5 New Year's resolutions for first home buyer success in 2019

Niko Iliakis

09 Jan 2019

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After a tumultuous few years which saw housing prices skyrocket to the highest they’ve ever been, the Australian property market looks set to settle down - at least a tiny bit - in 2019.

And if the decrease in prices (2% over the past year according to CoreLogic) are anything to go by, this could prove to be a breakout year for first home buyers.

But landing your first home is no easy feat, even in a favourable market. So if you’re one of the many Australians eager to buy, here are some resolutions to put you in the best position for property success.

1. Save towards a 20% deposit

While there are home loans out there that let you borrow 95% of a property’s price, having a deposit that’s 20% or more is ideal.

A large deposit means you won’t have to spring for lenders mortgage insurance. Plus you’re less likely to be straining under the weight of your monthly repayments since you’ve borrowed less.

Young people looking to buy their first home will want to review their spending habits and think about cutting back on any unnecessary purchases. The sooner you get serious about saving, the sooner you can get a sizeable deposit going.

For a precise picture of how much you spend, consider using our budget calculator or a budgeting app. You might be shocked to learn how much those daily lunches and Ubers amount to, but it could be a much needed wake-up call to get on top of your finances.

2. Make sure your credit is first-rate

Imagine you worked at a bank. If someone with your savings, credit history, and spending habits asked you for a loan, would you give it to them? This is the mentality you need to put yourself in if you’re serious about purchasing your first home.

Considering lenders usually want to see 3-6 months’ worth of bank statements when assessing your eligibility, you need to keep on top of your bills and credit card repayments for at least that long if you haven’t been already.

If you’re concerned your credit history isn’t up to snuff, check out our guide for improving your credit score.

3. Start thinking long-term

So you’ve found your ideal home. It gets plenty of sun, the neighbours seem fantastic, and it’s smack dab in the middle of a trendy cafe district. But oof, that price tag isn’t so great. While it might be tempting to rush into things, you need to be realistic about what you can afford.

Sometimes your best bet is to view your first property as an investment — the first step in an ongoing process aimed at landing the property of your dreams.

That means lowering your expectations a bit and perhaps looking outside your preferred areas to find a home that fits your current budget. When you’re more secure financially, then you can trade up.

One avenue to consider is ‘rentvesting.’ That’s when you purchase a home in one area while continuing to rent in another, more preferable one. For young Australians who’ve felt locked out of the property market for too long, this has become an increasingly attractive option.

4. Ask for help if you need it

If the required deposit seems a bit too daunting, you don’t have to bail on your hopes just yet. Parents and other family members can act as guarantors if they have property of their own.

If your folks are willing to put up their own house as security and - if you’re doubly lucky - chip in towards the deposit, it will go a long way towards increasing your chances at securing that home loan. (Just make sure everyone understands the risks involved: if you default, your parents will have to pay or risk losing their home.)

What’s more, it could spare you having to pay lenders mortgage insurance - which will save you thousands - so maybe today’s a good day to take up your mum’s offer to grab some coffee together.

5. Stay on top of market trends

Following the ups and downs of property rates might give you a headache, nausea, vertigo, or all three, but it’s crucial for anyone looking to break into the market.

At the moment, speculation about how low prices will go dominates the discussion. Analysts say downward trends will most likely continue for Sydney and Melbourne house prices, giving first home buyers in the two major cities a ray of hope. Meanwhile, prices in Brisbane have remained relatively flat, but are slated to increase in the distant future thanks to the city’s growing appeal.

It’s also a good idea to stay on top of changes in interest rates if you want to snap up a good home loan deal.

No one said it was going to be easy, but if you can stick to these resolutions your first property could be within reach sooner than you think. If you’ve got a place in mind and you’re confident you can make the repayments, head over to our home loan rate comparison page for a run-down of your options.

First home loans

Rates updated daily. Advertiser disclosure.

  • loans.com.au

    2.88% p.a.
    fixed 3 years

    2.89% p.a.

    $1234

    Product details Close details
    Fixed Home Loan

    Owner Occupier, Principal & Interest

    2.88% p.a.
    fixed 3 years

    2.89% p.a.

    This home loan is available for purchase or refinance, complete with 1, 2 or 3 year fixed rate options. Minimum 10% deposit required.

    Fixed Home Loan

    This home loan is available for purchase or refinance, complete with 1, 2 or 3 year fixed rate options. Minimum 10% deposit required.

    • 2.88% p.a.
      fixed 3 years

    • 2.89% p.a.

    • $520

    • $0.00

    • $0.00

    • yes - free up to $10,000 p.a.

    • no

    • no

    • $520

    • 90.00%

    • $50,000

    • $1,000,000

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Fixed Home Loan

    Details Close

  • Suncorp

    2.69% p.a. variable

    2.70% p.a.

    $1234

    Product details Close details
    Back to Basics Special

    LVR<90%, Owner Occupier, Principal & Interest

    2.69% p.a. variable

    2.70% p.a.

    No monthly account keeping fee, no ongoing annual fee and no loan establishment fee on new lending of $150,000 or more. Get a $2,000 cash bonus when you refinance with an eligible Suncorp Bank Home Loan of $250k+. T&Cs & eligibility criteria apply. Minimum 10% deposit.

    Back to Basics Special

    No monthly account keeping fee, no ongoing annual fee and no loan establishment fee on new lending of $150,000 or more. Get a $2,000 cash bonus when you refinance with an eligible Suncorp Bank Home Loan of $250k+. T&Cs & eligibility criteria apply. Minimum 10% deposit.

    • 2.69% p.a. variable

    • 2.70% p.a.

    • $0

    • $0.00

    • $350.00

    • Yes - free

    • yes - free

    • no

    • $0

    • 90.00%

    • $150,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Back to Basics Special

    Details Close

  • People's Choice Credit Union

    1.99% p.a.
    fixed 3 years

    3.64% p.a.

    $1234

    Product details Close details
    Fixed Rate Home Loan Package

    Owner Occupier, Principal & Interest, Home Loan Package

    1.99% p.a.
    fixed 3 years

    3.64% p.a.

    A People’s Choice 3 year fixed home loan allows you to enjoy a simple, non-complicated home loan with a competitive rate. There are no restrictions to the number of loans you can combine on a package. Lock in a competitive fixed interest rate with People’s Choice.

    Fixed Rate Home Loan Package

    A People’s Choice 3 year fixed home loan allows you to enjoy a simple, non-complicated home loan with a competitive rate. There are no restrictions to the number of loans you can combine on a package. Lock in a competitive fixed interest rate with People’s Choice.

    • 1.99% p.a.
      fixed 3 years

    • 3.64% p.a.

    • $0

    • $395.00 yearly

    • $350.00

    • yes - free up to $10,000 p.a

    • no

    • no

    • $0

    • 95.00%

    • $100,000

    • -

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Fixed Rate Home Loan

    Details Close

  • Well Home Loans

    2.52% p.a. variable

    2.55% p.a.

    $1234

    Product details Close details
    Well Balanced

    Owner Occupier, Principal & Interest, LVR <90%

    2.52% p.a. variable

    2.55% p.a.

    A low rate home loan for variable owner occupied loans, up to 90% LVR and no ongoing fees. Winner of a Mozo Experts Choice Award 2019 for the Best New Home Loan.^

    Well Balanced

    A low rate home loan for variable owner occupied loans, up to 90% LVR and no ongoing fees. Winner of a Mozo Experts Choice Award 2019 for the Best New Home Loan.^

    • 2.52% p.a. variable

    • 2.55% p.a.

    • $785

    • $0.00

    • $300.00

    • yes - free

    • yes - free

    • Optional - $10 per month

    • $785

    • 90.00%

    • $200,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Well Balanced

    Details Close

  • Suncorp

    2.19% p.a.
    fixed 3 years

    3.03% p.a.

    $1234

    Product details Close details
    Fixed Home Loan Special Offer Home Package Plus

    Owner Occupier, Principal & Interest

    2.19% p.a.
    fixed 3 years

    3.03% p.a.

    No monthly account keeping fees & No loan establishment fee. Get up to $3,000 cash bonus when you refinance with an eligible Suncorp Bank Home Loan. T&Cs & eligibility criteria apply.

    Fixed Home Loan Special Offer Home Package Plus

    No monthly account keeping fees & No loan establishment fee. Get up to $3,000 cash bonus when you refinance with an eligible Suncorp Bank Home Loan. T&Cs & eligibility criteria apply.

    • 2.19% p.a.
      fixed 3 years

    • 3.03% p.a.

    • $0

    • $375.00 yearly

    • $350.00

    • yes - free up to $500 per month

    • no

    • no

    • $0

    • 90.00%

    • $150,000

    • -

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Fixed Home Loan Special Offer

    Details Close

^See information about the Mozo Experts Choice Home loans Awards