Lesson 4.6

5 small steps to buy your first home


Buying your first home is one of the most common financial goals – and for good reason.

Owning a home to live in can provide a valuable sense of stability and an end to rental increases. Once paid off, it can provide a secure place to live – rent free – in retirement. 

Home ownership also comes with a range of costs to consider, but for generations, owning your home and paying it off has been the cornerstone of a comfortable retirement.

Declining housing affordability relative to incomes has driven many young Australians to question if home ownership is still a viable pathway to financial security.

So, if you’re looking to make the journey, here are five small steps to check how you can get on the property ladder.


Step 1. Work out how much you can borrow 

Ultimately, what you can afford to buy will depend on your ability to service any loan you must take out to buy your property.

Your lender will assess how much surplus cash flow you have to meet your potential mortgage repayments by deducting your regular living expenses from your regular income.

Keep a budget and monitor your expenses as you will need to answer questions about what your living expenses are.

There are many online calculators to help you. The CommBank Borrowing Power Calculator asks you for information about your income, expenses and other credit commitments to provide an estimate.

You can also book in with a home lending specialist to discuss your property goals. It is never too early to speak to a lender about your home buying goals. They are there to answer your questions and support you on your home buying journey – obligation free.

Step 2. Know the government support available

In recent decades, governments have attempted to help first home buyers into the market with a range of grants and concessions. Consult your local state or territory government website for information on first home buyer grants and concessions.

The federal government also offers schemes to help buyers purchase their homes with deposits below 20% and avoid paying Lenders Mortgage Insurance. The Family Home Guarantee for single parents enables eligible borrowers to secure their family home with a deposit of as little as 2%. Find more information on Home Guarantee Scheme.

Parents are also able to help their children into the property market with a smaller deposit by going ‘guarantor’ on part of their loan. Talk to your home lending specialist about your options.

Finally, the federal government’s First Home Super Saver Scheme enables you to save your deposit in the low tax environment of super. For the latest information on the screen, visit the Tax Office website.

Step 3. Do your property research 

Once you have an idea of what you can borrow, it’s time to go shopping! Consider your non-negotiables in a property and attend a range of open houses to see what your money will buy. Consider what you may be willing to compromise on, whether it’s backyard space or living a few suburbs further out to achieve your property dream.

Websites like realestate.com.au can provide you with up-to-date property listings. The CommBank Home Hub in the CommBank app also provides guidance, tools and insights to help you all the way through your home buying and ownership journey.

Step 4. Set a target amount for your deposit

People often believe you must have a 20% deposit to buy your first home. This is a great goal to aim for, but it is not necessary to secure your foot on the property ladder.  

However, if you do have a deposit smaller than 20%, you will be charged a fee called ‘Lenders Mortgage Insurance’ (LMI), which helps protect the lender in the event you are unable to pay your loan. LMI can be added to your loan amount and paid off over the life of your loan. Alternatively, you may be able to avoid LMI by participating in one of the government’s Home Guarantee Schemes or by arranging for a family member to support as a Guarantor on your loan. Speak to a lender about your options.

Step 5. Apply for pre-approval

Once you think you are in a good position to start your home loan and bid for your first home, be sure to talk to your home lending specialist to secure conditional pre-approval and choose the right loan type for you. 

This can give you the confidence to know how much you can confidently bid and borrow.

Once you are successful in securing a property, your home lending specialist will help you navigate the process all the way to settlement and collecting the keys to your very first home.

No matter how prepared you think you are, the home buying process can be an emotional and overwhelming time, so don’t be afraid to ask for support along the way.  


Congratulations, you’ve completed this lesson!

Next lesson: 4.7 - 5 simple steps to an investment property

Things you should know

  • This page provides general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as personal financial product advice. As the information has been provided without considering your objectives, financial situation or needs, you should, before acting on this information, consider if it is appropriate to your circumstances. You should also consider whether seeking independent professional legal, tax and financial advice is necessary.