First Home Buyer Guide
Everything you need to know about buying your first home in Melbourne — explained in plain English. No jargon, no confusion.
What's Covered in This Guide
Can I afford to buy?
Understanding your budget is the first step. We'll help you work out what you can realistically afford.
Deposit requirements
How much do you actually need saved? The answer might surprise you.
LMI explained simply
Lenders Mortgage Insurance — what it is, when you need it, and how to avoid it.
Schemes & grants
Victorian first home buyers have access to some great incentives. Here's what you might qualify for.
Step-by-step buying process
From pre-approval to settlement — the complete journey explained.
How to get pre-approved
What you need and how long it takes to get the green light from a lender.
Can I Afford to Buy?
The first question most first home buyers ask is "can I actually afford to buy?" The answer depends on three main factors:
- Your income — how much you earn determines how much you can borrow
- Your deposit — how much you've saved affects your loan options
- Your expenses & debts — existing commitments reduce what you can borrow
Quick way to check:
Take our 3-minute borrowing power quiz to get a personalised estimate based on today's lending policies.
Get Your Borrowing PowerDeposit Requirements
The amount of deposit you need depends on whether you qualify for government schemes and how much LMI you're willing to pay.
$30,000
On a $600k property. Requires First Home Guarantee or high LMI.
$60,000
On a $600k property. Lower LMI required.
$120,000
On a $600k property. No LMI required.
Don't forget to budget for additional costs like stamp duty (unless exempt), conveyancing, building inspections, and moving costs.
LMI Explained Simply
Lenders Mortgage Insurance (LMI) is insurance that protects the lender — not you — if you can't repay your loan. It's required when you borrow more than 80% of the property value.
LMI Costs Example
LMI is usually added to your loan, so you don't need to pay it upfront.
How to avoid LMI:
- Save a 20% deposit
- Use the First Home Guarantee scheme (5% deposit, no LMI)
- Have a guarantor (parents can use their property equity)
Schemes & Grants (VIC)
For purchasing or building a new home valued up to $750,000. Must be your principal place of residence.
No stamp duty on properties up to $600,000. Reduced rates for properties between $600,000 and $750,000.
Government guarantees up to 15% of your loan, so you can buy with just 5% deposit and no LMI. Income and price caps apply.
Step-by-Step Buying Process
Get your finances sorted
Understand your borrowing power, save your deposit, and get your documents in order.
Get pre-approved
A conditional approval from a lender so you know exactly what you can spend.
Start house hunting
Now you know your budget, start looking at properties that fit your criteria.
Make an offer
Found the one? Make an offer subject to finance and building inspection.
Formal approval
Your lender does a final assessment and issues formal approval.
Settlement
The legal transfer happens, you get the keys, and you're officially a homeowner!
What to Avoid
- Changing jobs during the application process
- Taking on new debt (car loans, credit cards, BNPL)
- Making large unexplained deposits into your account
- Spending your deposit on other things
- Forgetting about additional costs (stamp duty, conveyancing, inspections)
How to Get Pre-Approved
Pre-approval (also called conditional approval) is when a lender reviews your finances and tells you how much they're willing to lend you — before you find a property.
What you'll need:
- ID (passport, driver's licence)
- Payslips (last 2-3)
- Bank statements (last 3 months)
- Tax returns (if self-employed)
- Details of any debts
Pre-approval typically takes 1-3 business days and lasts 3-6 months.
Frequently Asked Questions
Download the Complete Guide
Get the Melbourne First Home Buyer Roadmap PDF — a step-by-step guide you can reference anytime.
Download Free PDFReady to Get Started?
Take the first step and find out your borrowing power. It's free, quick, and there's no obligation.