What First-Time Buyers in 2025 Must Know Before They Apply

Buying your first home is a great decision to make one of your most favourite dreams come true. The Australian real estate scenario in the year 2025 is favorable for first-time property buyers. Supportive government incentives and anticipated cuts in 2025 make an encouraging environment for affordable home buying for a large community having limited savings. After deciding primary aspects of first home buying, like property type, location, amenities, neighborhood, etc., the biggest concern is the finance arrangement. Here, first-time buyers need to involve a knowledgeable, experienced, and proficient broker having dependable expertise as a mortgage broker, financial planner, debt consultant, and in other roles. Understanding current market conditions, realistic financial requirements, available financial options, and the process of getting adequate finance may help you plan better to buy your first home.

Real Estate Market Trends in 2025: Should You Buy Your First Property In 2025?

• With expected interest rates cut and housing demand outpacing supply, both first home buyers and real estate investors tend to capitalise on the evolving landscape.

• ‘Interest rates are expected to fall further, with a total 75-basis-point reduction from the Reserve Bank of Australia (RBA) by the end of 2025, following a 25-basis-point cut in February’- Westpac Housing Pulse March 2025.

• The Melbourne real estate market is expected to see some modest growth in 2025. For property buyers, the year 2025 might be the right time to invest.

• Home buyer sentiment rebounded to outright optimism in Victoria in March, with the Westpac Consumer Sentiment Index showing a 15.3 per cent jump to 106 points.

• ‘There is a strong surge of first-home buyers, upgraders ready to buy, and the buyers having pre-approved loans are going ahead with their planned purchases’- ASK Financials, a leading mortgage broker in Melbourne.

What is the Actual Cost of Home Buying?

Beyond the tagged property price, you need to consider lenders' mortgage insurance (LMI), stamp duty, legal fees, loan charges, and even moving costs. To help you know how much loan you need to buy your dream property, I am splitting the key costs with free-to-use tools.

• Deposit: Most lenders require a minimum 5% deposit plus processing costs, but contributing 20% or more helps you avoid Lenders Mortgage Insurance (LMI).

• Stamp Duty: The stamp duty amount depends on the location, property price, and your eligibility. As of 1 July 2024, additional fees include: Mortgage registration fee: $171, and Land transfer fee: $171.

• Lenders Mortgage Insurance (LMI): LMI applies if your deposit is less than 20%.

• Legal & Conveyancing Fees: You’ll need to pay legal professionals to conduct property checks, handle settlements, and review contracts.

• Loan Application & Processing Fees: Some lenders charge loan processing fees.

• Moving Costs: You pay for moving in your new property.

• Home Insurance Fees: Required by lenders to keep your property protected against damage.

• Council Rates & Strata Fees: This fee is applied on the purchase of properties located on some form of shared land or title like an apartment and townhouse.

• Mortgage Registration Fee: It is the fee charged by the state government to register the mortgage.

What Are the Incentive Schemes You Can Consider to Make the Home Loan Affordable?

• First Home Guarantee Incentive Scheme: The Government releases 35,000 First Home Guarantee places each year to financially support eligible first home buyers who have not purchased a property in the past 10 years to purchase a new or existing home with just 5% deposit. Details are available at First Home Guarantee.

• Family Home Guarantee Incentive Scheme: The Government offers 5,000 guarantee to financially support eligible single parents and legal guardians having at least one dependent child to buy their first home with just a deposit of 2%. Details are available at Family Home Guarantee.

• Regional First Home Buyer Guarantee Incentive Scheme: The Government offers 10,000 guarantees each year to financially support eligible applicants living in regional areas to buy their first home in a regional area with a deposit of 5%. Details are available at the Regional First Home Buyer Guarantee.

• First Home Owner Grant: Introduced in July 2000, the First Home Owner Grant (FHOG) scheme is a national scheme funded by the states and territories. A $10,000 First Home Owner Grant (FHOG) is available when you buy or build your first new home. Details are available at the First Home Owner Grant.

• First Home Loan Deposit Scheme: The First Home Loan Deposit Scheme is an Australian Government initiative to support eligible first home buyers purchase their first home with a deposit of as little as 5 per cent. Details are available at the First Home Loan Deposit Scheme.

Different states offer different incentives to first home buyers. For example, Victoria's first home buyer grants, schemes, incentives, and discounts include-

• Discounted stamp duty on properties between $600,000-$750,000.

• No stamp duty on properties under $600,000.

• $10,000 grant for new properties under $750,000.

• Discounted stamp duty on off-the-plan properties under $750,000.

What Should You Do Before Applying to Buy Your First Home?

With fact-based planning and well-considered decisions, it is easy to make your dream of homeownership a reality. So, how to start?

• Research The Market: Decide what type of home at which location you want to buy. This will guide your real estate market towards the fixed goals.

• Find Out What You Can Afford To Borrow: Find out what you can realistically afford to avoid mortgage stress. You can use an online borrowing calculator.

• Work Out Associated Costs: There are other costs associated with home buying than just the required deposit. You can use First Home Buyer Calculators to make informed decisions about your first home purchase and avoid financial strain in the long term.

• Create A Budget: Having a fixed budget helps you narrow down available options.

• Explore Home Loan Options: Not all home loans are designed equally. You’ll need to find the one that best suits your repayment capability.

• Get A Conditional Approval: Getting a home loan pre-approval from the best-appealing lender gives you a fine idea of how much you can borrow and repay without stress.

• Engage an Expert Mortgage Broker: For a smooth-sailing first home buying experience, be sure to engage an expert mortgage broker.

How ASK Financials May Help You Get the Best Home Loan for Your First Home

Despite knowing the available home loan options, choosing the best affordable first home loan, and maximizing the benefits of the first home buying incentive scheme often becomes a complex and challenging task.

ASK Financials is a leading mortgage broker in Melbourne, Australia, with decades of experience. Tailored-to-need ‘First Home Buyer’ support and assistance help first home buyers in Bentleigh access government grants and incentives and leverage the advantages. The knowledgeable mortgage experts help you understand the eligibility criteria and application process for the selected scheme. The experienced first home loan specialists guide you across the application process to secure the right loan in a seamless manner. What to know more about? Book your free chat or call 0433 944 055.