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The first-home buyer’s how-to guide: How much money do I need?

By Andrew Bell

Welcome to the first instalment of our series on how to buy a property if you are a first-home buyer. As buying a house is one of the biggest purchases you will ever make in your life, we'll be talking about the monetary side this time.

The deposit

You need to have saved up the most money for this before you buy a house. A deposit is how much you will pay out of your own pocket for your house so that you can secure finance.

The Australian Securities and Investments Commission recommends having a deposit of 20 per cent of the purchase price of your anticipated property, but the Queensland government says at least 5 per cent of the full price may be enough. Of course, it depends on your lender and their rules, as well as your own financial situation.

The higher your deposit, the more likely you'll get a loan approved.

Not only this, but it'll also reduce how much money you'll have to borrow, and so, reduce the amount of interest you'll have to pay too!

Other costs

Unfortunately, the deposit isn't the only amount you need ready for when you buy real estate in Surfers Paradise; other costs also need to be paid.

These include building inspection fees, loan establishment fees, legal fees and stamp duty.

Even though getting a building inspection isn't compulsory, it is highly recommended as the last thing you want is to have unforeseen repair expenses popping up after you've signed the contract.

Stamp duties (also known as transfer duties) are dependent on your state, and Queensland's stamp duty varies depending on your property's dutiable value.

Federal Treasurer Joe Hockey has publicly stated his disdain for this tax, calling it inefficient, meaning this tax may be abolished in the future, but it is still around currently.

Your home loan

Most home loans are a commitment for quite a large chunk of your life. So, like shopping around for your dream Surfers Paradise property, you should shop around for your perfect home loan.

You should compare how much lenders require for repayments, what the interest rates are, the maximum amount you can borrow and how much you will need for your deposit.

Ask as many questions as you can because you want your understanding of your mortgage to be as crystal clear as the waters in the Gold Coast.

There are a few options when it comes to getting a home loan:

  • If you want to lock in a fixed interest rate or keep it variable
  • Whether you want to make your repayments weekly or fortnightly
  • If you're able to make extra one-off repayments

Talking to various lenders and brokers should give you a better idea.


Once you have decided which home loan provider you want to go with, the next step is to get pre-approval for your mortgage.

This is a statement by your lender saying that you are able to borrow up to a certain limit, but it is not binding.

This means that both the lender and you can choose not to continue with the loan.

Even with this uncertainty, it is worth getting this document for two reasons:

  1. It shows sellers that you are a serious candidate because you have already started preparing your finance in advance
  2. If you do end up buying the property and want to go ahead with home loan, your pre-approval streamlines the process because the lender already has a lot of your details

Having your finances in order is only one part of house hunting, a well-established real estate agency in Surfers Paradise can make buying your first home an easier process.

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