First Home Buyer's Guide: From Saving to Settlement

The Journey to Your First Home¶

Buying your first home is one of the most significant financial decisions you will make. The process can feel overwhelming — from saving a deposit to navigating auctions and understanding settlement — but with the right preparation and guidance, it is entirely achievable. This guide breaks the journey into clear, actionable steps tailored to the Australian market in 2026.

Step 1: Understand Your Financial Position¶

Before you begin saving or searching for property, take an honest inventory of your finances:

• Income: Calculate your gross and net household income, including any regular bonuses or overtime.
• Expenses: Track your spending for at least three months to identify discretionary costs that could be redirected to savings.
• Existing debts: HECS-HELP, car loans, credit cards, and BNPL accounts all reduce your borrowing capacity. Pay down high-interest debts first and close any unused credit facilities.
• Credit score: Request a free credit report from Equifax, Illion, or Experian. Errors on your report can reduce your score and should be corrected before applying for a loan.

Apex Bank's online Borrowing Power Calculator provides an indicative maximum loan amount based on your income, expenses, and existing commitments.

Step 2: Save Your Deposit¶

The standard deposit is 20% of the purchase price, which allows you to avoid Lenders Mortgage Insurance (LMI). However, several pathways exist for buyers with smaller deposits:

• 5% deposit with the First Home Guarantee: The federal government guarantees the gap between your deposit and 20%, eliminating the need for LMI. Places are limited — apply early in the financial year.
• 10–15% deposit with LMI: LMI is a one-off premium (typically $8,000–$30,000 depending on loan size and LVR) that can be capitalised into your loan. While it adds to total borrowing costs, it allows earlier entry to the market.
• First Home Super Saver Scheme (FHSSS): Make voluntary pre-tax contributions to your superannuation fund (up to $15,000 per year, $50,000 in total), then withdraw them for a home deposit. The tax benefit can save you several thousand dollars compared to saving in a standard bank account.

At Apex Bank, our High Interest Savings Account offers a competitive rate for dedicated deposit saving, with no account-keeping fees and the flexibility to link the account to your everyday transaction account for automatic transfers.

Savings Strategies That Work¶

• Pay yourself first: Set up an automatic transfer to your savings account on payday, before discretionary spending occurs.
• Reduce your two largest expenses: Housing (consider a cheaper rental or house-sharing arrangement) and transport (public transport or a less expensive vehicle) typically offer the biggest savings opportunities.
• Bank windfalls: Direct tax refunds, work bonuses, and gifts directly into your deposit savings.
• Track progress visually: Set a savings target and track it monthly. Behavioural research shows that visual progress tracking significantly improves savings discipline.

Step 3: Get Pre-Approved¶

A home loan pre-approval (also called conditional approval) tells you how much a lender is willing to lend you, subject to valuation and final verification. Pre-approval is not mandatory, but it provides significant advantages:

• Confidence at auction: You know your upper limit and can bid with certainty.
• Faster settlement: Much of the documentation and assessment work is completed upfront.
• Negotiating strength: Sellers and agents take pre-approved buyers more seriously.

Apex Bank's pre-approval process typically takes 3–5 business days and is valid for 90 days. You will need to provide identification, proof of income (payslips or tax returns), evidence of savings, and details of any existing debts.

Step 4: Find Your Property¶

With pre-approval in hand, you can search with purpose. Consider the following factors:

• Location: Proximity to work, public transport, schools, and amenities. Research local council development plans that may affect future property values.
• Property type: Houses generally offer better long-term capital growth, while units can provide more affordable entry points and lower maintenance obligations.
• Building and pest inspections: Budget $500–$800 for a pre-purchase building and pest inspection. This is non-negotiable — structural issues discovered after purchase can cost tens of thousands to remediate.
• Strata reports (for units): Review the strata report for any outstanding special levies, disputes, or building defect claims. Budget $200–$350 for a strata search.

Step 5: Make Your Offer or Bid at Auction¶

In Australia, properties are sold either by private treaty (negotiated sale) or auction. Each requires a different approach:

Private treaty: You submit a written offer through the selling agent. There is typically a cooling-off period (5 business days in NSW, 3 in Victoria) during which you can withdraw, though a penalty of 0.25% of the purchase price may apply.

Auction: Bidding is unconditional — there is no cooling-off period, and the successful bidder is immediately bound by contract. Ensure your finance, inspections, and legal review are completed before auction day. Register to bid, set a firm maximum price, and do not let emotions drive you beyond it.

Step 6: Exchange and Settlement¶

Once your offer is accepted or you win at auction, the legal process begins:

1. Exchange of contracts: Your solicitor or conveyancer reviews the contract of sale and arranges exchange. You pay the deposit (typically 10%, with the balance funded by your loan).
2. Formal loan approval: Apex Bank conducts a property valuation and completes the final credit assessment. Keep your financial position stable during this period — do not change jobs, take on new debt, or make large unexplained deposits.
3. Settlement: Typically 30–90 days after exchange. On settlement day, the balance of the purchase price is transferred, legal title passes to you, and you receive the keys.

Step 7: Costs Beyond the Purchase Price¶

First home buyers are often surprised by the costs that sit on top of the purchase price:

Budget an additional 3–5% of the purchase price for these costs above your deposit.

Your First Year as a Homeowner¶

Congratulations — you have the keys. The first year of home ownership brings its own financial adjustments:

• Build an emergency fund: Aim for three months of mortgage repayments in a readily accessible savings account to cover unexpected repairs or income disruption.
• Review your insurance: Home and contents insurance is essential and is typically required by your lender. Shop around annually.
• Set up an offset account: An offset account linked to your Apex Bank home loan reduces the interest charged on your mortgage by the balance held in the offset. Every dollar in offset is effectively earning your home loan interest rate, tax-free.
• Make extra repayments early: Even small additional repayments in the first few years have a disproportionate impact on total interest paid over the life of the loan due to the compounding effect.

Apex Bank's first home buyer specialists are available to guide you through every step of this process. Book a consultation online or ask the Apex Concierge for an overview of our home loan products and current rates.

This guide is general information only and does not constitute financial advice. Consider your personal circumstances and seek independent advice before making financial decisions.