Saving

Getting real about home-buying costs

Top of the list of things you’re paying for as a first-home buyer is the property itself (of course). But there are a few other reasons to whip out your spreadsheet or jump on to the ING buying costs calculator – you’re going to want to budget for some of the other costs before you bid or buy.

What your calculator spits out will indicate how much you’ll need to save for your first home on top of your deposit. And it could also affect how much you can afford to pay for the property, since you’ll need to take into account the other costs involved (like stamp duty, conveyancing costs and a strata report, if applicable).

So, what are all these costs? Let’s dig into the main ones that come with buying your first home.

The deposit

Ah! The thing all first-time buyers work towards. It’s kind of a big deal, but how much do you really need for a deposit? To start figuring it out, you need a ballpark idea of the price of the property you’re hoping to buy. Got that number? Okay. Your savings goal should start at 5% of that.

But that’s kind of the baseline. Most advice you get will recommend 20% as the magic number for a deposit. With a more substantial deposit like this, you won’t have to borrow as much or pay lenders mortgage insurance (LMI). More on LMI in a sec. But saving 20% isn’t realistic for many of us, so don’t stress too much if you’re aiming for 5% – or something in the middle.

Stamp duty

Stamp duty is a government tax that is usually the biggest upfront cost you’ll have to pay when you’re buying a home. It can run into the tens of thousands of dollars. For most home buyers, stamp duty is unavoidable, but you might be eligible for a discount or an exemption, depending on your State and the type and price of the property. If you can’t afford both a 20% deposit and stamp duty, your lender might increase your loan to let you pay a smaller deposit so that you can put your money towards covering the stamp duty. But if you buy a home with a smaller deposit (say, 5%), the lender will likely also require you to pay for LMI, so keep that in mind (can be a one off payment upfront or paid off in installments). Check out our stamp duty calculator to get an idea of what you might have to pay.

Conveyancer or solicitor fees

Unless you’re experienced in the game, you’re going to enlist the help of a conveyancer or solicitor to prepare documents for you to sign and to complete the settlement on your new home. Generally, a conveyancer (a professional with detailed knowledge of property law, but not a lawyer) is cheaper than hiring a solicitor with specific experience in property law. It’s a good idea to shop around to find someone you’re happy with. Ask for a quote upfront, compare your shortlist and then narrow down your options.

Pre-purchase inspections

You want to make sure your first home is exactly what you fell in love with when you first saw it. Before committing to buy, it’s wise to do various inspections, like getting a building inspector to check for structural integrity or other issues with the building and a pest inspector to look for evidence of termites or other pesky pests – especially if the home has plenty of history. There will sometimes be a pre-auction report that includes this handy info (grab this from the real estate agent), or you can organise your own.

If you’re going for an apartment or townhouse, get your hands on a strata report. This will give you the lowdown on all the body corporate business, like how the building is managed, any maintenance issues, any by-law bothers – and even the goss on your future neighbours’ stinky bins.

Lenders mortgage insurance (LMI)

LMI is something you’ll have to pay if you need to borrow more than 80% of the property’s value. It is calculated by your lender and depends on both how much you borrow and the size of your deposit. If you haven’t factored it in, don’t worry: many lenders let you add it on to your home loan, but it still pays to know what you’re up for. If you do add LMI to your loan, here’s an FYI: you’ll pay interest on any cost you add to your home loan, like LMI, for the term of the loan. Adding a cost like LMI to your loan also means you’ll be contributing less of your loan amount to the price of the property.

Bank (or lender) fees

Interest isn’t the only additional cost you’ll be paying on your home loan – there are bank fees (sometimes known as lender fees) to account for too. You’ll likely front up an application fee when you get started, plus there may be ongoing monthly or annual fees on your home loan – just like the ones you might’ve experienced with most bank or credit card accounts. These are the common fees, but every bank or lender is a little different.

Home insurance

To protect your happy home and possessions, you’ll want to get insurance. If you’re in a strata arrangement, generally speaking your building is insured and insurance is organised by the strata. Premiums are paid for through your strata levies. It’s a good idea to make sure you check what is covered under the strata policy itself. Getting both home and contents insurance is always a good idea. The ‘home’ part covers the building itself, like if the roof flies off in a storm or a tree falls on the shed. The ‘contents’ part covers your belongings in case a burglar fancies taking your stuff.

The property is yours from the moment of settlement, so get your insurance sorted by then, even if you’re not moving in for a while. (By the way, we offer both these types of insurance, so feel free to browse your options with us.)

Moving costs

If you’re going to be living in the property you buy – as opposed to renting it out as an investment – and you don’t have a bunch of burly mates to give you a hand with boxes, you’ll need to factor in the cost of removalists. Do you have to buy furniture or appliances for the new place too? All these costs should get a line in your budget to help you plan for every possibility.

Saving

Five tips to boost your first-home savings

If you’re ready to turn your dream of owning your first home into reality, there are so many little and big money changes you can make that can help boost your savings. Moving back in with the folks, dining out less, starting a side hustle – the choices are yours and we’re just here to help you along the way. So once you’ve identified and planned for your home deposit, here are the next five steps to kickstart your way to success. After all, the sooner you’re ready to make your move, the sooner your new lifestyle begins.

Step 1: Incoming… new ways to earn money

Incomes are a lot less flexible than expenses – and don’t we know it. So let’s get this one pinned down first. Here are three top ways to help boost your income.

• Additional part-time or casual work. The gig workforce is a large and respected part of the economy. Think about whether you’re able to take on jobs during any hours you don’t usually work, such as housekeeping, security or front desk for a hotel chain.
• Extra hours. We know – we’re stating the obvious here, and it mightn’t work for you. But if it’s doable, taking on extra days or paid overtime within your existing workplace could earn you a significant jump in your regular pay.
• Freelance. The skills you use in everyday life or your day job could earn you extra money through a side hustle. People will often pay higher rates for freelance expertise in areas like social media management, or for one-off tasks through a task finder app.

Step 2: Outgoing… keeping track of your spending

This step is all about your expenses and spending habits. And it has the most potential to boost your savings (that’s what we like to hear). Here are three top tips to reduce your spending.

• Knowledge is power. Detail all your spending. You could use an online tool like our budget calculator or a money-tracking app, or you could just add notes to your phone. It’s a good habit to note down spending as it happens.
• Arrange your spending into three categories: essential, necessary and optional. Rent, bills and loan payments are examples of essential spending. Transport, food and clothing are necessary – but still have some wriggle room. And optional spending is everything else because, well, it’s optional.
• It’s all about you and your choices. Only you can decide where you want to make changes. Even small differences, such as making your lunch or buying one less coffee a day, will soon add up. Then things like holidaying at home or dining out less can give you more significant opportunities to save.

Step 3: Balancing the budget, your way

Let’s be clear: budgeting is not a dirty word. It basically means: the choice is yours. The more you’re aware of your income and your spending, the more options you have. Here are three easy budget strategies you can start today.

• The ‘ten per cent’ rule. This is one of the simplest methods. You set things up so that ten per cent of your income is automatically deducted from your wages straight into a savings account (if you’re an ING customer, this could be a dedicated Savings Maximiser account that you’ve nicknamed something like ‘My first home’). You never ever think about this money again. It does not exist. The remaining 90 per cent is what you live on. Even in the months where your bills are biggest, you’ll still have your invisible 10 per cent bubbling along in its own special account.
• The 50/30/20 rule. A budget strategy originally designed for more detail-oriented savers but one that’s easy to remember. Fifty per cent of your income goes to ‘needs’, 30 percent to ‘wants’ and 20 per cent to ‘savings’.
• The $5 rule. Every time you buy something online, pay a bill or open your wallet to pay for brunch, transfer an extra $5 to your savings account. You’ll soon see your savings grow – or your spending reduce! (Psst: If you’re an ING Orange Everyday customer, you can turn on Everyday Round Up and we’ll automatically round up your purchases to the nearest $1 or $5 and pop the difference from your Orange Everyday account straight into your Savings Maximiser account. Easy-peasy.)

Step 4: Reaching your savings goal

Let’s get real. The best goals are achievable – not something forever dangling out of reach. Being too ambitious can often set you up to fail. We think saving for your first home should be positive and motivating (it’s your dream, after all!). Here are three top tips to keep your goal achievable and your motivation strong.

• Plan for the unexpected. One-off expenses or unforeseen hiccups might temporarily rock your plans. Builders, for example, like to plan at least a 5 to 10 per cent contingency to allow for the unknown.
• Plan for joy. Semi-regular treats are important. If your ‘joy’ is weekends away or concerts or footy trips, include (at least) one of these events in your calculations.
• Plan for success. Saving is a choice you’re making to achieve your goal. Even if you have to extend your timeline or miss a few weeks, always remember you’re still heading towards your goal.

Step 5: Tracking your success

Accountability. Ugh, a scary word. But having an accountability plan can help you achieve your goal. It works by having someone or something to keep you on track. Here are our three top tips to help keep on track.

• An accountability partner can be a friend, family member or professional. Someone you can regularly check in with to talk about your progress and any adjustments you might need to make.
• Break down your long-term savings goal into smaller chunks, and set target dates to achieve each of these progress steps. You might even want to try an online tool like our savings goal calculator to work out how much you could put away each month for a year, for example.
• See it, do it. Keep a visual reminder handy – on the fridge, your desk or inside the front door. This could be a wall calendar with targets and rewards dates, a picture of your dream house, or a pie chart or graph you colour in as you progress. Seeing is believing.

It doesn’t matter how many years away you are from your deposit target for your first home: making savings-boosting changes, when you can, will help get you through your new front door sooner. Dream: achieved.

Saving

Our five-step guide to owning your own home

Hey, what do you want? Like, really, really want? If you’re similar to a lot of young Australians, you might want to own your own home (psst – this could be a great wealth-building idea as well as a lifestyle decision). But where do you start? What do you do first? We’ve got you covered. So take five – steps, that is – along your new path towards your first home.

Step 1: Dreams come in all shapes and sizes

Think about the type of home you want and where you’d like to live. Go on, dream a lot, not just a little. Without this important ‘thinking step’, it can be harder to reach your goal. After all, if you don’t know what you want, how will you ever get it? Of course, we don’t mean the street or the apartment number (or maybe some of you already have these in mind). But picture the property type and location of your first home, one that’s going to suit your lifestyle and values. Relax, nothing is being locked in! You’re just planning at this stage.

Step 2: Gather your intel. Be a step ahead of the rest

Scan the real estate advertisements and sales results for the neighbourhoods you like (and keep a watch on adjacent areas). This’ll give you more insight about prices for the various types of homes and locations. Introduce yourself to a couple of local real estate agents to get an even deeper understanding of prices, trends and little quirks of the ‘hoods’ you’re considering. Local agents are a great way to learn what you can get for your money. Work out how much you may be able to borrow based on your income and expenses with our online borrowing power calculator.

Step 3: Ready, set, goal! Set your savings target

Now that you’ve got a price range, it’s time to set your savings goal. Now is a good time to learn more about LMI and how much your loan repayments might be depending on your deposit amount.

Speak to a lender and understand how much LMI you might have to pay and decide if you’re comfortable paying for this. If you are, it could mean your savings target for a deposit is 5% or 10%. If you decide LMI isn’t for you, you’ll most likely need a deposit of 20%.

Use our online repayment calculator to estimate how much your repayments might differ if you have a smaller or larger deposit amount.

Doing both of these things will help you decide on your savings goal

Step 4: Budget – your way. Find out your savings ability

Great, you’re on a roll. Now let’s plan to reach that savings target. Warning! This step is a lot less exciting than browsing real estate ads, swanning through home inspections and visualising your new lifestyle. It’s about finding out how much you earn and how much you spend – and we mean really spend, not just what you think you spend. Yep, you guessed it: it’s budget time. Get out the spreadsheets, notebooks, bank statements or online budgeting tools (like our budget calculator) and make a list of all your expenses and all your income.

Now is also a good time to set up a dedicated savings account for your deposit. If you’re an ING customer, you can open a Savings Maximiser and call it something like ‘My first home’ or ‘#HouseGoals’. Don’t be shy – get personal with it! A strong nickname will help your goal stay at the front of your mind every time you make a deposit.

Step 5: Mind the gap. Estimate your savings journey

Congratulations! You really are on the home straight (pun intended). The gap between your income and what you spend is your savings ability – and it’s going to be the backbone of your savings plan. Let’s say you have $200 left over each week, or perhaps $1,000 a month. Divide your estimated deposit by your savings ability and, hey presto! This gives you the number of weeks or months it’ll take to achieve your deposit. (Psst: if online tools are your thing, you could also try plugging the numbers into our savings goal calculator.) Fist bump! You’ve successfully identified and planned your home deposit savings goal.

But, hang about, just a last word. Don’t be disappointed if you find your savings ability is smaller than expected or that it may take longer than hoped to reach your goal. This knowledge is power! These first five steps not only give you a goal and a plan but can also help you set your values and priorities. Can you reduce your expenses? Can you increase your income? Or can you look in a different price range? Being prepared for these choices puts you a step ahead of most savers. And don’t worry, we can help with that, too. We have plenty of tips and suggestions to help boost your savings and fast-track your first home deposit goal.

For now, however, sit back and relax. You’re on your way. By following these five steps, you’ve laid the floorplan, the foundations and the building blocks (okay, too many home-related puns) for your journey towards your first home.

Saving

We’re getting on the property ladder unconventionally. Here’s how

The ‘great Australian dream’ doesn’t necessarily mean a three-bedroom house on a quarter-acre block with two kids and a doggo anymore. Your dream probably looks different. It probably doesn’t look anything like your best mate’s, either. It might involve country-hopping every five years, or heading bush to live near your favourite hiking tracks, or laying the slab of a communal place to share with family. But if your dream includes planting a foot on the property ladder at some point, it might be worth thinking outside the two-car garage. There are so many ways to buy a first home, and going non-traditional could be more affordable and (here’s the best part) give you the flexibility you need to create the lifestyle you’re living for.

We talked to a few people who are making their Australian property dreams happen unconventionally – and a couple of others who work in fields that help make unconventional first-home dreams come true.

Sophie joined (property) forces with her partner and brother

Describe the unconventional home you’ve bought together.

It’s a charming 1970s brick veneer in Rye on Victoria’s Mornington Peninsula. We went all in. It’s 750 metres from the Rye foreshore, so we saw it as a great opportunity.

How did you go about buying it?

My brother and I had always talked about buying a place together. My partner was also interested in buying a house. We were all just thinking, “How on earth are we gonna get into the property market?” Then my dad suggested that the three of us should join forces and look at it as a two-year plan to do up a property. The idea was that after we renovated we might sell it and the three of us could walk away with our own home deposits.

How did you plan your saving to make it happen?

We started by moving down from the city to Rye and renting because the rent was so expensive in the city. We got all set up with a joint account that we all contributed to. Each month, all of our home loan repayments and everything came out of that.

How did it feel when you finally took the plunge?

It was really exciting, but a little scary. It kind of felt like playing Monopoly. Now we’re living in it and enjoying it. Living by the beach – we love the lifestyle down here. It’s like living on The Block. It’s allowed us to work more together as a team, or as a collective. We sometimes call meetings when we’re having dinner and talk about what we want to do with the house. It’s motivating because it keeps us on track with our goals.

Laura Phillips, head of editorial and urban advocacy at socially responsible developers Hip V. Hype, tells us about collaborative property development

First, what is a collaborative development model and how does it work?

It’s all about people coming together with the intention of living in a place they helped create themselves with a group of like-minded people. Together, they can have an intimate understanding and influence over the whole process. After all, it’s more likely that people will invest a lot more time, money and love into the process if they know they’re going to be living there.

What are the main reasons first-home buyers might take a collaborative, collective approach to getting on the property ladder, instead of going in alone?

It’s individual. For some members of Melbourne’s Davison Collaborative project, for example, it was about being priced out, and that the quality of houses available at their price point was usually poor. It’s a way to try and control the costs and do things on their own terms. Collaborating on home ownership is becoming an option for people who want to come together with friends to try and consolidate costs and do something in the spirit of a shared way of living.

What does a collective approach mean for the residents’ lifestyle?

It creates the opportunity to design something that is unique to the inhabitants and suits their tastes. A space they love. It also helps people create a truly high performance and sustainable home.

Penny and Stuart bought a mixed-use property by private sale

Tell us about the unconventional home you’ve bought.

Penny: It’s an apartment in a ’50s warehouse that was divided up in the ’90s. The home is mixed-use, so currently there’s a commercial tenant running their architecture business from the space. We can’t void the lease, and they can choose to renew for three more years or move out at the end of their term. So we aren’t able to move in straight away, but the benefit is that the tenant is essentially helping to pay our mortgage – so we can save some money to do what we want when they move out, like a new kitchen. When buying a tenanted property, seek guidance from your conveynancer/solicitor as there be additional considerations.

Tell us how you went about buying it.

Penny: We’d actually written off the idea of living in the warehouse after we narrowly missed out on another property in the building. But then Stuart wrote to the body corporate, saying, “Hey, we’re really interested in this building. Please let us know if anyone else is selling.” A little while later, a woman called us. We started communicating directly and organised a private sale with her.

How did you budget to make it all happen?

Penny: Both of us have, career-wise, lived reasonably precariously. We’ve done creative work that has been rewarding but foolish financially. So we didn’t look too good to the bank. We had loads of debt but we worked hard to pay it off. Then, in just a year of not having to pay that money back anymore, we were able to save because we were used to the saving schedule. I took a second job teaching university at night and we cut back on food deliveries, despite being so busy. We were still living on a tight budget, which was fine, but suddenly, with all that saving and with a small inheritance of about $20K, we were like, “Okay! We can do a deposit.”

Do you have any advice for someone buying a home in an unconventional way?

Penny: It doesn’t matter when you confront your debt, but whenever you do it is a good moment. And if you have a little bit of money, it’s all about realising how you can be smart with it. Also, ask yourself: “What’s the big dream?”

Stuart: I’m just proud that we did it this way without real estate people. It was calm, respectful and mutually beneficial. We’ve enabled our tenant to do their thing and us to do our thing and get into this beautiful house.

Darren Hughes, founder of the Tiny Houses Australia Facebook page, tells us about the tiny (and growing) movement

How did you become interested in the tiny house movement?

My partner and I have been around the tiny house community for the past seven years or so. We started experiencing life in small spaces by living in a 1974 vintage caravan for over a year.

What are your own tiny house plans?

We’re working towards our own tiny house. We’d like to have a bit of land here in Victoria and another in northern New South Wales so we can flip between. With two blocks of land with two tiny houses, the other tiny house could be rented out when we’re living in one.

What are the motivators behind the tiny house movement?

First, cost. The average house price in Australia is a lot of money for most of us. And that’s not for your dream house. That’s for a place that probably needs work. And that’s an enormous amount of financial pressure on a single person or even a couple. Second, I think it’s freedom, simplification, getting rid of all the stuff that you don’t need. Life is so much freer, you feel alive, you’re not stressed about all your stuff.

Any stories of people making a tiny house their first home?

I know people who have built tiny houses that have never owned a house before. They’ve spent years and years renting and then decided to go down the route of tiny houses. In fact, a school student in Queensland decided to build himself a tiny house for a school project. He did it from recycled, up-cycled and found materials. He had some help, but at the end of the day, he’s just out of high school and finished his own home.

Do you have any advice for someone buying a home in an unconventional way?

Think about your home – tiny houses included – as the tool you can use to design the life and the lifestyle that you want. We should only be going through life with the things and the people we love and get joy out of, rather than carrying all this clutter. When we do that, we end up with less stress, less debt, and we’re overall happier and healthier because of it. It’s always best to speak to your lender when considering a home purchase to make sure they can lend to you for an uconventianal home (or any home before you make a decision).

Saving

How I did it: making my first-home dream come true

So much happens between that “I want a place to call my own” lightbulb moment and actually taking the plunge. Planning, working hard, saving harder, learning the difference between LVR and LMI, picturing your dream – even changing your mind about what your dream might be.

We had a chat with a few young Australians who told us how they turned a plan to buy into owning their dream home – and how they managed their money along the way.

Lucy, 35, and Patrick, 37

“Our decision to buy came about through the slow realisation that this thing that had always felt unattainable might be within our reach.”

“One of the best things we did was rearrange our finances so that one income went into a spending account and one income went into a savings account. So one income had to cover rent, bills, food, socialising, everything. The other income we didn’t even see so theoretically never spent.”

“At first we were sceptical. How on earth were we going to get by on basically half the money we were used to spending? But once you get into the swing of things it’s actually not too bad. You don’t have to think about it.”

“We separated our money into a ‘bills and rent’ account, an everyday joint account, and then a separate account for each of us with money to spend how we wished. It wasn’t a huge amount, but having a little bit of our own money was important for a sense of independence and spontaneity.”

“Set up a system that works for you, that’s achievable and incremental, and then just get on with your life. If you’re able to create a set-and-forget system, it’ll come together without too much frustration or impatience.”

“It feels so great to know that the monthly payments we’re making are towards our own future. We can paint a wall if we want, and we’ll never have to worry about a notice to vacate or a grumpy landlord ever again.”

Charlie, 30, and Melissa, 29

“For us, a home seemed so unobtainable. When we bought, the property market was hot. But it was a sudden moment when we realised that we were on the way to having close to enough saved to get it done.”

“We were just talking about it one day – that we should probably try and buy somewhere if we can. So we sought out expert advice and set up a savings path to our goal of 20 per cent for a deposit.”

“To start, we had a spreadsheet where all of our monthly expenses were laid out. It was shocking to see how much we were spending on things like nights out or entertainment, all that kind of stuff.”

“So we looked at changes we could make and created a budget to reduce costs. Like, for groceries, we would allocate $200 at the start of the month and try to stick to it. We had the spreadsheet to track everyday costs and we stripped back on luxuries where we could. But we weren’t roughing it, by any measure.”

“Once we started budgeting, it became second nature. We became more aware when we were buying things – like, we would ask ourselves, ‘Do we really need this?’”

“We were also looking to buy in the same year we planned to get married, so we had a wedding to budget for too. It got a bit stressful once we got closer to the wedding, which we had to push out a bit. So with big life events, we would recommend focusing on one at a time!”

“But when we finally bought and moved in, it felt kind of surreal. It was our home.”

Jenna, 34

“I had saved a decent amount of money myself when my brother asked me if I’d like to go halves in buying a house with him. I looked at my finances and realised I could afford it, so I agreed and we put in an offer.”

“I’ve always been a saver, squirrelling money away in savings accounts. My parents taught me to save, so it comes naturally. From the time that I started my first job in a supermarket, I’ve always done it. It’s simply a habit that when I get paid, I transfer money into a savings account that I don’t touch.”

“To save for the house deposit, my budgeting technique was pretty simple. Every week I gave myself an allocation for weekly expenses – including going out for dinner or buying something new. Then every single other dollar of my income would go into my savings.”

“I stuck to these rules (and I still do). I don’t buy anything that I don’t have cash for. If I buy something with my credit card, I pay it off immediately. I never use a ‘buy now, pay later’ service. If I want something, I won’t buy it until I have enough money. I’m pretty strict with my ongoing long-term savings account, too – I don’t touch it.”

“Be strict with your budget, cut up your credit cards if you need, and don’t buy anything that you can’t afford while you’re saving. Oh, and shop your wardrobe: rethink the need to buy a new outfit for every event that you attend. Instead, mix and match pieces that you already own.”

“I’m so happy that I jumped in and agreed to buy with my brother. While it can be a hit to the ego to check your bank balance and see that the money you had saved has gone, you have a house to show for it! It’s really not as daunting as it seems.”

Saving

Buying your first home? Our guide to keeping your eyes on the prize

Buying your first home is a big step and a whole lot more complicated than buying a flat-pack bookcase. And just like many other big steps in life, and unlike a flat-pack bookcase, it doesn’t come with instructions – and everyone reaches the finish line in their own way. But it’s cool, we’re here to help. Read on as we go through the major milestones you’ll likely reach along the way to getting through your new front door.

Devoting yourself to a deposit

What’s the first thing to think about once you’ve decided to buy a house? How you’ll start saving. What’s the next thing to think about? How you’ll keep saving. That all-important deposit won’t grow by itself. So how and when do you know you’ve got enough? It depends on how much the home you want is and how much you can borrow. In percentage terms, generally you can choose 5% and upwards. Though keep in mind if you have under 20% deposit you’ll probably need to pay for lenders mortgage insurance (or LMI, for short) or go with a guarantor (someone who ‘guarantees’ they’ll pay back the loan if you can’t). It’s actually all about loan-to-value ratio (LVR), which is basically the amount you are borrowing written as a percentage of the property value. The bigger your deposit, the smaller your LVR (which means there’s lower risk for your lender). Having a 20 per cent deposit, or an LVR of 80 per cent, could help you avoid extra costs like LMI, but you can still make it work with less.

Finding out how much you can borrow (and repay)

It’s a question as old as time. Try out online tools like our borrowing power calculator and our home loan repayments calculator to find out an estimate of what you’re in for. For example, the repayments calculator lets you put in and adjust your loan amount, loan period, loan type, interest rate, repayment type and frequency, and then it spits out your estimated monthly repayments. (Psst: if you want an extra hand understanding all the different loan types and lingo, check out our home loan comparison or call our home loan specialists on 1800 100 258.) Bonus tip: how much you can borrow may not equate with how much you should borrow. Make sure your repayments are realistic and consider any contingencies, like if your income is reduced, to give yourself a financial buffer.

Knowing what you want. What you really, really want

You’ve likely been doing this since the dream of owning your own home was just a twinkle in your eye, but it’s a good idea to make a list of all that you’re looking for in a first home, and break it in two: the must-haves and the (kinda optional, can-compromise) wants. Then search online for homes that fit your criteria – the right location, size and property type to create the lifestyle you’re dreaming of, for a start. Consider things like schools for the kids (if they’re a part of your plan) or access to public transport or bike paths. Then head along to openings and auctions and chat with the agent to gather as much information as you can. You’ll learn about things that might influence price, and as you watch different properties over time you might see prices rising or falling. You could even start to recognise when a home is particularly good value, so you’ll know exactly when to pounce.

Being honest about upfront costs

Deposit? Saved. Loan? Calculated. Apart from monthly repayments when your mortgage starts, that’s it for the money stuff, right? Nope. Even when you’re planning your deposit, you’ll need to factor in costs like stamp duty (a government tax you pay on a property purchase) and conveyancing/solicitor fees for a conveyancer/solicitor who’ll help with all the legal bits of transferring the property from the former owner to you. Plus there might be other costs and fees like council rates, a building inspection, repairs – even a removalist to move all of your things. You usually need to pay these costs upfront, so think about whether you’ll subtract them from your deposit target or save for them separately. And don’t forget to budget for ongoing home and contents insurance to protect your new pad.

Going for a grant

Take a look to see if you can get your hands on the first home owner grant, a one-off payment for eligible first-home buyers who buy or build a residential property. Eligibility criteria differs across Australian states and territories, but if you can get it, it could take a nice little chunk out of your loan. Talk with your lender to find out more about it.

Getting pre-approval on the right loan for you

When the right home comes along, you don’t want anything getting in your way. One way to help make sure you’re ready to kick into gear is to get home loan pre-approval from your bank (they’re normally valid for 3 months, but check with your lender). While it isn’t final approval, it does mean the lender has agreed in principle to lend you the money. And it can help you house-hunt with confidence because you’ll know you’ve got a particular price to stick to. It also shows real estate agents that you’re the real deal.

Training for auctions and private sales

You’ve been buzzing all over your favourite neighbourhoods looking at properties. You’ve made a list of must-haves and wants, set your budget and have pre-approval for a loan. You might have had a taste of auctions and private sales too, but are you prepared for the edge-of-your-seat tension and excitement of it all? Both have their pros and cons, so we’ve got a few tips to help you decide which type of sale you might prefer.

Number one: remind yourself to stick to your budget. When it comes to learning how to bid at auctions, get a taste of the process by standing on the sidelines and taking notes. Auctions tend to fire up people and prices, so prepare for extra stress (or excitement, if you’re into it). With a private sale, the stress is less, and the cost to the seller may be lower, so it could be a better value buy for you. Prepare yourself for some negotiation to find the price sweet spot. Most importantly, no matter what type of sale you go for, only make a decision that you’re comfortable with.

Settling on – and into – your new home (woohoo!)

Here’s the best bit. You’ve found your dream first home! Congratulations. Your offer has been accepted and you’ve applied for full loan approval from your lender. Before you move in, you’ll be getting into the nitty-gritty of settlement territory – expect a whole lot of document signing and other administrative things like conveyancing, valuation and a final inspection. But what’s at the end? Holding your new home’s keys in your hand. Pop that bubbly and toast your new lifestyle.