Common mistakes when buying your first home

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Common mistakes to avoid when buying your first home

With the government’s expanded First Home Guarantee Scheme now in effect, eligible buyers can purchase a property with as little as a 5% deposit — and skip lenders’ mortgage insurance (LMI) altogether.

The expansion, which began on 1 October, is expected to help around 70,000 Australians take their first step into homeownership over the next year.

If you’re preparing to buy your first home, it’s a great time to get started — but there are a few common mistakes you’ll want to avoid along the way.

Understanding the Australian Government 5% Deposit Scheme

Previously known as the Home Guarantee Scheme, the Australian Government 5% Deposit Scheme is designed to make homeownership more achievable for first-home buyers.

Here’s how it works:

  • Eligible buyers can purchase a property with just a 5% deposit.

  • The government guarantees 15% of the loan, which means you won’t need to pay LMI.

  • Property price caps have increased, allowing buyers to consider a broader range of homes.

  • Income caps have been removed, opening the scheme to more Australians.

For example, a first-home buyer in Sydney could now purchase a $1.5 million home with a $75,000 deposit, while in Melbourne, a $950,000 property would only require $47,500 upfront.

With more flexibility and higher price caps, the scheme opens the door for many Australians who were previously priced out of the market.

Common mistakes first-home buyers make

1. Underestimating the true costs of buying

Saving your deposit is a major milestone — but it’s only part of the journey. There are several upfront and ongoing costs to plan for, such as:

  • Stamp duty (or transfer duty)

  • Legal and conveyancing fees

  • Building and pest inspections

  • Loan setup and valuation fees

  • Council rates, utilities, insurance, and maintenance

  • Moving and furnishing costs

Having a clear picture of these expenses helps prevent last-minute surprises and ensures your budget remains realistic.

2. Letting emotion drive the decision

It’s easy to fall in love with a property that looks perfect — but emotions can sometimes cloud good judgement.

Stay focused on your non-negotiables: location, budget, size, and long-term suitability.
If a property doesn’t quite tick all the boxes, remember there will always be another opportunity that fits better.

3. Skipping pre-approval

Getting home loan pre-approval gives you a clear idea of how much you can borrow before you start house-hunting.

Pre-approval helps you:

  • Narrow your property search

  • Strengthen your position when negotiating or bidding

  • Move faster when you find the right home

Most pre-approvals are valid for around 90 days, giving you plenty of time to find the right property with confidence.

4. Skipping the building and pest inspection

It can be tempting to skip inspections to save a few hundred dollars — but that small saving can cost you thousands later.

A building and pest inspection identifies potential issues such as:

  • Structural damage

  • Termite or pest activity

  • Asbestos or moisture problems

Arrange inspections before you sign the contract to ensure there are no hidden problems that could affect your investment.

Ready to take your first step?

Buying your first home is an exciting milestone — and having the right guidance makes a big difference.

As your mortgage broker, I can help you:

  • Understand your borrowing power

  • Navigate the 5% Deposit Scheme and other government incentives

  • Find the right loan structure and lender for your goals

If you’re ready to explore your options or want to know how the new scheme could work for you, get in touch today — and let’s make your first home a reality.