10 expert tips for buying your first home in 2024

Whether you’re at the stage of working out how much you can afford or you’re ready to compare home loans, it never hurts to have some expert tips at your disposal – especially if you’re unsure about how to buy your first home. 

New research reveals a significant increase in the number of first-home buyers planning to enter the property market in 2024. 

Mortgage brokers, Resolve Finance, conducted a survey that found 14% of those who don’t currently own a home intend to buy one over the next 12 months. 

Just six months ago, that number was down at 4%. 

Managing director of Resolve Finance, Don Crellin says the stabilisation of interest rates and the rising cost of rent could be the catalyst for the shift in intentions we’re seeing.

So, if you’re planning to get a foot in the door of your first home this year, here are some tips from both Mozo finance expert Peter Marshall, and Resolve Finance’s Don Crellin. 

1. Work out how much you can afford 

Borrowing power

If you haven’t yet worked out your borrowing power (how much a lender will let you borrow), then this should be your first port of call.

Crellin says to consider your income, expenses, and any existing debts.

You can use a borrowing power calculator for a rough picture of how much you might be able to borrow.

RELATED: Here’s how much you’ll need to afford a $750,000 home loan in Australia

2. Find out about grants and schemes in your state 

First Home Owners Grant (FHOG) 

First-time buyers may be eligible for the First Home Owners Grant (FHOG).

How much you get from the FHOG depends on your state or territory government. Read through the FHOG guide for your state:

• FHOG Victoria
• FHOG NSW
• FHOG Queensland
• FHOG WA
• FHOG SA
• FHOG NT
• FHOG Tasmania 
• ACT: Homebuyer concession scheme (ACT Revenue Office) 

Other government schemes

• First Home Loan Deposit Scheme (FHLDS)
• First Home Super Saver Scheme (FHSSS)
• First Home Guarantee (FGH).

3. Plan for additional costs 

Aside from the deposit and home loan repayments, there are other costs of buying a home to consider too.

According to Crellin, these could include stamp duty, maintenance, and home insurance. 

Stamp duty 

Mozo expert Peter Marshall notes that stamp duty is a big one. 

“Get an idea of how much stamp duty you might be up for very early in the process because that will affect how much you can afford to spend,” he says.  

Keep in mind that there may be state government schemes available that could reduce or waive stamp duty fees, like:

• First Home Buyer Assistance Scheme in NSW 
• First Home Owner Rate in WA
• Homebuyer Concession Scheme in the ACT. 

Marshall says these schemes can influence the sorts of properties you can afford to be looking at.  

Conveyancers, property inspections, and pest inspections 

There are some other costs that you may or may not need to pay before settling on a property. 

“You’ll need to get a conveyancer, you’ll probably want to get a property and pest inspection report done,” Marshall says. 

Council rates 

Marshall adds that when you’re settling your loan, you’ll need to make sure that you’ve got money available for paying council rates.

“Your council rates can be paid quarterly, but sometimes when you buy a place the council will say you need to pay your first year up-front. So, you may not be able to spread it over your year – it may be one big lump sum.”

Home insurance

Once you’ve bought your home, it’s also a good idea to compare home insurance to help protect your new property. 

“A lot of insurers will let you make those payments monthly, so you can spread those costs over the year, rather than paying for it all up-front,” Marshall said. 

Before you move in… 

Before you move your furniture in, you might also consider getting your new house cleaned and painted, or even getting the flooring replaced. 

Of course, those costs are subject to the condition of the property and whether you’re willing to put a bit of elbow grease into it yourself, or hire a pro.

4. Get home loan pre-approval 

Marshall says pre-approval (aka ‘conditional approval’) can provide more confidence about what your lender will give you, in terms of your maximum loan amount.

“That can be very comforting and give you a lot more assurance about whether the bank is going to cover a loan for the properties you’re looking at.” 

Marshall notes that pre-approvals are helpful but need to be treated cautiously. 

“You might find that the bank disagrees with the valuation of a property you’re looking at, or not wanting to lend you as much as they’ve conditionally approved you for. 

“Make sure you read the fine print about what the bank is and isn’t offering.” 

But before the bank will agree to lend you anything, you need to impress them.

5. Impress your lender with organisation and genuine savings 

By ‘impress’ we don’t mean show off your juggling skills or belt out a pitch-perfect rendition of Adele’s Rolling in the Deep. Fortunately, most bank staff aren’t looking for the X-factor. They mainly want to know if you can service a loan.  

Get your finances organised 

Marshall says to make sure that you’ve got documents supporting your claims about income and expenses, should the bank want to check them. 

“If they feel like you know what you’re doing, and you’re not trying to fudge the figures, I think that would give them a bit more confidence.” 

Marshall also recommends you go over your expenses to cut out anything you can live without, in order to maximise the amount of money you have to make repayments.

Genuine savings

Marshall says genuine savings (ie. savings you’ve built up over time) can give a lender confidence that you’re in a stable enough financial position to service a mortgage. 

“If a lender can see that you’ve been building up money over time and you can show them how that fits into your budget, again that will give them a bit more confidence that you’re organised, that you know what you’re doing, and you can stick to a budget,” he says.

Genuine savings look a lot better than a lump sum coming into your account. 

“If you’ve suddenly got a lump sum coming into your account, and you’re not properly able to explain how that got there, then that could leave them asking questions and create a little doubt. 

“I think if I was a lender, seeing that kind of thing, I would be a bit more conservative with the figures than I would otherwise.”

6. Research locations and property 

Crellin recommends keeping an eye out for areas and properties that have value growth potential, including things like access to good amenities and public transportation links. 

Aside from keeping growth areas in mind, Crellin says you could also:

• Research pricing trends in your chosen area
• Attend open houses and inspections to get a feel for the area and the type of property you want 
• Talk to builders with a strong track record about building and land options. 

If you find you’re priced out of your ideal areas, consider checking out bridesmaid suburbs, where prices may be lower, while still close to your preferred areas. 

7. Avoid Lenders Mortgage Insurance (LMI) if you can

While Lenders Mortgage Insurance (LMI) can help you to secure a home loan with less than a 20% deposit, Marshall says it has its pitfalls. 

“Skip the lender’s mortgage insurance because if you want to refinance and you have an LVR over 80%, you’re going to have to pay LMI again – it doesn’t go with you.

“I think that’s one of the biggest points to make about LMI. You can pay it, but then you’re stuck with that lender until you’ve gotten under 80%. It’s lenders mortgage insurance, not your mortgage insurance.”

8. Don’t be afraid to negotiate on a private sale 

As buying a home is a costly decision, Marshall says you shouldn’t be afraid to negotiate – even after an offer has been accepted by the agent. Just make sure there’s a good reason for it. 

“Don’t be afraid to reduce your offer after it’s been accepted if you’ve got something to base that reduction off, such as a building inspection report,” he says. 

“The sellers may not want to take a reduced price after they’ve, in their heads, locked you in as the buyer. But then you may find that they’re very keen to make the sale and you may get a bit of a discount.

“So, don’t be afraid to negotiate, haggle, argue – you’re talking about large amounts of money.”

9. Don’t pay for something you’re not going to use 

There are lots of different home loan features out there, but some come at a premium. For example, offset accounts. 

“Offset accounts are a great feature for a borrower that sometimes has some money coming through that they put into that account to reduce their interest bills,” says Marshall.

“But those loans also come with a cost premium. Unless you’re going to make use of that offset facility, there’s no need to pay any extra. You can get what’s called a ‘basic loan’ – those loans will still let you make additional repayments and withdraw those additional repayments if you need to, and reduce your interest bill that way.

“So, offset accounts are great, but there is a cost involved. So my advice on that front is: don’t pay for something that you’re not going to use.”

10. Compare home loans 

Crellin says you should understand the types of home loans available and explore loan terms, interest rates, and any additional fees. 

This is especially true if it’s your first home loan. 

One of the major decisions you’ll make is choosing between variable rate home loans, or fixed rate home loans.

Marshall says variable rate home loans look more attractive from a buyer’s perspective at the moment. 

“Lenders have reduced some fixed rates a bit over the last couple of months, but they’re pretty much on par with variable rates.” 

According to the Mozo database, the average owner-occupier variable rate loan ($400k, <80% LVR) sits at 6.85% p.a., with the lowest rate coming in at 5.69% p.a. (5.70% p.a. comparison rate*) from The Capricornian. 

One-year fixed rates are sitting slightly below that at 6.54% p.a. on average, with the lowest standard fixed rate coming in at 5.98% p.a. (6.47% p.a. comparison rate*) from Australian Mutual Bank.

“If variable rates start coming down within the next 12 months, then you’re not going to get the benefit of rate reductions until your fixed rate period is over,” says Marshall. 

“So, if you’ve locked in for something like two or three years, you really want [your fixed rate] to be a much lower rate now than variable rates. And those rates are not really around.”

For more tips, check out our home buying guides. If you’re at the stage where you’re ready to do some research, or lock in a great rate, compare some of the featured home loans below.