Preparing to buy your first home?

First time home buyer essentials

Buying your first home? Go you! IMB’s First Home Buyers Guide provides easy explanations through the journey of buying your first home. Let’s rip into it.

You are no doubt already scouring real estate sites like and to find your first home. Not only is this process lots of fun, but it will sharpen the mind to what area is most suitable for you, what type and size of dwelling you can afford, and how much your deposit will need to be for your home loan. Speaking of which…

How much deposit do I need?

Let’s start from scratch. A frequently asked question is: “Is there such a thing as a no-deposit home loan for first home buyers?” The simple answer is no, except in the case of a Family Guarantee Loan (see below). Without a guarantor (and often even with one) most lenders will need to see a history of saving.

At IMB, you will need at least 5% of your property value saved as a home loan deposit – and you will need to factor in costs like stamp duty, conveyancer fees and any other miscellaneous costs like removalists. In general, rates can be more competitive the larger your deposit is against the purchase value of the property. Check out IMB’s home loan rates and packages. Importantly, any loan with a deposit less than 20% of the property value will usually require Lenders Mortgage Insurance (LMI).

What is "LVR"?

The Loan-to-Value Ratio, or LVR, is the percentage you borrow for a home loan compared to the value of the property. This is the way financial institutions express the value of your deposit. When you apply for the home loan, the lender will independently value the property and calculate how much of the property’s value your deposit will cover. If the property is valued at $500,000 and you have a 10% deposit of $50,000, then your LVR is 90%. Lender's Mortgage Insurance (LMI) is usually required for any LVR over 80%. And there is only one home loan if your LVR is 100%. And that’s…

What is a no deposit home loan?

IMB’s Family Guarantee Loan allows your family to help you purchase a property by offering security for the difference in LVR against their own property, or an investment like a term deposit. This security will ensure that Lender’s Mortgage Insurance is waived. There are still criteria considered, including your capacity to cover fixed expenses like rent, power and so on. Find out more about how IMB’s Family Guarantee Loan works.

How to save money for a house deposit?

There are myriad ways to save money, but here are some money saving tips to help you simultaneously budget and save money fast in a big way, accelerating your ability to save your deposit for your first home loan (or a car, holiday, investment property: you name it).

  • Have a savings goal
  • Budget
  • Consolidate your debts
  • Open a separate savings account
  • Set up an automatic payment plan into your ‘House Deposit’ account
  • Move in with the folks
  • First Home Super Saver Scheme

Explore all the ways to save here.

Am I eligible for the Home Guarantee Scheme?

The Home Guarantee Scheme (HGS) is an initiative of the Australian Federal Government designed to help first home buyers and single-parent families get into their homes sooner. The HGS is administered by Housing Australia and includes the following Guarantees:

First Home Guarantee (FHBG)

The First Home Guarantee aims to support eligible first home buyers to buy a home with only a 5% deposit and not pay Lenders Mortgage Insurance (which is usually payable for any loan where the deposit is under 20% of the loan value).

Click here to out more about the First Home Guarantee, including eligibility criteria, types of eligible property, and more.

Family Home Guarantee (FHG)

The Family Home Guarantee aims to support eligible single parents with at least one dependent child in purchasing a home, regardless of whether that single parent is a first home buyer or a previous homeowner. Eligible single parents can pay as little as a 2% deposit, and not pay Lenders Mortgage Insurance (which is usually payable for any loan where the deposit is under 20% of the loan value).

Find out more about the Family Home Guarantee, including eligibility criteria, types of eligible property, and more.

Alternatively, call us on 133 462 or click here to make an appointment with one of our team to assist with any enquiries about the Home Guarantee Scheme.

Am I eligible for a First Home Owners Grant?

Introduced in 2000 to get first home buyers into an exploding housing market, most states and territories now have a version of the First Home Owner Grant (or FHOG) schemes for new home buyers. Over the years, the criteria and entitlements have changed, so it is best to check out to find out whether you are eligible and what the terms and conditions are for First Home Buyer assistance in your State or Territory, be it an FHOG or concessions on stamp duty.

For now, let’s look at NSW and the ACT, where recent changes have altered the journey to purchase for First Home Buyers.

ACT: Home Buyer Concession Scheme

In the nation’s capital, the First Home Owner Grant ceased on 01 July 2019. However, Stamp Duty is no longer payable on all property types, including vacant blocks of land, provided the buyer meets certain criteria. Again, this could save tens of thousands of dollars off your home purchase. Check out the full details of the ACT’s First Home Buyer Concessions Scheme.

NSW: Two schemes!

In NSW, there are two schemes which first home buyers can access. The First Home Buyers Assistance Scheme (FHBAS), and the First Home Owner Grant. If you are eligible for both, then both can be used together.

NSW First Home Buyer Assistance Scheme

The FHBAS offers first home buyers an exemption from Stamp Duty (also known as Transfer Duty) on new and existing homes valued less than $800,000 and at concessional rates for homes between $800,000 and $1,000,000. Check out the full details and requirements for the NSW First Home Buyer Assistance scheme.

NSW First Home Owner Grant

The FHOG is a $10,000 grant towards the purchase price of new homes (ie – homes that no-one has lived in before) worth less than $600,000 or $750,000 for owner-builder homes. It can be accessed in addition to the FHBAS. Read more about the full details and requirements for the NSW First Home Owner Grant.

What are other costs when buying property?

In addition to your deposit (and Lender's Mortgage Insurance (LMI), you should budget for any upfront costs such as stamp duty, conveyancing fees, establishment fees on your loan, as well as ongoing costs such as property maintenance and loan repayments. You may be able to include some of these costs in your loan, but these costs will add to your loan amount and affect your LVR. As always, having saved the money for these along with your deposit will mean you borrow less and get your home loan out of your life sooner. Your Home Loan Specialist can run you through what loans attract what fees and where you can make savings. Any costs in advertised rates will be expressed as a Comparison Rate alongside the advertised rate. Check out IMB’s home loans.

What is Stamp Duty?

Also known as 'transfer duty', stamp duty is a state government tax which is payable when a property is purchased. As mentioned, some state governments have stamp duty concessions for First Home Buyers – check with your IMB Home Loan Specialist or log on to your state government website for information on the possible concessions available to you. Or use our Stamp Duty Calculator to see how much it might cost you.

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Important Information

This article has been prepared by IMB Bank and contains general information only. It is not intended to be relied on as advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, financial, taxation or other professional advice before you make any decisions about your business. Consider the relevant Terms and Conditions or Product Disclosure Statement and Target Market Determination available here before deciding whether to acquire any products or services offered by IMB Bank. Lending criteria, terms and conditions, fees and charges apply to IMB loan products.  

IMB Bank does not recommend any third party products or services referred to in this article and we accept no liability in relation to them. Any links to third party websites are for your information only and we do not endorse any content on those sites.