First Home Buyer Mistakes to Avoid

Most of the things that go wrong for first home buyers don't go wrong at the auction. They go wrong months earlier, quietly, in ways nobody warned you about.

Here are the ones I see most, in roughly the order they cost people the most money.

Not checking your credit card limits

This is the big one, and it's almost always fixable.

Lenders assess credit cards on the limit, not the balance. A card with a $15,000 limit and nothing owing on it still reduces your borrowing power meaningfully, because the lender has to assume you could draw the lot tomorrow.

Same logic applies to buy now pay later accounts and to a car loan you've nearly finished paying.

I have met people who spent two more years saving when what they actually needed was to close two cards.

Saving toward the wrong number

If the figure in your head is 20% of the purchase price, you may be aiming at a target you don't need to hit.

The First Home Guarantee lets eligible first home buyers in with 5% and no Lenders Mortgage Insurance. Since October 2025 there are no income caps and no limit on places.

Work out what you actually need before you commit another three years to saving.

Forgetting that some costs can't be borrowed

Your deposit isn't the only cash you need on the day.

Stamp duty, conveyancing, building and pest, loan fees, rates adjustments and moving all come out of savings, not the loan.

In Victoria the first home buyer duty exemption removes the biggest of those under $600,000, which helps a lot. It doesn't remove the rest.

Budget five to eight thousand beyond everything you've already calculated.

Getting pre-approval and then changing your finances

Pre-approval is an assessment of your position at a moment in time. It isn't a promise.

Between pre-approval and settlement, do not change jobs if you can avoid it, do not take out a car loan, do not open a new credit card, and do not let your savings pattern change dramatically.

Lenders re-check. Deals fall over at this stage more often than people realise, and it's avoidable.

Treating the interest rate as the whole decision

A slightly lower rate on a loan that doesn't suit your situation is a bad trade.

Offset accounts, redraw, the ability to make extra repayments, fees, and how the lender treats your income type can all matter more over the life of the loan than a small difference in the headline number.

Not knowing which schemes stack

Most of the first home buyer schemes work together. The guarantee, the Victorian duty exemption and the First Home Super Saver Scheme can apply to the same purchase.

Most people use one, usually whichever one they heard about first. Using the combination changes what you can afford, not just whether you qualify.

Waiting to be certain

There's a version of this where you keep saving, keep looking, and keep waiting for a moment when it feels safe.

That moment doesn't really arrive. What arrives is more information, and better information lets you make a decision you can live with.

Start by finding out where you actually stand. The calculators on this site are free and they show their working.

Let's get you into a home.