First Home Buyer — Peter Jefferson. Your Finance and Mortgage Partner

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Getting into the property market is tough. That’s why you need a partner on your side.

Buying your first home is hard enough. The cost of living is increasing, and it seems like houses are more expensive than ever and increasing faster than you can save your deposit. It’s like you're going backward sometimes. It is tough when you're competing in the property market with people who are on to their 2nd and 3rd homes, and sometimes more, with lots of equity. That just doesn’t seem fair.

There is help for you that can reduce your costs and help you get into your first home a little bit faster.

One of the best ways to get started is by gaining an in-depth understanding of what’s involved. That’s where my First Home Buyer’s guide can help. This guide will step you through the entire process. From researching and Identifying your first home, to negotiating with agents and organising your finance. Or, if you're ready to buy now, feel free to get started with a finance application today!

Buying your first home is one of the biggest financial commitments you’ll make.

Looking for your home and the right home loan go hand in hand.

Getting the right advice on both is vital, especially when you are new to the property market. You’ll have some important questions and decisions to make. That’s why I have prepared the complete first home buyer’s guide to help you navigate the purchase of your new home.

It provides you with answers to questions such as:

How much will I need to save?
What government charges and other costs are involved in the purchase?
What government grants are available?
How can I best establish my borrowing capacity and what factors will impact it?
What loan and lender should I choose?
What strategies should I use to negotiate with agents, make an offer, or bid at an auction?
What happens during the settlement process?
There are also lots of helpful documents to make the job of finding your new home far easier.,

Download this vital guide today to make sure you have all the information that you need to purchase your first home.

How can you get into your first home faster?

Being aware of the help available to buy your first home is a good start. And thankfully there is some. Both the federal and state governments offer various programs you might qualify for. The federal government has its First Home Buyers Guarantee (FHBG) scheme, which helps you avoid costly Lender’s Mortgage Insurance (LMI). The various state governments have their help as well. This site will provide information on the Victorian government and its assistance and will provide links to the other states.

Besides government help, you might also want to consider what help could be available from family. This is typically in the form of close family members acting as guarantors or gifting you some money toward your home. Please read below for further information if this sounds like a solution for you.

Federal government assistance

Previously known as the First Home Deposit Scheme, the First Home Guarantee (FHBG) is a federal government scheme helping a limited number of first home buyers purchase a property with as little as a 5% deposit without paying costly Lender’s Mortgage Insurance (LMI).
The scheme is part of the federal government's suite of Home Guarantees which also includes the Family Home Guarantee for single parents, the Regional First Home Buyer Guarantee and previously included the New Home Guarantee.
LMI is insurance that banks take out to protect themselves against a borrower defaulting on their mortgage. It kicks in when the amount of the mortgage is higher than 80% of the value of the home, which is the case for most first home buyers as they are just starting out. The lender will charge the borrower for this, and depending on the size of the loan, it can add thousands of dollars to your mortgage. It is also important to remember that it is no way protects you. Only the lender. To find out more about LMI, please download my First Home Buyer’s guide.
The additional cost of the LMI is often prohibitive, dilutes your savings and adds substantially to the cost of the mortgage. So the federal government will guarantee the last 15% of your home loan, meaning you only need a 5% deposit, will avoid paying LMI and are able to access interest rates for loans below 80% LVR.
Income test
Singles with a taxable income less than $125,000, couples less than $200,000 for the previous financial year. Please note when applying for a place in this scheme, you will need to provide the relevant Notice of Assessment from the ATO for the previous financial year.
Joint applications
Prior to July 1 2023, couples could only allowed to apply if they are married or in a de-facto relationship. From 1 July 2023, any two eligible people may apply together, including friends, siblings or other family members.
Owner Occupied
You need to move into the property within six months of owning your home and continue to live in that property for so long as your home loan has a guarantee under the Scheme.
Prior Ownership
You must provide proof you have not owned or held interest in property in Australia in the past ten years. This includes commercial property, investment or company title properties.
Citizenship
Prior to 1 July 2023, applicants must be Australian Citizens, aged 18 years or over. From July 1 2023, the scheme will also be available to eligible borrowers who are Australian Permanent Residents.
The main benefit of the FHBG is providing quicker access to the property market through the removal of barriers. As this scheme allows you to buy a house with a lower deposit, you can benefit by saving time on saving up a 20% deposit and have the opportunity to purchase your first home quicker.
As well as entering the property earlier, with the FHBG you can save thousands by not paying LMI at settlement. And, as an added bonus, as LMI is usually added to your loan amount, you’ll be saving even more money on the interest you would may on LMI while it’s a part of your loan balance.
Due to varying average property prices across the states and territories, they have different caps in both the major cities and regional centers as well as rural areas.
NSW - $900,000 (Capital city/regional centre) $750,000 (Rest of State)
VIC - $800,000 and $650,0000
QLD - $700,000 and $550,000
WA - $600,000 and $450,000
TAS - $600,000 and $450,000
ACT - $750,000
NT - $600,000
Source: National Housing Finance and Investment Corporation
I will help you with everything you need to get your application for the FHBG together and we will apply directly to the recommended lender.

Victorian government assistance

Eligible first home buyers of new and existing homes in Victoria will receive a full exemption on stamp duty up to a maximum dutiable value of $600,000. That will save you tens of thousands off the price of the property.
The concession also applies on a sliding scale above $600,000 up to $750,000 where any concessions cease. The closer the value is to $600,001 the greater the concession.
For example, if the purchase of your property is $605,000, then instead of paying $31,370 in stamp duty, you will only pay $1,046. If the price is $745,000, then instead of $39,770, you will pay $38,444.
You can see how the sliding scale works. Under $600,000, you won’t pay stamp duty. Over that amount, you will pay some, depending on how close to $750,000 you come. Over $750,000 you will pay the full amount.
Please see below for eligibility criteria.
If you are constructing a new home, or buying a brand new one, and it is valued at under $750,000, you could be eligble to recieve a grant of $10,000. In Victoria this is known as the FHOG.
The property must not have been previously sold as a place of residence, occupied as a home, or leased out or used for short-term accommodation, such as Airbnb
If you are buying or building a new home, you may be eligible for the FHOG ($10,000) if you signed your contract on or after 1 July 2013.
The eligibility for the stamp duty concessions and the FHOG are similar.
To receive the FHOG, your new home must be valued at $750,000 or less and be a new home. The property must not have been previously sold as a place of residence, occupied as a home, or leased out or used for short-term accommodation, such as Airbnb.
You’re not eligible for the FHOG if you or your spouse or partner have already:
- received the FHOG in Australia
- owned a home or other residential property in Australia, either jointly or separately, prior to 1 July 2000, or
- lived in a home in Australia which either of you owned or part-owned on or after 1 July 2000 for a continuous period of at least six months.
These criteria apply even if your spouse or partner is not an applicant with you for the FHOG.
You may still be eligible for the FHOG if you or your spouse/partner purchased property on or after 1 July 2000 and have not lived there as your home.
For example, Tom bought his first property in July 2004. It was a house and Tom has always rented it out. As he has never lived there himself, this house is not considered to be his first residential home and he may be eligible for the FHOG.
In addition:
All FHOG applicants must be at least 18 years of age at settlement or completion of construction (although there is discretion).
You, or at least one applicant, must be an Australian citizen or permanent resident:
- in the case of the purchase of a new home, as at the date on which the applicant(s) become entitled to possession of the home under the contract, which generally occurs on the date of settlement,
- in the case of the entering into of a comprehensive building contract, as at the date on which the building is ready for occupation as a place of residence, which generally occurs when the construction of the home is completed.
You (or at least one applicant) must occupy the home as your primary of residence for at least 12 months, commencing within 12 months of settlement or completion of construction. Australian Defence Force personnel are exempt from this residency requirement. The exemption applies to current members of the Australian Army, Air Force or Navy who are enrolled to vote in Victorian elections and are either on duty or leave. The exemption does not apply to reservists or to Australian Public Service staff.
Anyone holding a permanent visa under s30(1) of the Migration Act 1958 is considered a permanent resident of Australia. New Zealanders holding a special category visa under s32 of the Migration Act 1958 are also eligible for the FHOG but must be physically in Australia at the time of settlement.
Established homes are no longer eligible for FHOG. However, if you are buying an established home as your first home and you meet the FHOG eligibility criteria but for the fact that it is not a new home, you may be entitled to a first-home buyer stamp duty exemption.
Anyone who will be named on the property’s title must be listed as a FHOG applicant. Importantly, you must also include your spouse or partner’s details on the application form regardless of whether they are going to be on the property’s title. Their details must be considered when answering the eligibility questions.
There is also assistance available by other state governments. To find out more, please visit the sites below.
ACT - revenue.act.gov.au
NSW - osr.nsw.gov.au
NT - revenue.nt.gov.au
QLD - osr.qld.gov.au
SA - revenuesa.gov.au
TAS - sro.tas.gov.au
WA - treasury.wa.gov.au
I will work with you and the lender to lodge the First Home Owner Grant (FHOG) application form on your behalf.

What about gifts and guarantors?

If you don't qualify for government assistance, there are other ways to buy the house you want. These may involve receiving gifts or guarantees from others. There are certain rules about how these work and what lenders will want to see in your application. You can read more about the lender requirements below.

Gifting others money to purchase a home is very common, especially between parents and children, grandparents and grandchildren, and also amongst siblings.
The key point to remember is that a lender will want to see genuine savings being built over time, which will be used as a deposit or funds to complete a sale.
Funds that are suddenly deposited into an account less than 3 months prior to a settlement will not be classed as genuine savings, but rather a gift or a loan.
If it is a gift, the lender will ask for a statutory declaration from the parties that states that the funds are a gift and will not required to be repaid. Otherwise, it will be classified as a loan, which will need to be factored into the servicing calculations. This will reduce your borrowing capacity.
Some first home buyers might consider using parents and close relatives to act as a guarantors for their loan.
It’s an option that can help you get into your first home sooner – but it also brings considerable responsibilities and risks.
Many lenders will allow a related third party to provide additional security to help a family member buy their own home – known as a guarantor. This is different to being a co-applicant or co-signer.
A co-applicant will be included on the loan and will be responsible for the entire loan until such time as it is repaid in full.
A guarantor, on the other hand, is linked to a loan by a guarantee for the security. Guarantors are generally limited to immediate family members, such as parents, but it can include siblings and grandparents.
Some lenders will allow extended family members and even ex-spouses to be a guarantor to a loan, but this varies depending on the lender.
Guarantors are especially useful if you only have a small deposit, as providing a guarantor can potentially mean avoiding or reducing the cost of LMI.
However, you will still need to be able to service the entire loan amount to be approved.
And, should anything happen to your ability to repay and you default, then the guarantor becomes liable for the remaining debt.
Anyone considering being a guarantor for a property loan is advised to seek independent legal and financial advice before accepting the role. In fact, most lenders will insist on this, prior to accepting a guarantee.

You’ll be pleased to know that our home loan service comes at no cost to you.

As part of the service I offer, I’ll meet with you to understand your needs and compare hundreds of loans from over 35 quality lenders. I’ll also complete the application, take care of the legwork and keep you updated as it progresses to approval and settlement. I’m here to guide you through the entire home loan process, every step of the way.

The lenders pay me after your loan settles. I am paid the same rate regardless of which home loan you choose from our panel of lenders. This means that I am completely unbiased and you can be sure that what matters most to me is the home loan that’s right for you.

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Disclaimer: Interest rate associated with Auswide Bank Ltd | Basic Home Loan | OO | minimum loan size: $50,000. Further conditions, fees and charges may apply.

Everything you need to know about buying your first home.