Expert Broker Support

Your complete guide to buying your first home with confidence

Buying your first home is one of life’s biggest milestones—exciting but also daunting. With rising property prices across Sydney, complex lending criteria, and countless loan options, first home buyers face significant challenges.

That’s where we come in. As specialist first home buyer mortgage brokers in North Strathfield, we guide you through every step of the home buying process, from understanding how much you can borrow to securing the keys to your new home.

Ready to start your home ownership journey?
Call 02 7904 9560 or email hello@awesomelendingsolutions.com.au for a free consultation.

Why First Home Buyers Need Specialist Support

The home loan process is completely foreign when you’re buying for the first time. Common challenges include:

• Confusion about borrowing capacity – How much can you actually borrow?
• Deposit requirements – How much do you need and where should it come from?
• Government grants and schemes – What assistance are you eligible for?
• Loan options – Which features matter and which are just marketing?
• Pre-approval timing – When should you apply?
• Application complexity – What documents do lenders need?
• Property purchase timing – Coordinating finance with settlement dates

We remove the confusion and stress by explaining everything in plain English and handling the complexities for you.

How Much Can First Home Buyers Borrow?

Your borrowing capacity depends on several factors:

Income Assessment

Lenders assess your gross income including:

• Base salary or wages
• Regular overtime (usually 80-100% if consistent over 6+ months)
• Bonuses (typically 80% if regular)
• Commission income (varies by lender)
• Rental income from investment properties (if applicable)
• Government benefits (some lenders accept Family Tax Benefits)

Serviceability calculation: Lenders ensure your income comfortably covers loan repayments plus living expenses, with a buffer for interest rate increases.

Expenses and Liabilities

Lenders deduct your monthly expenses:

• Existing debts (personal loans, car loans)
• Credit card limits (even if not used—they assess the full limit)
• HECS/HELP debt (reduces borrowing capacity by approximately 20% of the debt)
• Living expenses (based on Household Expenditure Measure or your declared expenses, whichever is higher)
• Childcare and dependant costs
• Other commitments

Pro tip: Pay off small debts and reduce credit card limits before applying—this can increase borrowing capacity by tens of thousands.

Deposit and LVR Impact

Your deposit affects how much you can borrow:

• 20%+ deposit: Full borrowing capacity, no LMI
• 10-20% deposit: Lenders Mortgage Insurance required but most lenders available
• 5-10% deposit: Higher LMI, fewer lender options, strict criteria
• Under 5% deposit: Very limited options (First Home Guarantee or family guarantee)

Quick Borrowing Capacity Estimates

As a rough guide (subject to individual circumstances):

Single income $80,000:

• Borrowing capacity: $400,000-$450,000
• Property budget with 10% deposit: $440,000-$495,000

Couple income $120,000 combined:

• Borrowing capacity: $600,000-$680,000
• Property budget with 10% deposit: $660,000-$750,000

Couple income $150,000 combined:

• Borrowing capacity: $750,000-$850,000
• Property budget with 10% deposit: $825,000-$935,000

These are estimates only. We provide accurate borrowing capacity assessments based on your specific situation.

First Home Buyer Deposit Requirements

How Much Deposit Do You Need?

Minimum deposit: 5% of property price (95% LVR)
Recommended deposit: 10-20%
Ideal deposit: 20%+ (avoids LMI)

Example for $600,000 property:

• 5% deposit: $30,000 (plus $3,000+ costs)
• 10% deposit: $60,000 (plus $3,000+ costs)
• 20% deposit: $120,000 (plus $3,000+ costs)

Additional Upfront Costs

Budget for these costs on top of your deposit:

• Lenders Mortgage Insurance (LMI): $8,000-$30,000 if under 20% deposit (can be added to loan)
• Stamp duty: Varies by state—NSW first home buyers may be exempt up to certain thresholds
• Conveyancing/legal fees: $1,200-$2,500
• Building and pest inspection: $400-$800
• Property valuation: $200-$600 (sometimes lender pays)

Total costs estimate: Add 3-5% to deposit requirement for upfront costs.

Where Your Deposit Can Come From

Genuine Savings: Most lenders prefer to see genuine savings:

• Held in your name for 3+ months
• Demonstrates saving discipline
• Usually required for 5% of property price minimum

Acceptable sources:

• Regular bank account savings
• Term deposits
• Shares or managed funds
• Inheritance (with evidence)

Gifts from Family: Many lenders accept gifted deposits:

• Must be genuine gift (not a loan to be repaid)
• Requires signed gift letter from family member
• Some lenders require minimum genuine savings alongside gift

First Home Super Saver Scheme: Withdraw voluntary super contributions:

• Maximum $15,000 per year
• Total maximum $50,000
• Plus deemed earnings
• Must apply to ATO

Sale of Assets: Proceeds from selling:

• Vehicles
• Shares or investments
• Other property

Equity from Family Property: Family guarantee using parents’ equity:

• Parents use equity in their home
• You borrow up to 100% of purchase price
• No LMI required
• Parents not on title or responsible for repayments

First Home Buyer Government Grants and Schemes

NSW First Home Buyer Assistance Grant

First Home Owner Grant (New Homes):

• $10,000 grant for new homes or substantially renovated homes
• Property value must be $800,000 or less
• Must be first home you or your spouse have owned
• Must move in within 12 months and live there for 6+ months

Eligibility:

• Australian citizen or permanent resident
• At least 18 years old
• Must be buying or building a new home (not established)
• Value limits apply

First Home Buyer Stamp Duty Concessions (NSW)

Full exemption: Properties up to $650,000
Partial exemption: Properties $650,001 to $800,000
No concession: Properties over $800,000

This saves first home buyers $15,000-$30,000+ in stamp duty.

Note: As of January 2023, NSW first home buyers can choose between:

• Traditional stamp duty with exemption/concession, OR
• Annual property tax option (ongoing annual payment instead of upfront stamp duty)

We help you understand which option suits your circumstances better.

First Home Guarantee Scheme (Federal)

What it is: Government guarantees 15% of your loan, allowing you to borrow with just 5% deposit and no LMI.

Key features:

• 5% deposit only required
• No Lenders Mortgage Insurance
• Limited places available annually (35,000 in 2024-25)
• First come, first served
• Participating lenders only

Eligibility:

• Australian citizen or permanent resident
• First home buyer (you and dependants)
• Individual income under $125,000 or couple under $200,000
• Property price under regional caps ($800,000-$950,000 depending on location)

How we help: We’re accredited with participating lenders and can submit your application as soon as places become available each financial year (July 1).

Regional First Home Buyer Guarantee

Similar to standard First Home Guarantee but:

• Available for regional areas
• 10,000 places annually
• Higher property price caps in some regions
• Same 5% deposit, no LMI benefit

Types of Home Loans for First Home Buyers

Variable Rate Loans

How they work: Interest rate fluctuates with market conditions and can go up or down.

Pros:

• Flexibility with extra repayments (unlimited)
• Offset account options reduce interest
• Redraw facility to access extra payments
• No break costs if you refinance or sell
• Often lower rates when RBA cuts rates

Cons:

• Repayments can increase if rates rise
• Less payment certainty for budgeting
• Can be more expensive if rates rise significantly

Best for: First home buyers who want flexibility and can handle some payment uncertainty.

Fixed Rate Loans

How they work: Interest rate locked for 1-5 years (typically 2-3 years).

Pros:

• Payment certainty for budgeting
• Protected if variable rates increase
• Peace of mind knowing exact repayments

Cons:

• Break fees if you sell, refinance, or pay off early
• Limited extra repayments ($10,000-$30,000 per year typically)
• Miss out if variable rates drop
• Usually no offset account

Best for: First home buyers wanting payment certainty and planning to keep the loan through the fixed period.

Split Loans

How they work: Split your loan between fixed and variable (e.g., 50/50 or 60/40).

Pros:

• Some payment certainty from fixed portion
• Flexibility from variable portion
• Hedge against rate movements
• Access to offset account on variable portion

Cons:

• More complex to manage
• May pay slightly higher average rate
• Break fees still apply to fixed portion

Best for: First home buyers who want balanced approach with some certainty and some flexibility.

Low Deposit Loans (High LVR)

What they are: Loans with less than 20% deposit (80%+ LVR).

Key points:

• Require Lenders Mortgage Insurance (LMI)
• LMI protects lender, not you
• Premium can be $8,000-$30,000+ depending on loan and deposit
• Can capitalize LMI into the loan
• Slightly higher interest rates sometimes

Reducing LMI:

• Some professions get LMI waivers (doctors, accountants, lawyers, etc.)
• First Home Guarantee eliminates LMI at 95% LVR
• Family guarantee eliminates LMI

Interest-Only Loans

Generally not recommended for first home buyers:

• You’re not building equity
• Higher repayments when switching to principal and interest
• Limited to 5 years typically
• Only suitable for specific strategies

We usually recommend principal and interest for owner-occupiers to build equity and pay off your home sooner.

Common First Home Buyer Mistakes to Avoid

1. Not Getting Pre-Approved

The mistake: House hunting before knowing borrowing capacity.

The problem:

• Waste time looking at properties you can’t afford
• Fall in love with homes outside your budget
• Sellers don’t take offers seriously without finance approved
• Risk missing out at auctions

Do instead: Get pre-approved before serious house hunting.

2. Maximizing Borrowing Capacity

The mistake: Borrowing the absolute maximum lenders will approve.

The problem:

• No buffer for life changes (job loss, pay cuts, kids)
• Interest rate increases strain finances
• Unexpected home costs (repairs, rates, insurance)
• Restricts lifestyle and savings

Do instead: Borrow comfortably within your capacity, leaving buffer for unexpected expenses and rate rises.

3. Ignoring Total Costs

The mistake: Only budgeting for deposit, forgetting other costs.

The problem:

• Stamp duty (unless exempt)
• Conveyancing fees ($1,200-$2,500)
• Building and pest inspections
• LMI if under 20% deposit
• Moving costs
• Immediate property expenses

Do instead: Budget for all upfront costs—typically 3-5% on top of deposit.

4. Not Comparing Loan Features

The mistake: Choosing based solely on interest rate.

The problem:

• Miss important features (offset accounts, redraw)
• Higher fees may negate rate advantage
• Inflexible loan doesn’t suit your needs
• Break fees if circumstances change

Do instead: Compare total package—rate, fees, features, flexibility.

5. Keeping High Credit Card Limits

The mistake: Maintaining large unused credit card limits.

The problem:

• Lenders assess full limit, not balance
• $10,000 credit limit can reduce borrowing capacity by $50,000+
• Even if you never use the card

Do instead: Reduce or cancel unnecessary credit cards before applying—can increase borrowing capacity significantly.

6. Changing Jobs During Application

The mistake: Accepting new job after loan application submitted.

The problem:

• Lenders often decline applications if employment changes
• Probation periods cause issues
• May need to restart entire process

Do instead: Wait until after settlement to change jobs if possible. If unavoidable, inform us immediately.

7. Making Large Purchases Before Settlement

The mistake: Buying furniture, car, or taking holiday before settlement.

The problem:

• Increases debt, may affect serviceability
• Reduces savings, may affect deposit adequacy
• Lenders recheck finances before settlement
• Could jeopardize loan approval

Do instead: Wait until after settlement for major purchases.

First Home Buyer Success Stories

Emma & Josh – Strathfield First Home

Situation: Young couple, combined income $105,000, saved $45,000 deposit (struggling to save more with rent).

Challenge: Property prices in their target areas (Inner West) were $650,000-$750,000, but could only borrow $550,000 with their deposit traditionally.

Solution: Used First Home Guarantee scheme—5% deposit only, no LMI. Accessed full borrowing capacity of $650,000.

Outcome: Purchased 2-bedroom unit in Strathfield for $640,000, monthly repayments less than previous rent.

Michael – Self-Employed First Home Buyer

Situation: Self-employed tradesman, strong income but tax returns looked low due to legitimate deductions.

Challenge: Banks assessed income at $48,000 (tax return figure) when actual income was $85,000+.

Solution: Used lender accepting accountant declarations for self-employed, demonstrated business cash flow.

Outcome: Approved for $480,000 loan, purchased first home in Burwood, monthly repayments manageable.

Sarah – Single Income with HECS Debt

Situation: Professional earning $95,000, saved $55,000, but had $35,000 HECS debt.

Challenge: HECS debt reduced borrowing capacity by about $150,000 compared to someone without debt.

Solution: Found lender with most favorable HECS treatment, negotiated competitive rate, structured loan optimally.

Outcome: Borrowed $485,000, purchased apartment in Homebush, using offset account to minimize interest while maintaining emergency savings.

Why Choose Awesome Lending Solutions for Your First Home?

Specialist First Home Buyer Service

We understand first home buyers face unique challenges:

• Patient education – We explain everything without jargon
• No question too basic – This is your first time, ask anything
• Pressure-free advice – We want you comfortable with decisions
• Realistic guidance – Honest about what you can afford
• Long-term thinking – Structure loans that suit your future plans

Access to 40+ Lenders

We find the best first home buyer loans from:

• Major banks with competitive rates
• Regional banks with flexible criteria
• Non-bank lenders with specialist options
• First Home Guarantee participating lenders

Government Scheme Expertise

We maximize your government assistance:

• First Home Guarantee applications
• Regional First Home Buyer Guarantee
• NSW First Home Owner Grant guidance
• Stamp duty concession optimization
• First Home Super Saver Scheme coordination

Free Service

Our service costs you nothing:

• No upfront fees
• No application charges
• Lenders pay us commission
• Free loan reviews for life

Start Your First Home Journey Today

Don’t let confusion or complexity stop you from achieving home ownership. We make the process simple and stress-free.

Get Started with a Free Consultation

Phone: 02 7904 9560
Email: hello@awesomelendingsolutions.com.au
Visit: Level 1, 5 George St, North Strathfield NSW 2137

Office Hours:
Monday – Friday: 9:00 AM – 5:30 PM
Evenings and weekends: By appointment for your convenience

What to Bring to Your First Meeting

To make your consultation most useful:

• Recent payslips (last 2-3)
• Bank statements showing savings (3-6 months)
• Details of any debts (car loans, credit cards, HECS)
• ID (driver’s license or passport)

Don’t have everything? No problem—we can still discuss your situation and provide guidance.

Free First Home Buyer Resources

Borrowing Capacity Calculator
Estimate how much you can borrow
[Link to calculator]

Deposit Savings Planner
Calculate how long to save your target deposit
[Link to planner]

First Home Buyer Checklist
Complete guide to your home buying journey
[Download PDF]

Government Grants Guide
Current NSW and federal assistance programs
[Download guide]

Helping Sydney first home buyers since [year]

Albertus Pty Ltd Trading as Awesome Lending Solutions
ABN 60 144 897 781 | Credit Representative 407514
Part of Australian Finance Group Ltd ABN 11 066 385 822 | Australian Credit Licence 389087

Making home ownership accessible for first time buyers across Sydney and NSW

Awesome Lending Solutions, Level 1/5 George Street, North Strathfield, NSW 2137, 02-7204-0371