Start with the number, not the listing
Almost everyone does this in the wrong order: browse, fall for a place, then work out whether it was ever affordable.
Settle your capacity first — a real figure built from your income, expenses and commitments, checked against lenders who would realistically say yes to you. Then look at property you can actually act on.
How lenders read your borrowing power
Lenders do not lend against your salary. They lend against your surplus.
- They stress-test the rate. Lenders must check you could still afford the loan at a rate well above the one you will pay.
- Card limits count, not balances. An unused card with a big limit still reduces your capacity.
- Declared expenses have a floor. If your stated living costs fall below a household benchmark, the lender uses the benchmark instead.
- HECS and buy-now-pay-later show up. Both reduce what you can borrow.
Deposit, and the 20% question
Twenty per cent is the level at which most lenders stop requiring lenders’ mortgage insurance. It is a threshold, not a rule.
LMI protects the lender, not you. It is usually a one-off premium, often added to the loan rather than paid up front, and it gets more expensive the smaller your deposit.
When paying it makes sense
Buying a year earlier in a rising market can outweigh the premium — and you stop paying rent sooner.
When it does not
A large premium to buy marginally sooner in a flat market is just a cost.
Government schemes and grants
There are broadly three kinds of assistance, and they can often be combined.
Stamp duty concessions
State based, and the biggest saving for most buyers. Our calculator applies the current concession for your state.
First home owner grants
Cash contributions set by each state, usually restricted to newly built homes.
Guarantee & shared equity
Schemes letting eligible buyers purchase with a smaller deposit and no LMI, or with a government contribution.
What to budget for beyond the deposit
Your deposit is not your only up-front cost.
- Stamp duty, unless you are exempt.
- Legal or conveyancing fees, and building and pest inspections.
- Lender application and valuation fees.
- Mortgage registration and transfer fees.
- Council and water rate adjustments at settlement.
- Building and contents insurance, from the day you are on the hook.
Then there is moving, and the list of things a first home always turns out to need. Leaving a buffer after settlement is planning, not pessimism.