The steps of a first home purchase in order: borrowing, deposit, government schemes, pre-approval, upfront costs and the sale itself. Updated October 2026.

Step 1, Know Your Numbers

Before you look at a single listing, you need two figures: how much you can borrow and how much you need to save. These are not the same thing, and confusing them is the most common mistake first home buyers make.

Use our Affordability Calculator to get a realistic borrowing estimate based on your actual income, expenses, and the current interest rate.

Step 2, How Much Deposit Do You Need?

The headline number is 20%. That is the threshold below which you pay Lenders Mortgage Insurance (LMI). But 20% is not a hard requirement. You can buy with as little as 5% deposit under certain government schemes (more on that below).

Example: For a $750,000 home, a 20% deposit is $150,000. A 5% deposit is $37,500, and LMI on the $712,500 loan is about $26,300 by our LMI calculator, unless the 5% Deposit Scheme applies.

LMI protects the lender, not you. It is a one-off premium rolled into your loan or paid upfront. Whether it makes sense to pay it depends on your timeline, if property in your target suburb is rising faster than you can save, getting in earlier with LMI can be the right call.

Step 3, Government Schemes Worth Knowing

5% Deposit Scheme (formerly the First Home Guarantee)

The federal government guarantees the part of the loan above 80% of the price, so an eligible first home buyer with a 5% deposit pays no LMI (single parents: 2%). Since 1 October 2025 there are no income caps and no limit on places. Price caps vary by location. Full guide.

First Home Owner Grant (FHOG)

A cash grant for first home buyers of a new home; no state pays it on an established home. Amounts as verified in July 2026: $10,000 in NSW, VIC and WA, $15,000 in SA, $20,000 in TAS (from 1 July 2026), $30,000 in QLD, and $50,000 under the NT HomeGrown Territory Grant. The ACT has no grant. All have conditions and some have price caps; check your state revenue office before you rely on one. The grants page lists each one with its source.

Stamp Duty Concessions

Every state offers some form of stamp duty relief for first home buyers, ranging from partial discounts to full exemptions below certain price thresholds. Use our Stamp Duty Calculator to see what applies in your state and at your target price point.

First Home Super Saver (FHSS)

Voluntary contributions to super can later be released for a first home deposit, up to $50,000 (the limit since 1 July 2022). The benefit is that concessional contributions are taxed at 15% inside super rather than at your marginal rate. Release goes through the ATO: request an FHSS determination before you sign a contract.

Step 4, Get Pre-Approved

A pre-approval (also called conditional approval or approval-in-principle) tells you what a specific lender will lend you, subject to a satisfactory property valuation. It is not a guarantee, but it gives you confidence to bid at auction and shows sellers you are serious.

Pre-approvals usually last 90 days and need payslips, tax returns, bank statements and ID. Each formal application is recorded on your credit file, and several in a short time can lower your score; a broker can compare lenders before you apply to one.

Find a broker near you →

Step 5, Understand the True Cost of Buying

The purchase price is just the start. Budget for all of these before you sign anything:

Stamp duty: at $750,000 without a concession, from 3.6% (QLD) to 5.3% (VIC) of the price; the stamp duty calculator has every state
Conveyancing / legal fees: vary by state and firm; ask for a fixed quote that itemises disbursements
Building and pest inspection: a few hundred dollars; get one for any established home
Lender fees: application fee, valuation fee, mortgage registration (varies by lender)
Moving costs: $1,000–$5,000 depending on distance and volume
Initial repairs and setup: budget at least $2,000–$5,000 for immediate needs

A common rule of thumb is 5% of the price for all upfront costs. In VIC and SA, where duty at $750,000 is highest (5.3% and 4.7%), allow 6–7% without a first home buyer concession.

Step 6, What Happens at Auction vs. Private Treaty

In Australia, homes are sold either at auction or by private treaty (negotiated sale). In Sydney and Melbourne, auctions dominate, especially for established houses. In Queensland and WA, private treaty is more common.

At auction, there is no cooling-off period. You must have your finance ready, your building inspection done, and your contract reviewed by a solicitor before bidding. If you win, you sign and exchange contracts on the day and pay the deposit, usually 10%.

Private treaty sales have a cooling-off period in most states, from 2 to 5 business days depending on the state; WA and Tasmania have none. Check your state's rules before you sign.

Key Takeaways

Calculate your borrowing capacity before you start looking
Check which government schemes you qualify for
Budget about 5% of the price for upfront costs beyond the deposit (6–7% in VIC and SA)
Get a pre-approval in place before inspecting properties seriously
Always get a building and pest inspection, even if the market feels hot
A mortgage broker is usually free to you and compares loans across its lender panel