First Home Buyer Checklist in Australia: Deposits, Grants & Costs

If you are trying to work out whether you can actually afford your first home, you are not alone. Many first home buyers in Queensland and across Australia are financially responsible, earning stable incomes, and still unsure how lenders will assess them under today’s lending rules.

Interest rate buffers reduce borrowing power. Living expense benchmarks affect serviceability. Credit card limits matter more than balances. Government schemes have strict income and price caps. Small details can change outcomes.

This First Home Buyer Checklist in Australia is designed to help you understand what lenders are really looking for in the current market. It explains deposit strategy, borrowing capacity, pre-approval, grants, and hidden costs with practical insight drawn from real broker experience. 

If you are researching how a first home buyer mortgage broker works, or comparing options with local mortgage brokers in the Sunshine Coast, this guide will help you approach the process with structure and clarity.

All lending decisions remain subject to individual assessment. Policies, documentation requirements, and eligibility criteria vary between lenders and may change without notice.

Understanding Today’s Lending Environment Before You Start

Before reviewing deposits or grants, it is important to understand how lenders assess risk in the current Australian market.

Most lenders apply:

• A serviceability buffer above the actual interest rate
• Detailed living expense verification
• Assessment of all credit limits, not just balances
• Conservative treatment of variable income

The buffer applied is guided by prudential standards. This means even if the advertised rate looks manageable, your application is assessed at a higher rate to test affordability.

It is common for first home buyers to be surprised by this difference. Borrowing capacity calculators do not always reflect how a lender interprets income, liabilities, and risk.

Understanding this framework early can help you plan realistically.

Step 1: Confirm You Meet the First Home Buyer Definition

A lot of first home buyers assume eligibility is straightforward, then later discover a grant, concession, or scheme does not apply to them. It usually comes down to how “first home buyer” is defined for that specific program, and the definition can differ between state concessions, state grants, and federal schemes.

What usually counts as a “first home buyer”

For most programs, you generally need to meet two broad tests:

• Ownership history, whether you have ever held an interest in a home before
• Owner-occupier intention, whether you will live in the property as your principal place of residence

In Queensland, the Queensland Revenue Office explains that eligibility tests can include whether you or your spouse has previously owned residential property, and whether you meet the residency rules after purchase.

The part many buyers miss: spouse and prior interests

Many schemes assess eligibility based on you and your spouse. This can include a spouse who is not on the loan or not on title, depending on the program’s rules. If a spouse has previously owned a property, that may affect eligibility even if you have never owned one.

Also, “ownership” is not always limited to having a mortgage. It can include having held an interest in a residence, including joint ownership. Queensland’s transfer duty concession guidance outlines how broad “interest in a residence” can be.

Owner-occupier rules are not just a formality

For Queensland incentives, there are typically timing rules around when you must move in, and consequences if you do not. For example, for the Queensland First Home Owner Grant, you generally must move into the home within a stated period and meet minimum occupancy requirements.

As brokers, we treat this step as a non-negotiable starting point. If your plan is not aligned with owner-occupier requirements, it is better to know early, before you base your deposit strategy on a grant or concession you may not be able to keep.

Step 2: Deposit Planning With a Risk-Based Mindset

Deposit planning is not only about hitting a percentage. Lenders assess deposit risk by looking at the loan-to-value ratio, the source of funds, and whether you still have a cash buffer after settlement.

Deposit size changes the whole risk profile

As a general rule:

• The smaller the deposit, the higher the lender’s risk exposure
• That can affect LMI, policy options, and sometimes pricing tiers depending on the lender

Even where a low-deposit pathway exists, lenders still test whether you can comfortably manage repayments at their assessment rate, and whether you have funds left after purchase for unexpected costs.

What “genuine savings” is really about

Some lenders want to see that you can build and hold savings consistently, not just receive a lump sum. That can mean:

• Regular savings patterns over time
• Stable account conduct, no repeated overdrafts or payday-style spending cycles
• Evidence the deposit is not being funded by undisclosed debt

Some lenders may accept rent history in lieu of traditional savings patterns, but policy can vary.

Gifts, inheritance and “non-repayable” funds

If family is helping, lenders usually want a clear paper trail. Most commonly, that means:

• A signed gift letter confirming that the funds are not repayable
• Evidence of the funds leaving the donor’s account and arriving in yours
• Clear separation from any personal loan arrangements

This matters because undisclosed repayments can change serviceability.

LMI is not only about cost, it’s also about flexibility

If you borrow above 80% of the property value, LMI commonly applies. That may be payable upfront or capitalised into the loan, depending on the lender and scenario.

When planning, it helps to think of LMI as part of the “entry cost” of buying sooner with a smaller deposit, rather than only a penalty. The real question is whether the overall plan remains workable once you include:

• LMI impact on loan size
• Higher repayments due to a larger loan
• A buffer for settlement and moving costs

Step 3: Borrowing Capacity Beyond Online Calculators

Online calculators can be useful for a starting estimate, but lenders calculate borrowing capacity using their own assessment rules. In practice, approval outcomes often hinge on how a lender interprets risk, not just how much you earn.

The part lenders care about most: serviceability at the assessment rate

Even if the actual repayment looks affordable, lenders test whether you can afford repayments at a higher assessment rate. This is where many first home buyers get caught out.

In our process, we focus on what the lender will actually use, not what looks good on a calculator. That means we look at income shading, expense benchmarks, and how each lender treats liabilities.

Income is rarely assessed at a simple 100%

Lenders often assess:

• Base PAYG income more straightforwardly
• Variable income (overtime, allowances, bonuses, commission) using averaging, minimum history, or shading
• Casual and contract income based on consistency and evidence, with rules varying by lender
• Self-employed income using taxable income and add-backs, usually supported by tax returns and financials

Living expenses are assessed using benchmarks and reality checks

Lenders typically compare your declared expenses with a benchmark measure, then apply the higher figure. They may also review statements to confirm that spending patterns align with what has been declared.

This is why “cutting back for one month” does not always translate to improved borrowing capacity. Lenders tend to look for patterns and consistency.

Credit cards and BNPL can reduce borrowing power even if “you don’t use them”

A common surprise is that lenders assess credit cards based on the limit, not the balance. A card you never use can still reduce serviceability.

BNPL is also assessed by many lenders, and some lenders may request BNPL accounts be closed or limits reduced before unconditional approval, depending on policy.

Borrowing capacity is less about a single number and more about the interaction between:

• assessed income
• benchmarked expenses
• credit limits and liabilities
• assessment rate and buffer
• lender policy interpretation

That is why lender selection often matters as much as the numbers.

Step 4: Pre-Approval With Realistic Expectations

Pre-approval is useful, but only if you understand what it does and what it does not do.

What pre-approval usually means

Most pre-approvals are conditional. They are an indication that, based on the documents reviewed at that time, the lender may be willing to lend up to a certain amount. It still depends on:

• the property meeting the lender’s requirements
• valuation supporting the purchase price
• updated payslips and statements
• no changes in your financial position

What commonly causes pre-approval to fall over

In real-world applications, common issues include:

• New debts or increased credit limits after pre-approval
• A change in job status or reduced hours
• Unusual account conduct showing up in updated statements
• A valuation coming in below the purchase price
• The property not meeting lender security policy

This is why we treat pre-approval as a planning tool, not a green light to stretch your budget.

What to prepare so pre-approval is actually useful

A strong pre-approval file usually includes:

• clean evidence of deposit and savings history
• stable income documentation
• a clear list of liabilities that matches credit reports and statements
• realistic living expenses that align with statement conduct

When those pieces are consistent, the later steps usually run smoother.

Step 5: Government Grants and Schemes in Queensland

Queensland has multiple pathways that may help eligible first home buyers, but each has distinct rules. It’s common for buyers to mix up a grant, a duty concession, and a federal guarantee scheme, even though they work very differently.

Queensland First Home Owner Grant: what it applies to

Queensland’s First Home Owner Grant is generally for new homes, including substantially renovated homes, subject to criteria.

Queensland Revenue Office states the grant amount is $30,000 for eligible transactions between 20 November 2023 and 30 June 2026 (for owner-builders, the relevant date is when foundations are laid). The value of the home, including land and variations, must be less than $750,000.

Queensland transfer duty concessions: separate to the grant

For established homes, the first home concession applies to properties valued under $800,000, with a full exemption available for homes up to $700,000. Eligibility includes occupying the home as your principal place of residence within required timeframes.

National guarantee schemes: different again

Housing Australia administers national Australian Government 5% Deposit Scheme options. These are separate to Queensland’s FHOG and duty concessions.

Since 1 October 2025, Housing Australia has applied expanded access and higher property price caps. Price caps are location-specific and should be checked against the official tools.

The practical takeaway here is this. Your strategy should not rely on a scheme until you have confirmed:

• you meet the eligibility tests
• the property falls under the cap
• the participating lender can process that pathway
• the timing aligns with your contract and settlement plans

Step 6: Hidden Costs That Affect Cash Flow

First home buyers often budget for a deposit and forget the “transaction stack” that sits around it. Lenders do not just look at whether you have a deposit. They also look at whether you will be left with enough funds after costs to remain financially stable.

Costs that can apply before settlement

Common costs include:

• Building and pest inspection fees for established homes
• Conveyancing or solicitor fees
• Loan application or settlement fees, depending on the lender
• Government registration fees
• Adjustments at settlement (for rates and water), depending on timing

Some of these costs occur before settlement, which means your “available funds” can shrink quickly if you do not plan for them.

Costs that start straight after settlement

Once you own the property, costs can begin immediately:

• Insurance
• Council rates and utilities
• Body corporate levies if applicable
• Repairs and maintenance
• Moving costs, connection fees, and initial setup

A practical approach is to plan for a cash buffer that covers early ownership costs, not only the deposit.

Step 7: Contract Conditions and Settlement in Queensland

Queensland has its own contract process and statutory protections that first home buyers should understand early, especially if you are coming from information written for other states.

Cooling-off period in Queensland

Queensland Government guidance confirms a 5 business day cooling-off period applies to residential property contracts, with specific rules about when it starts and ends. This is also supported in Queensland legislation.

Cooling-off does not apply in every situation, such as certain auction-related scenarios, and contract terms can matter. This is why legal advice is essential before you sign.

Finance and building and pest clauses

In Queensland, it is common for contracts to include finance and inspection clauses. These clauses set timeframes, and missing a due date can create risk.

In practice, it helps to treat contract dates as fixed project deadlines. Once you sign, everything becomes time-sensitive.

Typical settlement timing

Settlement timeframes vary by contract, but many Queensland contracts settle within 30 to 60 days. Your conveyancer and lender coordinate settlement steps, but delays can still occur if documents or conditions are not completed on time.

Step 8: Structuring Your Loan Thoughtfully

Loan structure is often where first home buyers can improve resilience. The goal is not to “pick a product”, it is to choose a structure that suits how you get paid, how you budget, and how you manage uncertainty.

Variable, fixed, or split: how brokers think about it

In general terms:

• Variable rate loans may offer flexibility, including extra repayments and features like offset or redraw, depending on the lender
• Fixed rate loans can provide repayment certainty for a set term, but may limit extra repayments and can involve break costs if you change the loan early
• Split loans can combine both, which some borrowers use to balance certainty and flexibility

The right structure depends on priorities. Not everyone benefits from the same features, and lender rules vary.

Offset vs redraw: not the same thing

Many borrowers assume they are interchangeable.

• Offset accounts can reduce interest by offsetting the loan balance, but may come with package fees depending on the lender
• Redraw lets you access extra repayments, but access can be subject to the lender’s rules and processing

We usually explain this in practical terms. If you need easy access to funds for predictable costs, an offset may suit. If you want a simpler setup and are comfortable with lender-controlled access rules, redraw might be enough. It always depends on the product.

Step 9: Mistakes That Can Affect Approval

Many first home buyers do the hard work saving a deposit, then accidentally undermine their application in the final stretch. Most of these mistakes are preventable once you understand what lenders monitor.

High-impact mistakes lenders notice quickly

Common issues include:

• Increasing credit card limits, even if you do not use them
• Taking out a personal loan or car finance after pre-approval
• Starting BNPL accounts during the assessment period
• Changing jobs or reducing hours, especially close to formal approval
• Missing or inconsistent information across documents and statements

The quiet risk: “it’s only temporary”

Lenders assess based on evidence. Temporary changes can still appear in statements, and they may still affect serviceability.

That is why we encourage a “financial freeze” mindset between pre-approval and settlement. Keep everything stable unless you have checked how a change may be assessed.

Working With a First Home Buyer Mortgage Broker

As a first home buyer mortgage broker, we focus on policy alignment rather than just headline interest rates.

We assess:

• Which lenders treat your income type favourably
• How liabilities are calculated
• Eligibility for relevant schemes
• Whether your deposit structure meets policy requirements

If you are comparing options with local mortgage brokers in the Sunshine Coast, we also work with buyers throughout Queensland and Australia-wide via phone and online consultations.

Our role is to explain lender differences clearly, outline documentation expectations, and manage the process from pre-approval to settlement.

A Structured First Home Buyer Checklist Before Exchange

Before you exchange contracts or go unconditional, here is a short list that can help reduce avoidable surprises.

Your money and documents

• Deposit funds are in the right place, traceable, and available when required
• You have allowed for inspections, legal fees, and settlement adjustments
• Your statements reflect consistent conduct and match what you have declared

Your loan position

• Pre-approval is current and the lender still supports your scenario
• Your liabilities list matches your credit report and statements
• You have not applied for new credit or increased limits

Your property and contract position

• Your conveyancer has reviewed the contract and special conditions
• Your finance and inspection dates are diarised and achievable
• You understand the cooling-off rules that apply to your situation in Queensland

Making Your First Home Purchase Feel More Manageable

First home buying can feel complex because there are several moving parts happening at once. A checklist helps because it keeps your deposit, your borrowing position, your scheme eligibility, and your contract timeframes aligned, so you are less likely to be caught out when finance becomes time-sensitive.

If you’d like to understand what options may be available, our brokers at Ausfirst Lending Group can help you compare lender policies and guide you through the process with clarity and structure, including if you are speaking with a first home buyer mortgage broker Australia-wide or looking for local mortgage brokers in the Sunshine Coast.

Disclaimer: This information is general in nature and does not constitute personal financial advice. Lending criteria, government scheme eligibility, interest rates, and product features vary between lenders and may change without notice. You should consider your personal circumstances and seek appropriate professional advice before making financial decisions.

Frequently Asked Questions (FAQs)