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Buying a house

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Buying a house is an exciting time. We'll step you through the process, so you know what to expect. 

Save for a house deposit

The first step in the house buying process is getting your finances sorted. Do a budget to identify how much you can afford to save towards your deposit.

Next, do some research on house prices. Getting a general idea of property prices will help you set a savings goal to work towards. 

A good savings goal for a house deposit is 20% of the purchase price, plus enough to cover buying costs such as stamp duty, legal fees and inspections. A 20% deposit can help you avoid paying mortgage insurance.

If saving 20% will take you too long, you may be able to buy a house with a smaller deposit (and still avoid lenders mortgage insurance). See ways to buy a home sooner for different options.

See save for a house deposit for more about how much you'll need to save, and ways to save faster.

Work out what you can afford to borrow

Everyone's situation is different. How much you can afford to borrow depends on your:

The amount a lender is willing to lend isn't always the amount you'll feel comfortable borrowing. Think about what repayments would mean for your day-to-day spending and future goals. 

To give yourself some breathing room, calculate what your repayments would be if interest rates increased by 2%. You can use our mortgage calculator to work out your home loan repayments and compare different rates. 

Use the mortgage calculator

Compare home loans

When looking for a good deal on a home loan, the interest rate matters. A home loan is a long-term debt, so even a small difference in interest adds up over time.

Compare home loan rates, fees and features

Contact at least two different lenders to get loan options tailored to your situation. A rate that’s 0.5% lower could save you thousands of dollars over time. But it’s also worth comparing fees, features and flexibility. See choosing a home loan.

Comparison websites can be useful, but they are businesses and may make money through promoted links. They may not cover all your options. See using comparison websites to learn what to look out for. 

With many lenders to choose from, you may decide to get a mortgage broker to find loan options for you. See using a mortgage broker for tips on what to ask your lender or broker.

Get pre-approval to buy

Consider getting loan pre-approval from a lender. They'll ask for evidence of your financial situation to assess your ability to repay the loan.  

Pre-approval lasts 3 to 6 months and shows how much you may be able borrow.  It can help you set an affordable price range and show  sellers you're serious about buying. But it doesn’t commit you to the loan.  

Keep in mind that pre-approval does not guarantee you'll get the loan. The lender will still assess your circumstances and the property before giving final approval. 

How offset accounts work

Find a house to buy

Know why you're buying

Find a balance between the lifestyle you want and what you can comfortably afford. Think about why you want to buy.  

Are you planning to grow your family? Do you want a home to renovate? Do you need to be close to work, schools or public transport? If you're buying with someone else, talk about your priorities together.  

Being clear about why you're buying helps narrow down your property search. 

Consider your must-haves and nice-to-haves

Make a list of your: 

Focusing on your must-haves helps prioritise the things that matter most. 

As you inspect properties, think about the condition of the home, likely maintenance costs, and whether it will suit your future needs.

Stick to your price range

If you’ve been pre-approved for $600,000, don't waste time looking at properties advertised at $700,000. 

If your ideal suburb is outside your price range, keep an open mind about where to look. You may find a nearby suburb or different property type that suits your budget and lifestyle. 

Look online, talk to real estate agents, go to property inspections and explore what's on offer. Pace yourself.  Finding the right property can take time.

Negotiate to buy your house

Finding a house you love is exciting, so it's easy to get carried away.  Stick to your budget and be as clear-headed as possible when bidding or negotiating. 

Auction or private treaty

If you're a first home buyer, observe a few auctions so you understand how they work. You may also decide to bring an experienced friend or family-member along, or use a buyer's advocate to help with the process.

If you’re buying at auction, expect to pay a deposit immediately (for example, 10% of the purchase price). There's generally no cooling-off period, which means the sale is final and not subject to finance or a building or pest inspection.  

If buying privately, the contract of sale will include the deposit amount and when you need to pay it. There's a short cooling-off period in most states and territories. You can usually get out of the contract and get most of your deposit back if you give written notice. 

Contract of sale

The seller (vendor) of a property will prepare a contract of sale. First inspect the property and talk to the real estate agent or seller. Then, ask to see the contract of sale.  

Before signing,  ask a solicitor or conveyancer to review the contract before signing. They can explain your rights and obligations, identify potential risks and help avoid costly mistakes. 

Make an offer

When you're ready, there are two ways of making an offer:

Building and pest inspection

Once you've found a property you like and made a conditional offer, use the cooling off period to arrange a building and pest inspection. This could save you a lot of money down the track. 

A building inspection looks for structural issues, damp, electrical safety concerns, and maintenance or repair costs. A pest inspection looks for termite activity and other pest issues. 

If you're planning to bid at auction, you may be able to arrange these inspections before the auction. 

As soon as you've made an offer, tell your lender you've found a property and apply to finalise your loan. 

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Settle on your new home

You're on the home stretch now, with a few more costs to take care of before you can move in.

Settlement

The settlement date is when ownership of the property transfers into your name and your mortgage begins. 

The contract of sale sets out the settlement period and when you need to pay the full purchase price. Your solicitor or conveyancer will finalise the settlement with the lender and seller.  

Once settlement is complete, you'll get the keys to your new home. 

Stamp duty

Stamp duty is a one-off state or territory government -transfer tax.  

You typically need to pay this within 30 days of settlement. How much you pay depends on where the property is located, it’s value and your circumstances. 

If you're a first home buyer, check whether you're eligible for an exemption, rebate or concession. 

Find out how much you have to pay by using one of these calculators: 

Home and contents insurance

Protect your home and contents against damage or loss. This may be a condition of your home loan.

See home insurance to learn more about your options. And learn about the risks of underinsurance. 

Finally, update your budget with your mortgage repayments and other ongoing costs, such as council rates, utilities and maintenance. Extra expenses may take time to get used to, so keep an eye on your spending for a while. See pay off your mortgage faster for tips on how to stay on track.