What Are the Stages of Buying Your First Home?

How Long Does It Take to Buy Your First Home?

The process from starting your search to holding the keys typically takes three to six months, though it can stretch longer depending on how quickly you find the right property and how prepared you are with finance. Your loan application can be approved in principle within days, but settlement periods in most states run between six and twelve weeks from exchange of contracts.

Consider a buyer who starts looking in February, lodges a home loan application in early March after identifying a property, exchanges contracts mid-March, and settles in late May. That timeline assumes they had already worked out their deposit and borrowing position before making an offer.

Working Out What You Can Borrow

Your borrowing capacity depends on income, existing debts, living expenses, and the deposit you have available. Most lenders assess serviceability by applying a floor rate higher than the current variable or fixed rate you would actually pay. They also factor in minimum living expense benchmarks that may exceed your actual spending.

A buyer earning $85,000 a year with a car loan of $15,000 and monthly living costs around $2,200 might be able to borrow somewhere between $450,000 and $500,000 depending on the lender. That range shifts if you have a second applicant or additional income streams. Running those numbers early tells you whether the properties you are looking at are within reach or whether you need to adjust either the deposit or the price range.

Getting Your Deposit Together

Most buyers need at least 5% of the purchase price saved as genuine savings, though low deposit options through the Australian Government 5% Deposit Scheme allow eligible first home buyers to proceed without paying Lenders Mortgage Insurance. Genuine savings are funds held in your name for at least three months. A gifted deposit from immediate family can make up part of your total deposit, but lenders still expect you to demonstrate some capacity to save.

In addition to the deposit itself, you need to cover stamp duty unless you qualify for a concession or exemption, legal fees, building and pest inspections, and lender costs. In New South Wales, a buyer purchasing an established home at $750,000 would pay no transfer duty under the first home buyer stamp duty concession. In Victoria, that same price would attract a sliding scale concession. Queensland offers nil duty on established homes up to $700,000 for eligible buyers.

Applying for Pre-Approval

Pre-approval gives you a conditional commitment from a lender before you make an offer. The lender assesses your income, debts, and deposit, then indicates how much they are prepared to lend subject to a satisfactory property valuation. Pre-approval is typically valid for three to six months depending on the lender.

You lodge payslips, tax returns, bank statements, and proof of deposit. The lender runs a credit check and serviceability assessment. If approved, you receive a letter stating the loan amount and any conditions that must be met before final approval. That letter does not guarantee the loan will settle, but it does confirm you are a credible buyer when negotiating with vendors.

Making an Offer and Exchanging Contracts

Once you identify a property, you make an offer either through the agent or at auction. If the offer is accepted, your solicitor or conveyancer prepares the contract of sale. You sign the contract and pay a deposit, usually 10% of the purchase price, though this can be negotiated lower in some cases. The contract becomes binding once both parties exchange signed copies.

The cooling-off period in most states gives you a short window to withdraw from the contract, typically three to five business days, though you may forfeit a small percentage of the deposit. No cooling-off period applies if you buy at auction. During this period, your solicitor reviews the contract, checks title searches, and confirms there are no unexpected easements, encumbrances, or zoning issues.

Arranging Formal Loan Approval

After exchange, the lender orders a valuation of the property. The valuer inspects the property and prepares a report confirming the market value. If the valuation comes in at or above the purchase price, the loan proceeds to formal approval. If it falls short, you may need to increase your deposit to cover the gap or renegotiate the sale price.

In our experience, valuations on established homes in well-regarded suburbs tend to align with sale prices, but properties in thin markets or those requiring significant work can be more volatile. The formal approval is issued once all conditions are satisfied. You then receive a loan contract setting out the interest rate, loan term, repayment amount, and any ongoing fees. You sign and return that contract to the lender, who then prepares to settle.

Understanding First Home Buyer Grants and Concessions

First home owner grants vary by state and are generally limited to new builds. In Queensland, eligible buyers purchasing a new home under $750,000 from 1 July 2026 receive a $15,000 grant. In Western Australia, the grant is $10,000 for new homes up to $800,000 south of the 26th parallel and up to $1,000,000 to the north. South Australia offers $15,000 with no price cap on new homes.

Stamp duty concessions apply more broadly and can cover both new and established properties depending on the state. The Australian Capital Territory removed all property value and income limits from 1 July 2026, offering full conveyance duty exemption to eligible first home buyers regardless of purchase price. Victoria provides a full exemption on properties up to $600,000 and a concession up to $750,000. These concessions reduce the upfront cash you need at settlement, which can make a material difference when funds are tight.

Settlement and Final Costs

Settlement is the legal process where ownership transfers from vendor to buyer. Your lender releases the loan funds to your solicitor, who then pays the vendor and any outstanding amounts including rates adjustments and agent commissions. You receive the keys once settlement is confirmed, usually on the same day.

Final costs at settlement include solicitor or conveyancer fees, title registration, mortgage registration, and any outstanding adjustments for council rates or water charges. In most cases, these additional costs add another $2,000 to $3,000 to the total amount you need on settlement day. If you are buying a property that requires immediate work, you should also factor in renovation or maintenance costs before moving in.

What Happens After You Move In

You are required to occupy the property as your principal place of residence if you accessed first home buyer concessions or grants. Most state schemes require continuous occupation for at least six to twelve months from settlement or completion. If you accessed the First Home Super Saver Scheme, you must move in within twelve months of settlement or notify the Australian Taxation Office if your circumstances change.

Your first mortgage repayment is usually due around a month after settlement. If you chose a variable interest rate, your repayments will move in line with any changes your lender makes to their rates. If you locked in a fixed interest rate, your repayment stays the same until the fixed term ends. An offset account linked to your loan can reduce the interest you pay by offsetting your savings balance against the loan principal, though not all loan products include this feature.

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