issues flagged in building and pest reports.
Searching for a suitable home doesn't only happen online. Take time to drive around and visit the property personally to get a much better look at it and get a feel of the local community.
5. Have the house professionally inspected
Once you've personally visited the property, enlist professionals to conduct thorough checks.
- Take note: A building inspection is an important part of the legal checklist for buying a property and is performed by a licensed and insured professional.
Here's what will be inspected:
- Structural soundness - The building's integrity, faulty roofing, water damage, sagging walls, etc.
- Safety issues - Presence of asbestos, cracks in walls, loose steps/balustrades, etc.
- Repairs - Determine what's needed in the way of future repairs
- Electrics and plumbing - Check if they have been installed to certain requirements and that the boundaries are in the correct position
A pest inspection, on the other hand, checks for obvious signs of termite activity and other pest issues such as wasps, cockroaches, ants, etc.
Read more about building and pest inspection to learn what it entails.
6. Make an offer or bid
Depending on whether the property is being sold privately or at auction, you'll either submit an offer or bid on auction day. Understanding local market conditions can help inform how competitive you need to be.
- Savings.com.au's tip: Stick to your budget and take emotion out of the equation. It's easy to see yourself living in a certain home, but if you can't afford it, you can't afford it. Additionally, be prepared to walk away if you think the real estate agent is being unreasonable with their price expectations.
7. Exchange contracts and settle
Once your offer is accepted, contracts are exchanged, and the settlement process begins. This is when legal and financial checks are finalised before ownership officially transfers.
Homebuying and home ownership costs to consider
When purchasing a property, there is a lot more to it than just the house sale price.
On top of your deposit, there are upfront costs you'll need to budget for alongside ongoing costs once you've moved into the property.
Here's a list of costs to keep an eye on during each stage of the buying process.
Upfront costs
The most common upfront costs associated with buying a property include:
- LMI - This is the cost you pay when you borrow more than 80% of the property's value.
- Legal and conveyancing fees - These fees are part of the purchase transaction when you seek assistance from a solicitor or conveyancer to help you prepare documentation and deal with the vendor on your behalf.
- Stamp duty - It varies from state to state, though concessions exist for certain types of buyers (e.g., first home buyers). Calculate how much you're going to pay using our Stamp Duty Calculator
- Building & pest inspections - These are a must to help ascertain whether the property is in good condition.
Ongoing costs
Below are some ongoing costs often associated with owning and maintaining a property:
- Water and council rates - These are charges that arrive on a quarterly basis and are specific to your own property.
- Strata and body corporate - These charges largely apply to apartments, units or townhouses. They cover the maintenance of the shared areas around the property, building insurance and the administrative fees.
- Home and contents insurance - The cost of home insurance can vary from property to property, and from insurer to insurer, so be sure to get a range of quotes to find the right policy for you.
- Regular maintenance and repairs - It's important to budget for regular maintenance and repairs should the need arise.
Smart homebuying strategies to consider
Given affordability challenges in many parts of Australia, buyers are increasingly thinking outside the box. Here are the popular strategies for first home buyers trying to break into Australia's tight real estate market.
Rentvesting
Rentvesting is when you rent the home you live in while buying an investment property elsewhere (usually where prices are more affordable). It's often used by buyers who want an inner-city lifestyle but can't afford to buy in that area yet.
Lloyd Edge, director of Aus Property Professionals, said that by rentvesting and building a property portfolio on the side, you can leverage your built-up equity down the track to buy your dream home, which you would presumably live in.
Lloyd Edge (Image supplied)
"Rentvesting also allows you to make strategic decisions about where to buy property for the best growth, and you can buy properties from all around the country, instead of making an emotional decision based on where you want to live," Mr Edge said.
Pros of rentvesting
- Buy sooner - You may be able to purchase in a cheaper suburb or regional area while renting where you want to live.
- Lifestyle flexibility - You're not tied to living where you buy.
- Potential tax benefits - Investment property expenses (including interest, in many cases) may be deductible, depending on your situation. As a property investor, you can take advantage of things like negative gearing if making a loss, and capital gains tax discounts.
Cons of rentvesting
- You're still renting - Less stability and limited ability to renovate where you live.
- Extra costs - You may be paying rent and covering ownership costs (rates, insurance, repairs) if rental income doesn't fully cover expenses.
- First-home buyer implications - Some government schemes and concessions are designed for owner-occupiers, so buying as an investor first may reduce what you can access later (rules vary by state and program).
Buying an apartment instead of a house
Apartments are often cheaper than houses, which can make them a more accessible entry point for first home buyers, especially in capital cities.
- "Apartments are cheaper, and if they are in a good area, investors can turn them into short-stay properties and generate more money," said Matt Peden, principal at Independent Property Group.
Assuming you want to live in your apartment, there are a few considerations to take into account before deciding if it's the right option, such as whether you need ample space and a backyard, or you would rather have a small, easily maintained home.
Pros of buying an apartment
- Lower purchase price (generally) - Smaller deposit and potentially lower repayments.
- Lower maintenance - No lawns, less external upkeep.
- Amenities/security - Some buildings include gyms, pools or secure entry.
Cons of buying an apartment
- Strata/body corporate fees - Ongoing costs can be high and vary widely by building and facilities.
- Capital growth can differ - Apartments may grow differently from houses depending on location, supply, and land value.
- Rules and restrictions - Renovations, pets and short-stay letting can be limited by strata by-laws.
To help you decide, read our explainer on whether it's better to buy an apartment, townhouse, or house.
Using government incentives and schemes
Government schemes can help eligible buyers enter the market with a smaller deposit, but they come with eligibility rules, property price caps and limited places.
- Australian Government 5% Deposit Scheme - From 1 October 2025, eligible first home buyers can buy with 5% deposit (or 2% for eligible single parents/guardians) and avoid LMI.
- Help to Buy (shared equity) - Supports up to 10,000 buyers per year, with the government taking an equity share (up to 40% for new homes and 30% for existing homes in many areas).
Pros of using government incentives
- Lower deposit pathways - Some schemes reduce the barrier to saving 20%.
- May get you in sooner - Helpful for buyers on lower incomes (depending on scheme rules).
- Can combine supports - In some cases, you may stack different supports (e.g., FHSSS + state concessions), depending on eligibility.
Cons of using government incentives
- Limited places and conditions - Some schemes cap annual spots and have strict criteria.
- Shared equity trade-off - With Help to Buy, the government shares in your home's value changes, and you may need to buy back their share later.
- May affect competition - Schemes can increase buyer demand in certain price brackets.
Getting a guarantor home loan
A guarantor loan is where a family member (often a parent) uses equity in their own property as extra security for your loan. This can help some borrowers buy with a smaller deposit or avoid LMI.
By using a guarantor, some lenders may allow borrowing up to 100% (and sometimes more) of the purchase price. However, availability and policy settings vary widely by lender and borrower profile.
Pros of guarantor home loans
- Smaller deposit needed - May help you buy sooner.
- Potential to avoid LMI - Depending on the structure and the lender.
Cons of guarantor home loans
- High stakes for the guarantor - If you can't repay, the guarantor's property/equity may be at risk.
- "If you want to go down this route, ensure that you seek advice from a lawyer, and educate the person who's going to be guarantor so they're fully aware of all the risks involved for them," Mr Edge said.
Buying with family or friends
Buying with another person can increase your deposit and borrowing power, but it also increases risk if circumstances change.
Pros of buying with family or friends
- Higher buying power - Two incomes and combined savings can expand your options.
- Shared costs - Mortgage repayments and bills are split.
Cons of buying with family or friends
- Relationship risk - Money stress can damage friendships/family ties.
- Exit planning matters - You'll want clear agreements on contributions, ownership shares, what happens if someone wants out, and how sale profits/losses are handled.