It’s one of the most common questions we’re hearing at the moment:
“Can first home buyers actually get into the market anymore?”
With property prices, interest rates and the cost of living all making headlines, it’s easy to assume that home ownership is out of reach unless you’ve saved a massive deposit.
But the reality may surprise you.
Many first home buyers still believe they need a 20% deposit before they can purchase a property. While that was once considered the gold standard, there are now several government initiatives and lender options that can help eligible buyers enter the market sooner with a much smaller deposit.
Let’s look at a real-world example.
A First Home Buyer Purchasing a $420,000 Apartment
Let’s assume a first home buyer purchases a one or two-bedroom apartment for $420,000.
What Deposit Would They Need?
Purchase Price: $420,000
5% Deposit: $21,000
Loan Amount: $399,000
Many buyers assume they need a 20% deposit, which would be $84,000.
However, eligible first home buyers may be able to purchase with as little as a 5% deposit, meaning they could potentially enter the market much sooner than they thought.
What About Purchase Costs?
As a first home buyer in Victoria purchasing under $600,000, you may be eligible for a full stamp duty exemption.
That’s a substantial saving.
Typical additional costs may include:
| Cost | Approximate Amount |
|---|---|
| Conveyancing / Legal | $1,200 – $2,000 |
| Building & Pest Inspection (if applicable) | $400 – $700 |
| Mortgage Registration & Transfer Fees | $400 – $500 |
| Adjustments / Miscellaneous | $300 – $1,000 |
| Total Costs | $2,300 – $4,200 |
Total Cash Required
Deposit: $21,000
Estimated Costs: Approximately $3,000
Total Savings Required: Approximately $24,000 – $26,000
Again, that’s a very different figure to the $84,000 many people believe they need before they can buy.
What Would the Repayments Look Like?
Based on a loan amount of approximately $399,000 over 30 years:
| Interest Rate | Monthly Repayment | Weekly Equivalent |
| 5.99% | Approximately $2,390 | Approximately $552 |
| 6.25% | Approximately $2,455 | Approximately $567 |
| 6.50% | Approximately $2,520 | Approximately $582 |
A good rule of thumb is that repayments would likely sit somewhere between $550 and $580 per week, depending on the lender and interest rate.
What Income Would Be Required?
This is another area where many people are pleasantly surprised.
Single Applicant
Assuming:
- No dependants
- Minimal existing debts
- Full-time employment
- Reasonable living expenses
A single applicant may require an income of approximately:
$75,000 – $85,000 per year
Many lenders would be comfortable assessing a loan of this size for someone earning around $80,000 per year, depending on their overall financial position.
Couple Purchasing Together
For a couple with no children, the numbers become even more achievable.
| Person 1 | Person 2 | Combined Income |
| $45,000 | $45,000 | $90,000 |
| $50,000 | $50,000 | $100,000 |
| $55,000 | $55,000 | $110,000 |
In many cases, a combined income of around $90,000 to $100,000 per year may be sufficient to support a loan of this size.
The First Home Guarantee Could Be a Game Changer
Eligible buyers may also qualify for the Federal Government’s First Home Guarantee Scheme.
The scheme allows eligible first home buyers to purchase with a 5% deposit and potentially avoid paying Lenders Mortgage Insurance (LMI), which can save many thousands of dollars.
Without the scheme, LMI may still apply, although some lenders allow this cost to be added to the loan.
This is why it’s important not to assume you’re ineligible before speaking with a broker.
Don’t Forget the Ongoing Costs
When buying an apartment, it’s important to look beyond just the mortgage repayment.
Many apartments and units have Owners Corporation (Body Corporate) fees, which help cover the maintenance and insurance of common areas such as lifts, gardens, hallways, pools and shared facilities.
Depending on the property, these costs can range from a few hundred dollars to several thousand dollars per year.
Before purchasing, buyers should always review the Owners Corporation information and factor these costs into their budget alongside:
- Home loan repayments
- Council rates
- Water rates
- Insurance (where applicable)
- Property maintenance
- Owners Corporation fees
While body corporate fees shouldn’t necessarily stop you buying a property, they are an important part of understanding the true cost of ownership.
So, Is It Possible?
For the right buyer, absolutely.
A first home buyer purchasing a $420,000 apartment may potentially be able to:
✔ Enter the market with approximately $24,000 – $26,000 saved
✔ Benefit from Victoria’s stamp duty concessions
✔ Access government support schemes that may reduce upfront costs
✔ Secure repayments of approximately $550 – $580 per week
✔ Qualify on a single income of around $75,000 – $85,000 or a combined household income of around $90,000 – $100,000
Of course, everyone’s circumstances are different, and borrowing capacity will depend on factors such as income, existing debts, living expenses, dependants, credit history and the property being purchased.
But the key takeaway is this:
Don’t let the belief that you need a 20% deposit stop you from exploring your options.
Many first home buyers are surprised to discover they may be able to enter the market sooner than they thought.
In fact, many people are currently paying similar amounts in rent each week without realising that owning a property may be closer than they think.
What Should You Do Next?
If buying your first home is something you’ve been thinking about, the first step isn’t necessarily finding a property, it’s understanding your position.
At Mynt Financial, we can help you determine:
- How much you may be able to borrow
- How much deposit you may need
- Whether you’re eligible for government schemes or concessions
- What your repayments may look like
- Which lenders may be the right fit for your situation
You may be closer than you think.
Even if you’re not quite ready to buy today, establishing your borrowing capacity and understanding your savings target can give you a clear plan and timeframe to work towards.
Reach out to the team at Mynt Financial for a chat and lets look deposit needed, borrowing power and help you make a plan! Your first home may be closer than you think.
Important Disclaimer
The information provided in this article is general in nature and does not take into account your personal objectives, financial situation or needs. The examples used are for illustrative purposes only and are based on assumptions that may not apply to your circumstances.
Eligibility for home loans, government schemes, interest rates and lender policies can vary significantly between lenders and may change over time. Borrowing capacity is influenced by a range of factors including income, existing liabilities, living expenses, credit history, employment type, number of dependants and other financial commitments.
The property itself may also impact lending eligibility. Factors such as property type, location, size, floor area, construction, postcode, high-density developments and lender-specific property policies can affect both borrowing capacity and available loan options.
Government grants, concessions and guarantee schemes are subject to eligibility criteria and availability at the time of application.
Before making any financial decisions, we recommend seeking personalised advice from a qualified mortgage broker who can assess your individual circumstances and help you explore the options available to you.
