Buying your first home is a big learning curve. Here are the 10 most common mistakes Australian first home buyers make — and how you can avoid them.
1. Not Getting Pre-Approval First
The mistake: Falling in love with a property before knowing how much you can borrow.
How to avoid it: Get pre-approval from a lender before you start house hunting. It shows you what you can afford, makes your offers stronger, and prevents heartbreak.
2. Underestimating Upfront Costs
The mistake: Only saving for the deposit and forgetting about stamp duty, legal fees, inspection costs, moving costs, and emergency repairs.
How to avoid it: Budget for these additional costs on top of your deposit:
- Stamp duty: $5,000–$50,000 (check concessions you may be eligible for)
- Conveyancing/solicitor: $1,000–$3,000
- Building & pest inspections: $500–$1,000
- Loan application/valuation fees: $0–$1,000
- LMI (if applicable): $5,000–$30,000
- Moving costs: $500–$2,000
- Council rates adjustment: $500–$1,500
3. Not Researching Government Schemes
The mistake: Applying for a standard home loan without checking if you qualify for schemes like the First Home Guarantee (5% deposit, no LMI) or state-based grants.
How to avoid it: Spend an hour going through all available federal and state schemes. You could save $10,000–$40,000+.
4. Skipping Building and Pest Inspections
The mistake: Waiving inspection conditions to make your offer more attractive, then discovering major issues after settlement.
How to avoid it: Always get a professional building and pest inspection. A $500 inspection could save you from a $50,000 structural repair bill.
5. Borrowing to Your Maximum Limit
The mistake: Taking out a loan for the maximum the bank offers you, leaving no room for rate rises, maintenance, or life changes.
How to avoid it: Borrow less than the maximum. Aim for repayments no more than 30% of your income. Leave a buffer for interest rate rises (they can add $500+/month to repayments).
6. Ignoring the Location and Lifestyle
The mistake: Buying a cheaper property far from work, family, and amenities — then burning out on commuting costs and time.
How to avoid it: Factor in commute time, transport costs, proximity to supermarkets, schools, and healthcare. A cheaper home in a bad location can cost you more in the long run.
7. Not Understanding the Type of Loan
The mistake: Choosing a loan based only on the lowest interest rate without comparing fees, features, or flexibility.
How to avoid it: Use our home loan guide to compare fixed vs variable, offset accounts, redraw facilities, and comparison rates.
8. Making Emotional Decisions at Auction
The mistake: Getting caught up in auction bidding and paying tens of thousands more than the property is worth.
How to avoid it: Set a hard limit before the auction. Take someone level-headed with you. If the bidding goes past your limit, walk away — there will always be another property.
9. Forgetting About Future Needs
The mistake: Buying a 1-bedroom apartment when you plan to have kids in 3 years, or buying without thinking about resale value.
How to avoid it: Think about your needs 5–10 years from now. Even if you're single now, consider what would make the property easy to sell or rent out later. Features like parking, storage, and orientation matter.
10. Not Using a Mortgage Broker or Conveyancer
The mistake: Going directly to one bank without comparing options, or handling the legal work without a professional.
How to avoid it: Use a mortgage broker (they compare dozens of lenders and cost you nothing — they're paid by the lender). Hire a conveyancer or solicitor to handle contracts, searches, and settlement. Their fee ($1,000–$3,000) is worth the peace of mind.
Related Guides
- Step by step: from pre-approval to settlement
- How to choose a home loan
- How to save a deposit faster
- Which state is cheapest?
General information only. Always seek professional advice tailored to your personal situation.