Buying your first property can seem daunting; after all, it’s likely to be one of the biggest financial decisions you will ever make.
Here, we’ll cover the ways you can reduce the initial cost of buying your first home, and how to find and compare affordable home loans that will serve you well into the future.
See if you qualify for assistance or grants
First-home buyers can often access grants and other concessions that are unique to their situation and unavailable for investment purchases or second homes.
National grants for first-home buyers were introduced in July 2000, and each state offers slight variations on qualifying criteria. Find your territory and available grants below.
Australian Capital Territory (ACT)
The Australian Capital Territory offers the Home Buyers Concession Scheme, where first-home buyers are not required to pay stamp duty on a home purchase.
For more information, please visit ACT Revenue Office’s website.
New South Wales (NSW)
First home buyers in NSW may be eligible for a $10,000 grant to purchase their home and may receive concessions on stamp duty for property and land transfers.
For more information, please visit NSW Revenue Office’s website.
Northern Territory (NT)
Northern Territory (NT) offers a number of grants, including $10,000 for first-home buyers, stamp duty discounts, renovation grants and funding for household goods.
For more information, please visit NT.gov.au.
Queensland (QLD)
Queensland offers up to $15,000 for first-home buyers and a number of regional grants and concessions for specific land and property transfers.
For more information, please visit QLD.gov.au.
South Australia (SA)
South Australia has a $15,000 one-off FHOG for the purchase or construction of a new home but does not offer any concessions on stamp duty.
For more information, please visit Revenue SA’s website.
Tasmania (TAS)
First home buyers in Tasmania can receive a $20,000 grant and a 50% reduction in stamp duty on certain property transfers.
For more information, please visit the State Revenue Office of Tasmania’s website.
Victoria
First home buyers in Victoria may be eligible for a $10,000 grant toward the purchase of their home, provided the buyer and property meet certain conditions. There are also exemptions and discounts on properties up to the value of $750,000.
For more information, please visit the State Revenue Office of Victoria’s website.
Western Australia (WA)
First home buyers in Western Australia (WA) can receive $10,000 toward the purchase of their home. As in many other states, buyers may also qualify for a stamp duty exemption or discount depending on the value of their property.
For more information, please visit WA.gov.au.
Compare options from multiple sources
You’ve decided how much you can afford to borrow, and you’ve checked to see if you qualify for any available grants or concessions that may make purchasing your first home cheaper.
Now, it’s time to start comparing your options.
There are a few easy ways that you can compare home loans including:
- Checking comparison sites
- Using a mortgage broker
- Speaking to lenders directly
If you are using comparison websites that do not offer a personalised assessment with personalised loans and real rates, keep in mind that these offers are - at best - average or higher-end home loan offers. In other words, the majority of people may not qualify.
Look for the comparison rates
If you are able to find home loans that are personalised for you, you’ll want to make sure you look at the comparison rate over the advertised interest rate.
The interest rate is just that; only interest charges. The comparison rate includes the loan’s interest rate plus fees - the true cost of a home loan - so you can actually compare repayments to find the cheapest first-home loan.
Understand how home loan interest rates work
We’ve saved the best - or worst - until last: Interest Rates.
Interest is by far the biggest cost of most home loans in Australia, and understanding how rates are applied to your loan can help prevent making a poor and costly decision.
Simply, home loans generally use fixed or variable rates.
- Fixed rates stay the same for a set period of time
- Variable rates can change depending on the market
You’ll also need to know the difference between principal and interest home loans and interest-only home loans.
If you are buying your first home, chances are you’ll only consider principal and interest home loans, as interest-only loans have a higher level of risk and become very expensive.
Learn more about home loan interest rates and how they affect your repayments.
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Shaun
McGowan
Shaun McGowan
Shaun is the founder of Money.com.au and is determined to help people pay as little as possible for financial products. Through education and building world class technology. Previously Shaun co-founded CarLoans.com.au and Lend.
