Buying your first home? Don’t fall for these 4 common traps.

Buying your first home is a huge milestone and thanks to the expanded Australian Government 5% Deposit Scheme, it’s now more achievable than ever.

From 1 October, eligible first-home buyers can purchase a property with just a 5% deposit and no lenders’ mortgage insurance (LMI). That’s a big saving, and it’s expected that around 70,000 Australians will take advantage of the scheme in its first year.

With fewer barriers to entry and significant savings on upfront costs, the 5% Deposit Scheme is opening doors for thousands of first-home buyers across the country.

Ready to take the first step? Talk to us today and find out if you qualify.

But before you jump in, here are some common mistakes to avoid.

What is the 5% Deposit Scheme?

The scheme, formerly known as the Home Guarantee Scheme, helps first-home buyers get into the market sooner. Here’s how it works:

• You only need a 5% deposit
• The government guarantees the remaining 15%, so you don’t have to pay LMI
• Price caps have increased, and there’s no limit on the number of applicants

For example:

• In Sydney, you could buy a $1.5 million home with a $75,000 deposit
• In Melbourne, a $950,000 home would need just $47,500 upfront

4 Common first-home buyer mistakes

1) Underestimating the true costs

Your deposit isn’t the only upfront cost. You’ll also need to budget for:

• Stamp duty
• Legal and conveyancing fees
• Building and pest inspections
• Loan setup fees
• Moving costs

And don’t forget ongoing costs like council rates, utilities, insurance, and maintenance.

2) Letting emotions lead

It’s easy to fall in love with a home and ignore red flags or stretch your budget. Stay focused on your needs and financial limits. If a property doesn’t tick your key boxes, keep looking.

3) Skipping pre-approval

Getting pre-approved gives you a clear idea of what you can afford and strengthens your position when making an offer. It usually lasts for 90 days and helps you avoid disappointment.

4) Skipping the building & pest inspection

Trying to save a few hundred dollars here could cost you thousands later. Always get a professional inspection before signing the contract, it could uncover hidden issues like termites, damp, or structural problems.

Ready to take the next step?

Buying your first home is exciting, but it’s also a big financial decision. At FinancePath, we’ll help you:

• Understand your borrowing power
• Navigate the 5% Deposit Scheme
• Find the right home loan for your goals

Let’s make your first home purchase a smart one. Get in touch today to get started.