The Complete First Home Buyer Guide: From Deposit to Settlement
Buying your first home is really a sequence of smaller decisions: how much to save, which grants to claim, when to get pre-approved, how to make an offer and what happens between signing a contract and picking up the keys. This guide walks through the whole journey in the order it actually happens, with Australian rules and real costs front of mind.
Step 1: Work out your deposit
Most Australian lenders will lend up to around 95% of a property's value, which means a deposit of at least 5% plus enough on top to cover purchase costs. If your deposit is under 20%, you will usually pay lenders mortgage insurance (LMI) — a one-off premium that protects the lender, not you, if you default. The bigger your deposit, the smaller the premium and the more lenders you can choose from.
Lenders also care about where the money came from. Many want to see genuine savings — typically around 5% of the purchase price held or built up over at least three months. A consistent rental history or gifted funds from family can help in some cases, but policies vary between lenders. Start a dedicated savings account early, contribute regularly, and avoid large unexplained transfers in the months before you apply.
Step 2: Line up grants, schemes and duty concessions
Government help for first home buyers falls into three buckets. First, state grants: most states pay a First Home Owner Grant for new builds, with rules that differ by state — see our guides to first home buyer grants in [NSW](/articles/first-home-buyers/first-home-buyer-grants-nsw), [Victoria](/articles/first-home-buyers/first-home-buyer-grants-vic), [Queensland](/articles/first-home-buyers/first-home-buyer-grants-qld) and [Western Australia](/articles/first-home-buyers/first-home-buyer-grants-wa). Second, transfer duty (stamp duty) concessions: most states waive or discount duty for first home buyers under certain price caps, and for many buyers this is the single most valuable concession available. Third, the federal Home Guarantee Scheme, where Housing Australia guarantees part of your loan so eligible buyers can purchase with a smaller deposit and no LMI.
Price caps, income thresholds and eligibility rules change regularly. As at July 2026, always confirm the current settings with your state revenue office and [Housing Australia](https://www.housingaustralia.gov.au) before you build them into your budget.
Step 3: Get pre-approved before you shop
Pre-approval (also called conditional approval) is a lender's in-principle statement of how much it is prepared to lend you, based on your income, expenses, debts and deposit. It sets your realistic price range, shows agents you are a serious buyer, and lets you make offers with more confidence. It is not a guarantee — formal approval still depends on the specific property and on your circumstances not changing.
Most pre-approvals last three to six months. Gather your payslips, bank statements and identification early, and avoid taking on new debt like a car loan or an extra credit card while you are house hunting, because every new commitment shrinks your borrowing power.
Step 4: Find a property and make an offer
Properties in Australia sell by private treaty (a negotiated offer) or auction. With private treaty you can usually make your offer subject to finance and a building and pest inspection, and most states give you a short cooling-off period after exchange. At auction there is no cooling-off period and no finance clause — you pay the deposit and exchange contracts on the day — so your finance, inspections and contract review must all be done beforehand.
Either way, have a conveyancer or solicitor review the contract before you sign, and order a building and pest inspection so you know what you are buying. A few hundred dollars spent on due diligence is cheap insurance against a structural problem you cannot see.
A 15-minute chat is usually enough to map your options — free, no obligation.
Step 5: From contract to unconditional approval
Once you have a signed contract, send it to your broker or lender straight away. The lender orders a valuation of the property, completes its verification and, if everything checks out, issues formal (unconditional) approval. If you bought subject to finance, this needs to happen before the finance clause expires — ask for an extension early if the lender is running slowly.
After formal approval you will receive loan documents to sign. Read them carefully, return them promptly, and confirm your conveyancer has everything needed to book settlement.
Step 6: Settlement day and getting the keys
Settlement usually happens 30 to 90 days after contracts are exchanged, depending on your state and what was negotiated. Your conveyancer, the lender and the seller's side complete it — mostly electronically these days. On the day, the lender draws down your loan, the balance of the purchase price is paid, transfer duty is settled and the title transfers into your name. Do a final inspection in the days before settlement to confirm the property is in the condition you agreed to, then collect the keys from the agent once settlement is confirmed.
Costs beyond the deposit
Budget for these on top of your deposit so nothing surprises you at settlement:
- Transfer duty (stamp duty), unless you qualify for a first home buyer concession — estimate it with our [stamp duty calculator](/calculators/stamp-duty)
- LMI if you are borrowing more than 80% of the property's value
- Conveyancing and legal fees
- Building and pest inspection reports
- Lender application, valuation and settlement fees, plus government registration fees
- Home and contents insurance, moving costs, and adjustments for council rates and water
Talk it through with a broker
Every first home purchase involves a different mix of deposit, grants and lender policy, and the right structure depends on your situation. If you would like help mapping out your own path from deposit to keys, [get in touch](/contact) — straight answers, no obligation.
Frequently asked questions
How much deposit do I need to buy my first home in Australia?
Most lenders accept a deposit as small as 5% of the purchase price, plus extra to cover costs like transfer duty and legal fees. With less than 20% you will usually pay lenders mortgage insurance, unless you qualify for the Home Guarantee Scheme, an LMI waiver or a guarantor arrangement. A 20% deposit avoids LMI entirely and opens up more lenders.
What grants can first home buyers get?
Most states pay a First Home Owner Grant for new builds and offer transfer duty concessions or exemptions under certain price caps. The federal Home Guarantee Scheme can also let you buy with a small deposit and no LMI. Rules and caps differ by state and change often, so confirm current settings with your state revenue office and Housing Australia.
Should I get pre-approval before looking at properties?
Yes. Pre-approval tells you your realistic price range before you fall in love with something you cannot afford, and it signals to agents that you are ready to buy. It typically lasts three to six months, and it is close to essential if you plan to bid at auction, where there is no finance clause.
How long does it take to buy a first home?
Once you find a property, the contract-to-settlement period is usually 30 to 90 days depending on your state and what you negotiate. Before that, allow a couple of weeks for pre-approval and however long your property search takes. Saving the deposit is typically the longest part of the whole journey.
What happens if my loan is not approved before the finance deadline?
If you bought subject to finance, contact your conveyancer before the deadline and request an extension — sellers often agree rather than restart the sale. If finance is ultimately declined, the clause lets you withdraw from the contract without losing your deposit. Never let a finance deadline pass silently, because the contract can become unconditional by default.