First Home Buyer's Guide to Victoria

Buying your first home is exciting, but the finance side can feel like the hardest part to get right. Here's what's worth understanding before you start looking seriously.

Start with your deposit, not the listings

It's tempting to start browsing properties before you know what you can actually borrow. A better starting point is understanding your deposit and your likely borrowing power, since this shapes which price range is realistic and avoids the disappointment of falling for a home outside your budget.

Most lenders prefer to see a deposit of at least 20% of the purchase price to avoid Lenders Mortgage Insurance (LMI), though many first home buyers borrow with a smaller deposit and factor LMI into their costs. There are also government schemes designed to help eligible first home buyers purchase with a smaller deposit without paying LMI, though eligibility criteria and availability can change, so it's worth checking your specific situation rather than assuming you qualify.

Understand what counts as genuine savings

Many lenders want to see evidence of genuine savings, meaning funds you've saved over time rather than a lump sum that's just appeared in your account. If part of your deposit is a gift from family, most lenders will still want this documented clearly, along with a gift letter confirming it doesn't need to be repaid.

Get pre-approval before you start making offers

Pre-approval gives you a realistic borrowing figure and shows agents and vendors you're a serious buyer. It isn't a guarantee of final approval, since the lender will still need to assess the specific property, but it removes a lot of uncertainty from your search.

Grants and concessions worth checking

Victoria offers various grants and stamp duty concessions for eligible first home buyers, though the details, thresholds and eligibility rules are updated periodically. Rather than relying on general information, it's worth confirming current eligibility for your specific purchase through the State Revenue Office or with your broker before you factor any grant into your budget.

Have your documents ready early

Lenders typically ask for recent payslips, bank statements, identification and details of any existing debts. Getting these together early speeds up the pre-approval process considerably, and reduces the back-and-forth once you've found a property.

The bottom line

The first home buying process has a lot of moving parts, but none of them need to be a mystery. Working through your deposit, borrowing power and pre-approval with a broker before you start inspecting properties means you can make an offer with confidence when you find the right place.