First home buyer loan guide: what you need to know before you buy
Buying your first home is an exciting milestone, but it can also feel overwhelming. Between saving a deposit, understanding government incentives, and choosing the right loan, there’s a lot to navigate.
A first home buyer loan is designed to help eligible buyers enter the property market with features and support that recognise you’re starting out. Understanding how these loans work, and what options are available, can help you buy with confidence and avoid costly mistakes.
What is a first home buyer loan?
A first home buyer loan is simply a home loan taken out by someone purchasing their first residential property. While the loan itself may look similar to a standard home loan, first home buyers may have access to:
Lower deposit options
Government schemes and guarantees
Stamp duty concessions or exemptions
Special lender policies for first-time buyers
The right loan structure can make a meaningful difference to your borrowing power and long-term repayments.
How much deposit do first home buyers need?
Traditionally, buyers needed a 20% deposit to avoid paying lenders’ mortgage insurance (LMI). However, many first home buyers now enter the market with a smaller deposit.
With the Australian Government 5% Deposit Scheme, eligible first home buyers can purchase with as little as 5% deposit without paying LMI. The government guarantees part of the loan, reducing the risk to the lender.
This has made first home buyer loans more accessible, particularly in markets like Wollongong and the Illawarra, where property prices have continued to rise.
Government support for first home buyers
Depending on your state and circumstances, you may be eligible for:
The Australian Government 5% Deposit Scheme
First Home Owner Grant (for new or substantially renovated homes)
Stamp duty concessions or exemptions
Shared equity or regional support programs
Eligibility rules vary by state and change over time, so it’s important to confirm what applies to your situation before committing to a purchase.
Choosing the right first home buyer loan
When comparing first home buyer loans, interest rate is important, but it’s not the only factor to consider. Other features can have a big impact over time, including:
Offset accounts or redraw facilities
Fixed vs variable rate options
Ongoing fees and flexibility
Ability to make extra repayments
A loan that suits one first home buyer may not suit another. Your income, future plans, and comfort with repayments all matter.
Why pre-approval matters for first home buyers
Getting pre-approval is one of the most important steps in the first home buying process. Pre-approval gives you:
A clear understanding of your borrowing capacity
Confidence when making offers or bidding at auction
Stronger negotiating power with sellers
It also helps prevent emotional overspending, which is a common risk for first home buyers.
Common mistakes first home buyers make
Some of the most common pitfalls we see include:
Focusing only on the deposit and forgetting upfront costs
Not allowing room in the budget for lifestyle changes
Skipping professional advice and relying on online calculators alone
Choosing a loan based purely on the lowest advertised rate
A well-structured first home buyer loan should support you not just on settlement day, but for years to come.
How a mortgage broker can help first home buyers
Working with a mortgage broker in Wollongong means you don’t have to navigate the process alone. A broker can:
Explain your first home buyer loan options clearly
Compare lenders and government schemes
Organise pre-approval and manage the application process
Help structure a loan that fits your goals and future plans
At Haus of Loans, we work with first home buyers across Wollongong and the Illawarra to make the process feel clearer, calmer, and more achievable.
Ready to explore your first home buyer loan options?
If you’re thinking about buying your first home, the best place to start is with a conversation. Understanding your borrowing power and loan options early can put you in a strong position when the right property comes along.
Get in touch with Haus of Loans, your local mortgage broker in Wollongong, to discuss first home buyer loans and take your first step towards home ownership with confidence.