Buying your first home is one of the most exciting milestones in life—but it can also feel overwhelming. This guide breaks down everything you need to know about purchasing your first property in Victoria.
First Home Buyer Benefits in Victoria
As a first home buyer, you may be eligible for significant government benefits that can save you tens of thousands of dollars.
First Home Owner Grant (FHOG)
- Amount: $10,000
- Eligibility: New homes (newly built or substantially renovated) up to $750,000
- Requirements: Australian citizen or permanent resident, never owned property in Australia
Stamp Duty Concessions
- Full exemption: Properties up to $600,000 (save up to ~$31,000)
- Partial concession: Properties $600,001 to $750,000 (sliding scale)
- No concession: Properties over $750,000
How Much Can You Borrow?
Your borrowing capacity depends on several factors:
- Income: Your gross annual income (before tax)
- Expenses: Living costs, existing debts, credit card limits
- Deposit: How much you've saved
- Credit history: Your track record with credit
As a rough guide, many lenders will consider lending up to 6x your annual income, but this varies significantly based on your individual circumstances.
Pro Tip
Credit card limits reduce your borrowing capacity even if you don't use them. Consider closing unused cards or reducing limits before applying.
What Deposit Do You Need?
The deposit you need depends on your goals and what schemes you can access:
- 2% deposit: Family Home Guarantee (single parents)
- 5% deposit: First Home Guarantee (limited places available)
- 10% deposit: Standard minimum, but you'll pay LMI
- 20% deposit: Avoid Lenders Mortgage Insurance (LMI)
What is LMI?
Lenders Mortgage Insurance protects the lender (not you) if you default. It applies when borrowing more than 80% of the property value. LMI can cost $10,000-$30,000+ depending on loan size and LVR.
The Home Buying Process
- Get pre-approved: Know your budget before you start looking. Pre-approval typically lasts 3-6 months.
- Find your property: Search online, attend open homes, consider using a buyer's advocate.
- Make an offer: Private sale (negotiate directly) or auction (bid on the day).
- Sign the contract: You'll typically have a 3-day cooling off period for private sales (not auctions).
- Formal approval: We submit your full application with the property details.
- Settlement: Usually 30-90 days after signing. The property becomes yours!
Additional Costs to Budget For
Beyond your deposit, you'll need funds for:
- Stamp duty: Unless exempt (see above)
- Conveyancing: $1,000-$2,000
- Building & pest inspection: $400-$600
- Loan fees: Varies by lender
- Moving costs: $500-$2,000
- Settlement adjustments: Council rates, water, etc.
Budget approximately 5% of the purchase price for these costs (on top of your deposit).
Common Mistakes to Avoid
- Not getting pre-approved before searching
- Underestimating ongoing costs (rates, insurance, maintenance)
- Making major financial changes during the application process
- Skipping building inspections to save money
- Not reading the contract carefully
Next Steps
Ready to start your first home journey? Here's what to do:
- Use our borrowing calculator to estimate your capacity
- Check stamp duty with our stamp duty calculator
- Book a free consultation to discuss your options
