The Ultimate First Home Buyer Guide (Australia 2025)

Welcome to Your First Home Journey

Buying your first home is one of life’s biggest milestones. But with so many steps, schemes, and loan options, it can feel overwhelming. The good news? You don’t have to figure it out alone.

At Mortgage Matrix, we’ve helped hundreds of first-home buyers in Brisbane and across Australia get into the property market—often sooner than they thought possible.

This guide covers everything you need to know: from deposits and government incentives, to the hidden costs and steps to settlement.

Step 1: Understand Your Borrowing Power

Before you start scrolling through listings, you need to know how much you can borrow.

Lenders calculate this based on:

• ✅ Your gross annual income

• ✅ Other income (rental, business, casual jobs)

• ✅ Liabilities (credit cards, car loans, HECS/HELP debt)

• ✅ Living expenses and dependants

👉 Try our Borrowing Power Calculator to estimate your buying range.

💡 Top Tip: Don’t just aim for the maximum—make sure it fits your lifestyle (see Step 2).

Step 2: Set a Realistic Budget (Avoid Overcommitting)

One of the biggest risks first-home buyers face is becoming house poor—committing too much of their income to a mortgage and having little left over for living.

That’s where our calculators come in. Together they help you:

• Use our Home Loan Repayment Calculator to check your likely repayments

• Complete our Budget Calculator to see how those repayments fit into your lifestyle

• Compare repayments with your actual income and expenses

• See how much you’ll really have left each month

👉 Check your repayments and complete your budget calculator to make sure the loan suits your situation before you commit.

💡 Example: On a $550,000 loan at 6.0% interest over 30 years, repayments are ~$3,300/month. If your budget allows only $2,800 comfortably, you may need to adjust the property price or deposit.

Step 3: Save Your Deposit & Prepare for Upfront Costs

Here’s what most first-home buyers need:

• Deposit: 5%–20% of the property price

• Stamp Duty: Varies by state (often discounted/exempt for first-home buyers)

• Conveyancing / Legal Fees: $1,000–$2,500

• Building & Pest Inspection: $400–$700

• LMI: Required if deposit <20% (waived with schemes)

💡 Example: On a $600,000 property in QLD:

• 5% deposit = $30,000

• Stamp duty (with concession) = $0

• Fees & inspections = ~$3,000
  Total upfront = ~$33,000

Step 4: Government Schemes for First Home Buyers (2025 Update)

What’s Changed (as of Oct 2025)

• ❌ Income caps removed

• ✅ Unlimited access—no more quotas or limited places

• ✅ Price caps significantly increased

• ✅ Regional scheme merged into FHBG

Step 5: Guarantor Loan Options (Family Guarantee)

If saving a 20% deposit feels out of reach, a guarantor loan could be the solution.

How It Works

• A guarantor (usually parents) uses equity in their property as security (often up to 20%).

• You can buy with as little as 0–5% deposit and avoid paying costly LMI.

• You are still responsible for repayments, but the guarantor covers the guaranteed portion if you default.

Benefits

• ✅ Buy sooner without waiting years to save

• ✅ Avoid LMI (saving tens of thousands)

• ✅ Boost borrowing capacity

• ✅ Option to release guarantor once loan reduces

Risks

• ⚠️ Guarantor’s property is at risk if you default

• ⚠️ Family relationships may be affected if not managed clearly

• ⚠️ Not all lenders offer guarantor structures

Example

Buying a $600,000 home:

• Without guarantor = $120,000 deposit needed

• With guarantor = Parents guarantee $120,000 equity → buy now with little or no deposit

💡 Top Tip: While parents are most common, some lenders accept siblings or other close relatives.

Step 6: Credit Score & Debts – Why It Matters

Your credit score is one of the first things a lender checks. A poor score can mean higher rates, stricter conditions, or declined applications.

What Affects It

• Payment history (late or missed repayments hurt your score)

• Number of credit enquiries (too many raise red flags)

• Existing debts (credit cards, personal loans, buy-now-pay-later)

• Defaults or bankruptcies (stay on file for years)

Quick Fix Tips

• Pay all credit card and loan repayments on time

• Lower card limits (unused limits still count)

• Close unnecessary accounts

• Avoid multiple loan/credit card applications before buying

• Check your credit file yearly for errors

💡 Top Tip: A $10,000 unused credit card limit can cut borrowing power by thousands.

How Mortgage Matrix Helps

• We perform a soft credit check before applying (no impact to your score).

• This lets us match you with the right lender from the start.

• It also helps us avoid unnecessary applications and declines.

👉 This means smoother approvals and stronger chances of success.

Step 7: The Buying Process Step by Step

1. Get Pre-Approval – Know your budget and shop with confidence.

2. Property Search – Attend open homes and auctions with a clear limit.

3. Make an Offer – Or bid at auction.

4. Formal Approval – Lender finalises your application.

5. Settlement – Transfer complete—you get the keys!

Step 8: After You Sign a Contract – What to Do Next

Once you’ve had your offer accepted and signed a contract, the clock starts ticking. Here’s what you need to do quickly:

• Return all signed loan and bank documents ASAP – delays can risk settlement.

• Engage a solicitor or conveyancer immediately – they’ll review the contract, handle searches, and manage the legal transfer.

• Book building & pest inspections (if not already done) – critical for protecting yourself.

• Pay your deposit on time – usually required within a few days of signing.

• Stay in close contact with your broker – we coordinate with your solicitor and lender to keep everything on track.

💡 Top Tip: Missing a deadline after signing can result in penalties or even losing your deposit—so act quickly.

Common Mistakes First-Home Buyers Make

• ❌ Forgetting to budget for hidden costs

• ❌ Not checking credit score early

• ❌ Going straight to their bank instead of comparing 40+ lenders

• ❌ Overstretching repayments without a budget check

• ❌ Rushing into a loan without understanding features

• ❌ Delaying solicitor engagement after signing a contract

Success Story: From Renting to Owning

"We thought buying a home in Brisbane was impossible with just a 5% deposit. Mortgage Matrix helped us secure the First Home Guarantee, avoid LMI, and get into our townhouse much sooner. We now pay less on our mortgage than we did in rent."
— Emma & Jake, Brisbane

FAQs

1. How much deposit do I need for my first home?
With schemes, as little as 5%. With a guarantor, possibly no deposit at all.

2. Do first-home buyers pay stamp duty?
Often exempt—depends on property value & state.

3. Should I go to my bank or a broker?
A bank only shows their loans. A broker compares 40+ lenders, including guarantor and scheme options.

4. Can I buy my first home with no deposit?
Yes — if a guarantor can provide security, you may borrow 100% of the purchase price.

5. Do credit cards affect my home loan application?
Yes. Lenders assess your credit limits as potential debt. Keeping balances low and paying on time improves your chances.

6. Will applying hurt my credit score?
Not with Mortgage Matrix. We do a soft check first, protecting your credit file while finding the right lender.

7. What happens after I sign a contract?
You need to act quickly: return signed documents, engage a solicitor, pay your deposit, and complete inspections. Mortgage Matrix will coordinate with your solicitor and lender to keep things on track.

8. How long does approval take?
Pre-approval 1–2 days. Settlement 4–6 weeks.

Next Steps: Turn Knowledge into Action

Now you know the process and how to prepare, the next step is simple.

👉 Book Your Free First Home Buyer Appointment

When you book with Mortgage Matrix, we’ll:

• Check your borrowing power

• Use our Home Loan Repayment & Budget Calculators to ensure you’re not overcommitting

• Perform a soft credit score check to protect your credit history

• Compare 40+ lenders to find the right loan

• Guide you all the way to settlement

• Support you after you sign a contract, working with your solicitor to make sure everything runs smoothly