Top 5 frequently asked questions by first home buyers and investors in 2025.

Buying a home or investing in property is one of the most significant financial decisions you'll ever make. It's a journey filled with excitement, anticipation, and, understandably, a few questions.

At FinancePath, we understand the importance of making informed decisions, and we're here to guide you every step of the way.

Whether you're a first home buyer eager to step onto the property ladder or an investor looking to expand your portfolio, we've got the answers to the most pressing questions you might have.

Let's dive into the top five questions we receive from first home buyers and investors in Australia today.

1. What is the minimum deposit required to buy a home?

For first home buyers, the minimum deposit can vary. Generally, lenders require at least 5% of the property’s purchase price. However, with government schemes like the First Home Guarantee, eligible buyers can secure a home with as little as a 5% deposit without paying Lenders Mortgage Insurance (LMI). Investors typically need a larger deposit, often between 10 and 20%. If you want to avoid LMI and secure better loan terms the lager the deposit the better.

2. How much can I borrow?

The amount you can borrow depends on several factors, including your income, expenses, credit score, and the type of loan you choose. FinancePath are experts in not only working out your borrowing capacity, they will tailor the borrowing amount to match your stated maximum repayment limits ensuring that you also have price of mind once the loan settled. As a general rule, your borrowing capacity sit so somewhere between 4 and 5 times your gross salary, dependent on your personal circumstances. In 2024, the average loan size for owner-occupier dwellings was approximately $600,000.

3. What are the current interest rates?

Interest rates fluctuate based on economic conditions and Reserve Bank of Australia (RBA) policies. As of the start of  2025, variable home loan rates start from around 5.79 - 6.09%. Fixed rates can offer stability, especially in a rising rate environment, but it’s essential to compare options and choose what suits your financial situation best.

4. Are there any government grants or incentives available?

Yes, there are several government grants and incentives to help first home buyers and investors. The First Home Owner Grant (FHOG), First Home Guarantee, and the Help to Buy scheme are some of the popular options. These programs can significantly reduce the financial burden of buying a home by offering lower deposit requirements, grants, and equity contributions. In 2024, the number of new loan commitments for first home buyers increased by 1.3%.

5. How do I choose the right mortgage adviser?

Choosing the right mortgage adviser is crucial. Look for experts who are members of professional associations like the Mortgage & Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA). Check their experience, the range of lenders they work with, and their fee structure. A good adviser will take the time to understand you, what you want to achieve and provide you with tailored advice and support throughout your home buying or investment journey.

Understanding these common questions can help you make informed decisions and navigate the property market with confidence. At FinancePath, we’re dedicated to providing expert advice and support to first home buyers and investors.

Contact us today to learn more and start your journey to home ownership or investment success.