First Home Buyer Guide: Mortgage to Settlement

A first home buyer can plan the purchase by matching an affordable mortgage with confirmed funds, then coordinating approval and settlement around the contract. Start with the buyer’s finances and property plans before counting any government assistance. Each scheme has its own eligibility rules, and a smaller deposit still leaves repayments and purchase costs to fund.

For brokers, the aim is one finance plan the buyer and their conveyancer can act on. The steps below connect the savings target to the final transfer of ownership, with checks before each commitment.

Define the First-Home Buyer Scenario

1. Record who will buy, what they have owned before and where they intend to live. Include every applicant, any spouse relevant to assistance rules and any previous property interest. Capture citizenship or residency, dependants and the intended state or territory.
2. Define the property search. Record the location, price range and property type, including whether the buyer wants an existing home or a new build. Keep these facts separate from each programme’s definition of a first-home buyer.
3. Set an affordable purchase limit. Test repayments against verified income and actual expenses, with room for ownership costs and changes in interest rates. Use that limit to guide inspections and offers.
4. Identify checks before signing. The broker assesses finance and whether the proposed property meets lender security requirements. A solicitor or conveyancer reviews the contract and title, while suitable specialists assess building condition and pest risks.

Buying your first home in everyday language doesn’t establish eligibility for every first home buyer scheme. Previous ownership, the other applicant’s history and intended occupancy can change the answer. Record the facts once, then assess each applicable programme separately.

There is no single best first home buyer loan for every client. Compare loans that accept the buyer’s income and deposit, then weigh repayments, fees and features the buyer will use. An advertised low rate is little help if the lender won’t accept the property or the evidence of income.

This guide follows a purchase intended as the buyer’s home. Use the separate guide for a first-home buyer considering an investment property if that purpose changes. For a build, follow the first-home house and land package guide for the additional finance sequence.

Calculate the Funds Needed to Buy

Calculate the buyer’s contribution to the purchase separately from transaction costs and the money they need after moving in. A deposit percentage alone doesn’t show whether the buyer has enough funds to complete.

Build a budget with a line for each of these items.

• Purchase price less the proposed loan and any approved purchase contribution.
• Transfer duty after any applicable concession, using the relevant jurisdiction’s calculation.
• Conveyancing or legal fees, searches and registration charges.
• Building and pest inspections, plus moving costs.
• Lender charges and any lenders mortgage insurance (LMI), which protects the lender against certain losses if the borrower defaults.
• Insurance, settlement adjustments and a cash reserve for early ownership expenses.

Reconcile the available money to savings statements and evidence of any gift. Establish whether family money is a gift or a loan, because repayments on a family loan affect the budget. Record when each contribution will be available and whether the lender accepts its source.

A Fictional Purchase Budget

Assume an existing home costs $600,000 and the proposed loan is $540,000. The following amounts are illustrative Australian-dollar assumptions, not quotes, duty calculations or a loan offer. Assume the property valuation equals the purchase price and no LMI applies under the fictional loan terms.

Budget item	Assumed amount
Buyer’s contribution to the price	$60,000
Duty and registration after assessed concessions	$8,000
Legal work, inspections and lender costs	$4,000
Moving, insurance and settlement adjustments	$3,000
Cash reserve kept after settlement	$10,000
Total funds required	$85,000

The buyer has $65,000 in savings and a confirmed $10,000 gift, leaving a $10,000 shortfall against the $85,000 target. A hoped-for grant hasn’t been approved or scheduled for payment, so it contributes nothing to this calculation.

If eligible assistance later reduces duty, change the duty line. If an approved grant becomes available in time, add it as a funding source. Count each benefit once and retain the document establishing its amount and payment timing.

The contract deposit is an early payment towards the price. If this buyer pays $30,000 on signing, it uses part of the $60,000 contribution already budgeted. It isn’t another $30,000 purchase cost, but the buyer must have it available on the contract’s due date.

Choose a First-Home Funding Route

Choose a funding route according to the gap it solves, then test the buyer and property against that route’s rules. Ordinary lending remains an option even where no first-home assistance applies.

As at October 2026, the Australian Government 5% Deposit Scheme supports eligible first-home buyers with a minimum 5% deposit and no LMI. Formerly the Home Guarantee Scheme, it uses a government guarantee to the participating lender. The buyer remains responsible for repayments and costs, and applies through a participating lender.

A guarantee can reduce the deposit barrier, but the lender still assesses repayment capacity. A First Home Owner Grant contributes money where eligibility and payment requirements are met. A duty concession reduces a tax cost, while shared equity reduces the buyer’s required loan through another party’s contribution.

Route	What changes in the funding plan	What must be established
Ordinary home loan	The buyer funds their contribution and costs under the lender’s terms	Accepted income, deposit source, repayment capacity and property
Government guarantee	A smaller deposit can support eligible lending without LMI	Scheme eligibility, participating lender, property cap and ongoing obligations
First Home Owner Grant	Approved grant funds can reduce the cash gap	Jurisdiction, buyer and property eligibility, plus payment timing
Duty concession or exemption	The duty line falls by the applicable relief	The jurisdiction’s buyer, property and transaction rules
Shared equity	A government contribution reduces the loan needed	Eligibility, available route and obligations attached to the government’s share
First Home Super Saver Scheme	Eligible released savings add to the buyer’s contribution	Eligible voluntary contributions, release process and purchase timing

For shared equity, the Australian Government Help to Buy Scheme shares the property’s value with the government. As at October 2026, its contribution can reach 30% for an existing home or 40% for a new home. The contribution must eventually be repaid under the scheme’s terms, with the amount linked to the property’s value.

Help to Buy permits grants and duty concessions, but its published eligibility rules restrict other government purchase support, including guarantees and shared-equity assistance. Don’t assume every first home buyer incentive can be combined.

Use the dedicated guides for the 5% Deposit Scheme, Help to Buy and First Home Owner Grants. The first-home buyer duty guide covers jurisdictional relief, including the different routes relevant to Victoria and the Australian Capital Territory.

Indigenous Business Australia (IBA) home loans are a separate route for eligible Aboriginal and Torres Strait Islander buyers. As at October 2026, IBA’s home-loan information explains preparation and the expression-of-interest route through MyIBA. Use IBA’s own material for eligibility and speak with its home-loan team about the applicant’s circumstances before treating that route as confirmed finance.

Prepare the Mortgage Application

Prepare the application by making each financial figure traceable to evidence before selecting a lender. Serviceability is the lender’s assessment of whether the buyer can meet repayments alongside their other expenses and debts.

1. Collect identification and income evidence. Match applicant details across the records, and gather payslips or the documents needed for self-employed income.
2. Reconcile commitments and living expenses. Include credit card limits, existing loans and other repayment obligations. Explain differences between declared expenses and bank activity.
3. Prove the contribution. Gather savings statements and gift evidence, then reconcile them to the purchase budget. Record any lender requirement for genuine savings, meaning an accepted history of saving or holding funds.
4. Review credit history using Moneysmart’s credit-report guidance. Have the buyer obtain their credit report and consent to sharing it with the broker, then reconcile recorded accounts with disclosed commitments. Collect explanations and records for repayment problems or disputed entries before comparing lender policy.
5. Compare suitable lenders. Assess income treatment, deposit rules and acceptable security alongside product costs and features. Choose a lender whose evidence requirements can be met within the intended purchase timetable.
6. Submit the complete file. Include explanations for unusual facts and track requests for further documents. Proceed on the terms in the actual decision letter.

A broker can use Bulma’s Policy Advisor to compare deposit and income requirements across 52+ lenders, with the policy wording behind each answer. The broker still makes the loan recommendation and the lender decides whether to approve it.

Pre-approval helps set the search range, but its conditions still matter. As at October 2026, ANZ’s pre-approval guidance says approval remains subject to conditions, including a satisfactory property valuation. ANZ also identifies unacceptable property types and changed financial circumstances as reasons a loan can fail after pre-approval.

Record the approved amount, expiry date and outstanding conditions. Distinguish what the lender has already assessed from what depends on the chosen property or updated documents. Use the pre-approval process guide for that assessment stage.

Coordinate the Contract and Settlement

Coordinate finance work against the dates in the actual contract, including the finance condition and settlement deadline. The broker needs the signed contract promptly so the lender can assess the specific purchase.

1. Have the solicitor or conveyancer explain the contract before signing. Establish the contract deposit, finance condition and notice requirements, plus the settlement date.
2. Arrange the lender’s property assessment. Track the valuation and any security conditions, then recalculate the contribution if the approved loan changes.
3. Obtain formal approval. Read the approval terms and remaining settlement requirements. Give the finance outcome to the solicitor or conveyancer before the contract deadline.
4. Complete loan and legal documents. Track signatures, identity checks and any lender requests. Confirm when insurance must start under the contract and loan requirements.
5. Reconcile settlement funds. Have the lender and conveyancer confirm their respective figures, including funds already paid. Arrange the buyer’s contribution through verified payment instructions before the required deadline.
6. Confirm completion. Obtain settlement confirmation and reconcile the final loan advance, buyer’s contribution and transaction costs to the settlement statement.

ANZ’s guidance, as at October 2026, lists the contract, updated financial position, valuation and building insurance before settlement as steps towards full approval. Those are ANZ’s requirements, so the broker must use the chosen lender’s own approval and settlement instructions.

Auction and Unconditional Contract Risks

An auction or unconditional contract can leave the buyer bound to purchase while property-based finance conditions remain open. The broker must clarify the assessed loan limit, open conditions and whether the lender has accepted the specific property.

In Victoria, Consumer Affairs Victoria says an auction contract can’t be subject to finance without the seller’s agreement. Get the buyer’s solicitor or conveyancer to explain the contract risk and local rules before bidding. Pre-approval alone doesn’t resolve a valuation shortfall or ensure the buyer can pay the auction deposit.

If the lender can’t complete a property check before the commitment, identify the remaining exposure and funds available to cover it. The buyer needs that information before deciding whether to proceed.

Check the Position After Settlement

Confirm that the loan and payment arrangements work as agreed after settlement. Record the first repayment date, amount and payment account, then confirm the buyer can access the loan information and any selected account features.

Reconcile the cash left over against the intended reserve. Update the household budget for council rates, insurance and maintenance, plus strata costs where relevant. Report an unexpected fee or account problem to the lender promptly.

Confirm what ongoing support the broker has agreed to provide, including a review date and how the buyer reports changed circumstances. Where assistance requires continued occupancy or other obligations, retain those requirements and their deadlines.

Selling early can affect assistance obligations or a shared-equity repayment. Read the applicable scheme terms before planning a sale, and involve the conveyancer and lender in that decision.

Coordinate the Buyer’s Professional Team

Give each professional a clear responsibility so finance and legal questions reach the right person. The mortgage broker arranges and explains finance options, while the conveyancer or solicitor handles the purchase’s legal and title work.

A buyer’s agent helps with property selection and negotiation within their agreed service. Building and pest inspectors assess the property within their inspection scope. Neither the selling agent nor a lender valuation replaces the buyer’s own contract advice or inspection work.

Consumer Affairs Victoria’s property-advice guide explains the roles of buyer’s agents and legal professionals. Use a professional authorised for the work in the property’s jurisdiction. Complex contract interpretation or a legal dispute needs a solicitor where it exceeds the conveyancer’s scope.

A First-Home Buyer Checklist for Handoffs

Use the actual contract dates in the checklist. The relative due dates below show where each handoff belongs, without inventing a standard finance period.

Handoff	Responsible person	Due date to record	Evidence of completion
Purchase budget and contribution	Buyer and broker	Before applying or offering	Budget reconciled to statements and confirmed contributions
Assistance assessment	Broker, buyer and relevant administrator	Before relying on assistance in an offer	Eligibility outcome and payment or reservation terms
Contract and title review	Solicitor or conveyancer	Before signing or bidding	Advice on conditions, title and deadlines
Valuation and lender conditions	Lender, followed up by broker	Before the finance deadline	Property acceptance and written condition clearance
Finance notice under the contract	Solicitor or conveyancer	Contract’s notice deadline	Required notice sent and retained
Loan documents and insurance	Buyer, lender and broker	Lender’s settlement cutoff	Accepted documents and required insurance evidence
Funds to complete	Buyer and conveyancer, with lender figures	Conveyancer’s funding deadline	Reconciled settlement statement and confirmed funds
Settlement and repayment setup	Conveyancer, lender and buyer	Settlement date and first repayment date	Settlement confirmation and payment arrangement

The broker can resolve what evidence a lender needs for finance. The solicitor or conveyancer interprets the contract’s finance clause and advises on notices. Send a required declaration to the responsible party using the first-home buyer declaration guide for that separate task.

Resolve Common First-Home Funding Problems

Resolve a funding problem by identifying whether the gap is cash, accepted income, property value or time. Each cause needs a different response.

The Deposit or Purchase Costs Fall Short

Recalculate the full budget before seeking another loan. In the fictional example, $75,000 of confirmed funds falls $10,000 short of the $85,000 target. Reducing the deposit requirement helps only if the new loan remains affordable and all purchase costs are covered.

Compare further savings, a lower purchase price and eligible assistance against the specific gap. A first-home buyer savings account holds the buyer’s money and earns interest under its account terms. It doesn’t create a grant, duty concession or government guarantee.

The First Home Super Saver Scheme has a different mechanism: eligible voluntary super contributions can be released towards a home deposit. Use the First Home Super Saver guide for release requirements and timing before counting those funds as available.

The Valuation Is Below the Purchase Price

Compare the proposed loan with the lender’s accepted value and maximum loan-to-value ratio (LVR). LVR is the loan expressed as a percentage of that value. A lower valuation can reduce the available loan even if the contract price stays the same.

Assume a fictional lender caps the loan at 90% of its valuation. On the example’s $600,000 value, that permits $540,000. If the valuation falls to $580,000, the maximum falls to $522,000, so the buyer’s contribution to the unchanged price rises by $18,000.

Keeping the other budget assumptions unchanged, the funds target rises from $85,000 to $103,000. Against $75,000 of confirmed funds, the gap is now $28,000. The broker must resolve that specific gap through accepted funds or a viable revised arrangement before treating finance as sufficient.

Self-Employed Income Needs More Evidence

Find the exact reason the lender can’t assess the income, then collect the missing records. A first-time buyer who is self-employed still needs to show sustainable repayment capacity. A low-deposit scheme doesn’t replace that assessment.

ANZ’s application checklist, as at October 2026, requests individual tax returns and notices of assessment for self-employed applicants. It also requests business tax returns and financial statements, with the applicable history and alternatives described in its checklist. Other lenders set their own evidence requirements.

Reconcile business drawings, tax figures and current trading before selecting another lender. The self-employed home loan guide covers that evidence task in detail.

The Finance Deadline Is at Risk

Before the deadline, ask the lender what remains outstanding and give the solicitor or conveyancer the exact position. They advise on the contract’s notice requirements and whether an extension can be requested. A pending extension request doesn’t establish that the seller has agreed.

For a deadline already missed or urgent concerns after signing, use the first-home buyer post-contract guide for the separate response. Finish the finance plan by confirming that approved funds cover the purchase, each condition has an owner and the required actions fit the contract dates.