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

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.

Home loan comparisons on Mozo

Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can search our database of 472 home loans.
Last updated 26 June 2024 Important disclosures and comparison rate warning*
  • Basic Home Loan

    • Owner Occupier
    • LVR 90-95%
    • Principal & Interest
    Interest rate
    7.19 % p.a.
    Variable
    Comparison rate
    7.22 % p.a.
    Initial monthly repayment
    $4,747
    Go to site

  • Offset Home Loan

    • Owner Occupier
    • LVR 90-95%
    • Principal & Interest
    Interest rate
    7.19 % p.a.
    Variable
    Comparison rate
    7.43 % p.a.
    Initial monthly repayment
    $4,747
    Go to site

  • Basic Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR 80-95%
    Interest rate
    6.75 % p.a.
    Fixed 3 years
    Comparison rate
    7.09 % p.a.
    Initial monthly repayment
    $4,540
    Go to site

    Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.

  • Offset Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR 80-95%
    Interest rate
    6.75 % p.a.
    Fixed 3 years
    Comparison rate
    7.30 % p.a.
    Initial monthly repayment
    $4,540
    Go to site

  • Basic Home Loan

    • Owner Occupier
    • LVR 90-95%
    • Principal & Interest
    Interest rate
    7.19 % p.a.
    Variable
    Comparison rate
    7.22 % p.a.
    Initial monthly repayment
    $4,747
    Go to site

  • Offset Home Loan

    • Owner Occupier
    • LVR 90-95%
    • Principal & Interest
    Interest rate
    7.19 % p.a.
    Variable
    Comparison rate
    7.43 % p.a.
    Initial monthly repayment
    $4,747
    Go to site

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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