If you’re looking for clear, straightforward information about how to buy your first home, you’ve come to the right place. Here you’ll find all the steps and costs involved in getting your foot in the property door, making the process of planning, budgeting and decision making so much simpler without the stress of surprises along the way. Discover why it’s important to get your first home loan approved before you start the search for your dream home, and how to apply for a cash boost with the First Home Owner’s Grant or the Home Builder’s Grant.
The most important thing to do, before you start house hunting, is work out exactly how much you have to spend and how much you can afford to borrow. This means taking a good look at your total income as well as all your financial commitments and savings. You’ll need to have your finances approved before you can make an offer on your first home, so it also means getting pre-approval on your home loan.
Mortgageport’s borrowing power calculator gives you a guide to how much you can borrow. When you’re ready to chat with us, we’ll help you work this out in more detail. But remember, no matter how much you are able to borrow, it’s important to not over-commit yourself financially. You need to consider your present and likely future income, and how stable it will be over time. You also need to think about how you would deal with higher interest rates and repayments, being aware that Australia’s current interest rates are still quite low. To make first home ownership enjoyable, you have to make it affordable. Find out what you can borrow with our handy calculator.
It’s important to know up-front all the costs of buying your first home, apart from the actual house price and loan repayments. These costs will vary depending on the price of your property and size of your home loan and can add up to several thousands of dollars. A sensible guide to keep in mind is around 5% of the property value. These additional costs include:
Loan establishment charges
Stamp duty (or ‘transfer” duty)
Most Australian States have Stamp Duty exemptions for first home buyers, which is good news because it usually the biggest purchasing cost. Find out if you’re exempt from paying Stamp Duty on your first home, or how much you might need to pay, with our handy calculator.
How do I get pre-approval on my first home loan?
Make your journey to finding – and securing – your dream home quicker and easier by having your loan pre-approved before you even start home hunting.
Pre-approval means you can search for a home with the confidence of knowing you can borrow up to a certain amount, and you can act quickly to win a sale if you need to.
Loan pre-approval also gives you great comfort and assurance if you intend to buy at auction, where you are unequivocally committed to the sale and need to pay a 10% deposit on the day if you’re the successful bidder.
Mortgageport can easily arrange loan pre-approval, and it costs you no extra.
Find out more about getting a great start in property with your first home loan pre-approved by Mortgageport.
The NSW Government provides the First Home Owner Grant (FHOG) as financial assistance for first home buyers in NSW. The First Home Owner Grant currently gives first home buyer a lump sum benefit of $10,000:
It can be used for towards your deposit or paying relevant expenses such as pest and building reports
The $10,000 grant is payable to all first home buyers where the home being purchased or built has a total value less than $650,000
The grant applies to residential dwellings only and does not apply to vacant land
In NSW the FHOG is funded by the state government and administered by the Office of State Revenue. It is not subject to income or asset tests, however proof of identity and place of residence conditions are required
The NSW First Home Plus Scheme (FHPS) provides exemptions or concessions on Stamp Duty for eligible first home buyers, including vacant land on which you intend to build your first home:
Stamp Duty exemptions for homes valued up to $500,000
Stamp Duty concessions for homes valued between $500,000 and $600,000
Stamp Duty exemptions for a vacant block of residential land to build your home
Stamp Duty concessions for vacant land valued between $300,000 and $450,000
The FHPS offers stamp duty exemptions of up to $17,900, depending on the value of the property. To read more about the FHPS, please visit the NSW Office of State Revenue website.
The NSW Home Builders Bonus (HBB) has been in place since July 2010 to stimulate the construction of new homes in NSW. The provides further concessions on Stamp (transfer) Duty, complementing and extending the Stamp Duty concessions provided by the First Home Plus Scheme:
Stamp duty will no longer apply on purchases of new homes for less than $600,000 purchased ‘off the plan’.
Stamp duty will be cut by 25% on homes worth up to $600,000 that are bought during construction or at completion, which equates to a saving of $5,623.
Stamp duty will be exempt for people over 65 who buy a newly constructed home worth up to $600,000. This exemption will only apply to people intending to use their new home as their principal place of residence.
As a NSW first home buyer you can save up to a maximum of $22,490 under the Home Builders Bonus. These concessions initially applied until 2012, and have been extended.
Stay up to date with Government schemes on offer, as they can change from time to time. Visit NSW Office of State Revenue website for more information.