First Home Buyer Checklist: What to Prioritise in NSW

Your deposit size determines which support schemes you can access and whether you'll pay Lenders Mortgage Insurance.

Most of the decisions you'll make when buying your first home in NSW flow directly from how much you've saved. That number opens or closes doors to government schemes, affects your interest rate, and shapes your borrowing power. Understanding exactly where your deposit sits and what options that creates for you should be your first priority, not the last thing you calculate before speaking to a lender.

How Your Deposit Connects to Government Support

If you have a 5% deposit saved, you may qualify for the Regional First Home Buyer Guarantee or the First Home Guarantee, both of which let you avoid paying LMI on properties up to certain price caps. NSW also offers stamp duty concessions for first home buyers purchasing properties under the relevant threshold, which can save you thousands of dollars upfront.

Consider a buyer who saved $45,000 to purchase in the Central Coast area. With property prices around $700,000 in some suburbs, that represents just over 6% of the purchase price. Under the Regional First Home Buyer Guarantee, they could proceed without paying LMI, which would otherwise add approximately $20,000 to their upfront costs. They also qualified for full stamp duty exemption because the property value sat under the NSW threshold. The combination meant they could keep their remaining savings for furniture, moving costs, and maintaining a buffer after settlement.

Pre-Approval Timing and What It Actually Tells You

Getting pre-approval before you start seriously looking at properties gives you a firm borrowing limit and shows sellers you're a committed buyer. Pre-approval typically lasts three to six months, depending on the lender, and locks in your borrowing capacity based on your current financial position.

Your income, existing debts, living expenses, and deposit amount all feed into this calculation. If you're relying on the First Home Super Saver Scheme to boost your deposit, make sure those funds are withdrawn and available before applying for pre-approval, as lenders need to see the money in your account.

Interest Rate Structure and Your Monthly Commitments

You'll need to choose between a variable interest rate, a fixed interest rate, or a split between both. Variable rates move up or down with the market, which means your repayments can change. Fixed rates lock in your repayment amount for a set period, usually between one and five years, giving you certainty but less flexibility if rates drop.

Many first home buyers in our experience benefit from splitting their loan, fixing a portion for budgeting certainty while keeping another portion variable to take advantage of features like an offset account or redraw facility. An offset account is a transaction account linked to your home loan where the balance reduces the interest you're charged. If you have $20,000 in your offset account and owe $500,000 on your loan, you only pay interest on $480,000.

Understanding Your First Home Loan Application Requirements

Lenders assess your application based on proof of savings, employment stability, credit history, and your ability to service the loan at a higher interest rate than the current market rate. They'll request payslips, bank statements going back three to six months, identification documents, and details of any other debts or financial commitments you hold.

If you're receiving a gift deposit from family, you'll need a signed declaration confirming the funds are a genuine gift and not a loan that needs to be repaid. Most lenders accept gifted deposits, but they want to ensure your servicing calculations remain accurate and that you're not taking on hidden debt.

Low Deposit Options Beyond the Government Guarantees

If you don't qualify for a government guarantee scheme, you can still purchase with a 10% deposit by paying LMI. Some lenders also offer products with LMI built into the loan rather than paid upfront, which preserves your cash for other settlement costs. Another option is a guarantor loan, where a family member uses equity in their own property to support your application, potentially allowing you to borrow with a smaller deposit or avoid LMI altogether.

In a scenario like this, a buyer purchasing in Western Sydney with an $80,000 deposit on an $800,000 property would normally pay around $24,000 in LMI. If a parent agreed to guarantee $100,000 of the loan using equity in their paid-off home in Penrith, the buyer could avoid that LMI cost entirely while still maintaining full ownership of their new property. The guarantee can be removed once the buyer builds enough equity through repayments and property value growth.

What to Confirm Before You Sign Anything

Before committing to any home loan, confirm whether your loan includes monthly or annual fees, what the break costs are if you exit a fixed rate early, and whether you can make extra repayments without penalty. Ask about rate discounts for specific professions or for maintaining your salary in an account with that lender. Some lenders offer ongoing discounts if you package your home loan with other products, though you should calculate whether those discounts deliver actual value or just add unnecessary accounts.

Understanding your first home buyer eligibility for grants and concessions in NSW is also worth confirming with your broker before you make an offer, as these can affect your overall budget and purchasing strategy. Missing out on a scheme you qualified for simply because you didn't apply in time is entirely avoidable.

You're making one of the biggest financial decisions of your life, and there's no need to rush through it or figure it out alone. Call one of our team or book an appointment at a time that works for you, and we'll walk through your situation, your deposit, and the first home owner grants and schemes you qualify for. Every buyer's position is different, and the right structure for your loan should reflect where you are now and where you're heading.

Frequently Asked Questions