The First Home Buyer’s Financial Checklist

1. Know Exactly How Much You Have Saved

Start with the simplest number.

How much money do you actually have available for your first home?

Do not just look at your main savings account.

Include relevant savings across your accounts, but separate money that you do not intend to use for the purchase.

For example:

• Home deposit savings: $75,000
• Emergency savings: $15,000
• Holiday fund: $5,000

Your total savings may be $95,000, but that does not mean your home deposit is $95,000.

The distinction matters because you should not necessarily use every dollar you own to get through settlement.

Moneysmart recommends a deposit target of around 20% of the purchase price plus enough to cover buying costs. It also notes that eligible buyers may be able to purchase with a smaller deposit through government schemes.

The first question is therefore:
How much money can I contribute without leaving myself financially exposed afterwards?

2. Work Out Your Deposit Percentage

Once you know your available deposit, calculate what percentage it represents of the property price you are considering.

For example:

The percentage affects the size of the mortgage relative to the property value.

It can also affect costs such as lenders mortgage insurance, depending on the loan structure and lender.

Moneysmart says a 20% deposit can avoid the need for lenders mortgage insurance, while some government-supported pathways can allow eligible buyers to purchase with a smaller deposit.

A smaller deposit does not automatically make a purchase unsuitable.

But it generally means a higher loan relative to the property's value, so repayment affordability and financial resilience become especially important.

3. Don't Forget the Costs Beyond the Deposit

One of the biggest first-home-buyer mistakes is treating the deposit as the total amount needed.

It isn't.

Depending on your circumstances and location, your purchase could involve:

• • stamp duty or transfer duty
• • conveyancing or legal fees
• • building and pest inspections
• • lender costs
• • valuation-related costs
• • mortgage registration
• • title-related charges
• • moving expenses
• • insurance
• • immediate repairs
• • furniture and appliances

Some eligible first home buyers may receive state or territory concessions, but these vary according to location and circumstances.

The important thing is to research the costs relevant to the property you are actually buying.

Moneysmart explicitly recommends budgeting for buying costs in addition to the deposit.

Your target should therefore not simply be:
"I have enough for the deposit."

It should be:
"I have enough for the deposit, buying costs and a reasonable amount of financial breathing room."

4. Build a Post-Settlement Cash Buffer

This deserves its own checklist item.

Imagine you have $100,000 saved.

You need $85,000 for your deposit and purchase-related costs.

That leaves $15,000.

Is that enough?

There is no universal answer.

It depends on:

• your income
• household expenses
• mortgage size
• employment stability
• dependants
• insurance
• other debts
• expected property maintenance
• your general financial circumstances

Moneysmart currently suggests three months of expenses as a useful emergency-fund target, while noting that some people may need more depending on their circumstances.

For a first home buyer, retaining some accessible funds after settlement can provide valuable flexibility.

Your first home should not leave you with nothing left in the bank.

5. Know Your Household Income

Your mortgage application will need a clear picture of your income.

Start by identifying:

• base salary
• overtime
• bonuses
• commission
• casual income
• self-employed income
• rental income
• investment income
• other regular income

Do not automatically assume a lender will treat every dollar in exactly the same way.

Different types of income can be subject to different assessment policies.

APRA's mortgage lending guidance says prudent lenders should verify income and make appropriate adjustments for income that is less stable or uncertain. It specifically discusses variable income, rental income and self-employed income.

That means your headline annual income is not always the same as the income a lender will use in its serviceability assessment.

6. Make Sure Your Income Can Be Documented

Your income may be strong, but a lender needs evidence.

Depending on your circumstances, you could be asked for documents such as:

• recent payslips
• employment information
• tax returns
• notices of assessment
• bank statements
• business financial statements
• rental statements
• other income evidence

The exact requirements vary between lenders and borrower circumstances.

Preparing these documents early can make the mortgage process easier and reveal any gaps before you are trying to buy a property.

This is particularly important if you are:

• self-employed
• recently employed in a new role
• receiving substantial bonuses
• working casually
• earning commission
• combining multiple income sources

7. Understand Your Living Expenses

This is one of the most important sections of the checklist.

Look at your actual spending. It plays a big role in your debt-to-income ratio.

Not what you think you spend.

Not what you wish you spent.

What you actually spend.

Review several months of bank statements and identify:

• • groceries
• • utilities
• • transport
• • insurance
• • childcare
• • medical costs
• • subscriptions
• • dining
• • entertainment
• • holidays
• • education
• • personal spending
• • existing repayments
• • other regular commitments

APRA identifies living expenses as a key part of mortgage serviceability and expects lenders to assess household expenses prudently.

This is why a mortgage budget should not be built around a fictional lifestyle.

If your current household spends $6,000 a month, do not assume that owning a home magically turns that into $3,500.

Some costs may fall.

Others may increase.

You need a realistic picture.

8. Separate Essential and Discretionary Spending

Not every expense deserves the same treatment.

Separate:

This makes it easier to understand where your flexibility actually exists.

It also helps answer:
"What would we cut if our mortgage became more expensive?"

A household with some discretionary flexibility may be able to absorb a change more comfortably than one where almost every expense is fixed.

9. List Every Existing Debt

Before applying, create a complete debt list.

Include:

• credit cards
• personal loans
• car finance
• HECS-HELP debt
• BNPL commitments
• existing property loans
• other credit facilities

Record:

A small debt may seem irrelevant to you.

But lenders assess the overall financial commitment.

APRA guidance says prudent lenders should verify existing debt commitments and consider them in serviceability assessments.

Understanding your liabilities before you apply can help you see why your borrowing capacity may be different from what a simple online calculator suggests.

10. Review Your Credit Cards

Look at both the balance and the limit.

A card with a $15,000 limit may matter even if you owe only $500.

The reason is that lenders may consider the credit facility as part of assessing your financial commitments.

Ask:
Do I really need the full limit I currently have?

You do not necessarily need to close every credit card before applying for a mortgage.

But unnecessary credit facilities are worth reviewing.

Any decision should consider your circumstances and the effect on your overall credit position.

11. Be Careful With Buy Now, Pay Later

BNPL can make spending feel more manageable because purchases are split into instalments.

But the total purchase still represents a commitment against your future cash flow.

If you have multiple BNPL arrangements running simultaneously, your upcoming income may already be partly committed before it arrives.

Moneysmart recommends including BNPL commitments when looking at your overall debt position. (moneysmart.gov.au)

The key question is not:
"Have I ever used BNPL?"

It is:
"Has instalment credit become part of how I fund ordinary living?"

If it has, review the underlying cash flow.

12. Check Your Credit Report

Understanding your credit profile is another sensible preparation step.

Moneysmart says your credit report contains information about your credit history and that credit reporting bodies must provide one free copy of your credit report every three months if you request it. (moneysmart.gov.au)

Check that the information is accurate.

Look for:

• accounts you do not recognise
• incorrect repayment information
• outdated defaults
• incorrect personal information

Do not assume that a credit issue can necessarily be fixed immediately.

The useful habit is knowing what is on your report well before you need to apply.

13. Avoid Unnecessary New Credit Before Applying

If you are preparing for a mortgage, think carefully before taking on new debt.

That includes:

• a new car loan
• a personal loan
• new credit cards
• store finance
• additional BNPL
• other significant credit commitments

The problem is not that these products are inherently inappropriate.

It is that a new repayment commitment can change your borrowing position.

If you genuinely need a new car, for example, the decision should be based on the total financial impact rather than whether it looks harmless in isolation.

14. Know Your Borrowing Capacity

Now you can start looking at the amount a lender may potentially be prepared to lend.

But understand what the number means.

Borrowing capacity is based on a lender's assessment.

It is not a recommendation of how much you should spend.

Lenders assess income, expenses, existing debts and proposed repayments, while APRA-regulated banks must apply a minimum 3 percentage point serviceability buffer above the loan rate when assessing new borrowers. APRA confirmed in May 2026 that this buffer remains at 3 percentage points.

This helps explain why:
"I earn $150,000, so I should be able to borrow X."
is not a sufficiently reliable calculation.

The rest of the financial picture matters.

16. Stress-Test Your Mortgage

Take your expected mortgage and model several scenarios.

For example:
Current expected repayment: $3,200

Then ask:

• What happens at $3,500?
• What happens at $3,800?
• What happens at $4,100?

These figures are illustrations, not forecasts.

You are testing the household.

Could you still:

• • save?
• • pay bills?
• • handle childcare?
• • afford unexpected repairs?
• • maintain insurance?
• • take a holiday?
• • cope with a temporary income reduction?

The fact that APRA requires a serviceability buffer does not remove the need for your own household stress testing. The current regulatory minimum is a lender-assessment requirement, not a guarantee that any individual household will be comfortable under future conditions.

17. Decide What Repayment Structure You Need

When comparing loans, consider:

Principal and interest
or
Interest-only

For most owner-occupiers buying their home to live in, principal and interest is the relevant structure.

Moneysmart notes that interest-only loans can have lower initial repayments but do not reduce the principal during the interest-only period, and repayments can rise when the loan switches to principal and interest. (moneysmart.gov.au)

Your first home loan should therefore be assessed based on the complete repayment path rather than simply the lowest initial repayment.

18. Decide What Interest Rate Structure You Need

You may encounter:

• variable rates
• fixed rates
• split loans

A variable loan can move with changes in lender pricing and broader interest-rate conditions.

A fixed loan provides rate certainty for the agreed period but may have restrictions on extra repayments and can involve break costs if you change the loan early.

A split structure can combine fixed and variable portions.

Moneysmart recommends comparing these structures based on your circumstances and considering features, fees and repayment implications. (moneysmart.gov.au)

Do not treat one structure as automatically appropriate for every first home buyer.

19. Decide Whether an Offset Is Actually Useful

An offset can be valuable, but it comes with a cost on some loans.

Moneysmart explains that an offset reduces the amount of the mortgage balance on which interest is calculated. It also warns that paying a higher rate or fees for an offset may not be worthwhile if you do not maintain enough money in the account. (moneysmart.gov.au)

Consider:
How much cash am I realistically likely to hold?

If you expect your offset balance to sit close to $20,000 for years, the feature may be useful.

If you expect the balance to remain very low, a basic loan may potentially be more cost-effective.

The right decision depends on the actual numbers.

20. Compare the Whole Loan, Not Just the Rate

When comparing loans, look at:

• • interest rate
• • comparison rate
• • total amount to be repaid
• • establishment fees
• • ongoing fees
• • repayment frequency
• • offset
• • redraw
• • extra repayment rules
• • fixed-rate restrictions
• • break costs

Moneysmart says borrowers should obtain a Key Fact Sheet for the loans they are comparing and use it to compare rates, fees, repayment amounts and total repayment costs.

A loan that looks cheaper because of its advertised rate may not necessarily have the lowest overall cost for your circumstances.

21. Understand the Government Support Available to You

First home buyers may have access to government programs that can change the amount of deposit required or help with saving.

But eligibility rules matter.

The Australian Government 5% Deposit Scheme currently allows eligible first home buyers to purchase with a minimum 5% deposit and without LMI, subject to scheme requirements and location-specific property price caps. The scheme no longer has income caps and has unlimited places.

For eligible applicants, the property must meet relevant requirements, including the applicable price cap, and the property must be a home you live in.

The scheme was rebranded from the former Home Guarantee Scheme from 1 October 2025.

The important point is:

Do not assume you need to follow the traditional 20% deposit pathway without checking whether you qualify for a current government program.

At the same time, a smaller deposit should not be confused with lower overall borrowing.

You are still taking on the mortgage.

22. Check the 5% Deposit Scheme Price Cap

The current 5% Deposit Scheme has location-specific price caps.

For example, the current published caps include:

There are separate caps for territories and specific regional classifications.

Both the purchase price and the property's assessed value must be within the applicable cap.

Because these thresholds and rules can change, always check the current official tool and confirm eligibility with a participating lender before relying on a scheme for a purchase.

23. Consider the First Home Super Saver Scheme

Another potential pathway is the First Home Super Saver Scheme, or FHSS.

The ATO says eligible first home buyers can use certain voluntary superannuation contributions to help save for their first home.

Under the current rules, up to:
$15,000 of eligible voluntary contributions per financial year
and:
$50,000 across all years
can count towards the FHSS maximum release amount, subject to the scheme rules.

The calculation differs between concessional and non-concessional contributions, and associated earnings can also form part of the amount released.

This is not a simple savings account, so eligibility and release rules matter.

The ATO provides detailed guidance and examples, and the scheme should be considered before making contributions specifically for this purpose.

24. Check State and Territory First Home Buyer Concessions

Federal programs are not the only support available.

State and territory governments may offer:

• stamp duty concessions
• first home owner grants
• purchase assistance
• other home-buying incentives

Eligibility can depend on:

• the state or territory
• property type
• property value
• whether the property is new or established
• whether you have owned property before
• whether you will occupy the home

Because these programs are jurisdiction-specific and can change, check the relevant state or territory revenue office before relying on a concession in your purchase calculations.

25. Understand the Difference Between a Deposit and Your Total Funding Requirement

Suppose your intended property costs:
$700,000
and you have:
$70,000
saved.

That is a 10% deposit.

But the funding requirement may include:

The numbers change again if a government scheme, family assistance or other funding source forms part of the transaction.

The key is to build a complete funding plan.

26. Decide What You Want Your Property Budget to Be

Once you know:

• your deposit
• buying costs
• borrowing capacity
• comfortable repayment
• cash buffer

you can establish a realistic property price range.

This is where you should resist the temptation to let property listings determine your budget.

Moneysmart recommends setting a price range based on what you can afford and sticking to it.

A useful property budget might look like:
Preferred range: $650,000 to $720,000
Absolute ceiling: $750,000

That gives you a boundary.

Without one, it is easy to move from one property to the next and gradually increase your expectations.

27. Include the Cost of Owning the Property

Your mortgage is not your only housing cost.

After settlement, consider:

• • council rates
• • insurance
• • utilities
• • maintenance
• • repairs
• • strata or body corporate costs where applicable
• • gardening
• • security
• • renovations

Some of these costs will vary significantly depending on the property.

An apartment, townhouse and detached house can have very different ongoing ownership costs.

The cheapest mortgage does not necessarily correspond to the cheapest home to own.

28. Consider the Property's Condition

A property can be financially manageable at settlement and become expensive immediately afterwards.

Look carefully at:

• roof
• plumbing
• electrical systems
• appliances
• heating and cooling
• windows
• drainage
• structural condition
• pest issues
• planned strata works

Building and pest inspections can provide useful information for eligible properties.

If a property needs a $30,000 renovation within the first year, that should be part of your financial planning.

Do not assume a renovation can be funded later without checking whether the additional debt would actually be affordable.

29. Consider the Location Costs Too

The purchase price does not capture the entire financial effect of location.

A cheaper property further from work may mean:

• higher fuel costs
• longer commutes
• higher transport costs
• greater time costs
• additional childcare logistics

A more expensive property closer to work, public transport or family support may create different household economics.

Neither option is automatically better.

You should understand the trade-off.

30. Ask How Long You Expect to Stay

First home buyers sometimes focus so heavily on getting into the market that they overlook the length of time they expect to own the property.

Buying and selling property can involve substantial transaction costs.

If you expect to move again very soon, those costs can become more significant relative to the period of ownership.

Ask:

Then think about:

• career changes
• marriage
• children
• working from home
• location requirements
• changing family needs

You do not need to buy a "forever home".

You do need to consider whether the property is likely to work for a reasonable period.

31. Think About Your Next Financial Milestone

Your first home is not necessarily the end of your property journey.

After buying, you may eventually want to:

• pay down the mortgage
• renovate
• refinance
• upgrade
• invest
• build equity
• purchase another property

That makes the structure of your first mortgage worth considering carefully.

A loan should not only work for the purchase. It should also leave you enough flexibility to manage the years afterwards.

32. Don't Assume Your First Mortgage Is Your Permanent Mortgage

Your financial circumstances will change.

Your income may rise.

Your mortgage balance will change.

Your property may change in value.

Your family may grow.

Your expenses may increase.

Your financial goals may evolve.

That is why mortgage reviews matter.

Moneysmart recommends reviewing the cost and features of your loan and considering whether your mortgage still suits your circumstances. (moneysmart.gov.au)

A review does not automatically mean refinancing.

It means understanding whether the current arrangement still makes sense.

33. Get Preapproval Before You Become Emotionally Attached to Properties

Preapproval can give you a clearer indication of your borrowing position before you start negotiating.

Moneysmart says preapproval generally lasts around three to six months, although this varies by lender and circumstances, and stresses that preapproval is not a guarantee of final approval.

That distinction matters.

Use preapproval to establish a realistic search range.

Do not treat it as permission to spend the maximum amount.

34. Keep Your Financial Position Stable While House Hunting

Once you start looking, avoid unnecessary financial changes where possible.

That means thinking carefully before:

• taking on a new major debt
• increasing credit limits
• changing your spending dramatically
• emptying your savings
• making unusual financial commitments

Life cannot always be planned.

Your job may change.

An emergency may happen.

A major expense may arise.

The point is simply to understand that your final mortgage assessment reflects your financial position at the time of application and approval.

35. Prepare Your Documentation Early

A first home buyer's documentation may include:

• identification
• payslips
• bank statements
• savings history
• employment records
• tax documents
• details of existing debts
• super information where relevant
• FHSS documentation where relevant

Having this ready can save time later.

It can also help reveal inconsistencies before they become an issue during the application process.

36. Don't Make Your Deposit So Large That You Eliminate Your Buffer

A larger deposit can reduce your mortgage.

But there is a trade-off.

Suppose you have:
$120,000
available.

You could contribute:
$110,000
towards the purchase.
Or:
$90,000
and retain:
$30,000
as accessible savings.

There is no universal answer.

The right balance depends on your interest rate, mortgage structure, emergency needs, financial goals and comfort with liquidity.

An offset can sometimes provide a useful middle ground because eligible savings can reduce the balance used to calculate mortgage interest while remaining accessible.

37. Decide How You Will Manage Your First Paycheque After Settlement

This might sound minor.

It isn't.

Settlement is when many buyers start changing their financial habits.

Instead, decide your system beforehand.

The exact order will differ between households.

The point is to avoid allowing the new mortgage to consume every dollar of available income without a plan.

38. Build a Post-Settlement Budget

Once you know your likely mortgage repayment, create a new household budget.

Include:

Moneysmart recommends updating budgets as financial circumstances change and checking regularly that the figures still reflect your real spending. (moneysmart.gov.au)

39. Consider What Happens if Your Income Changes

A mortgage might work comfortably while you have two stable incomes.

What happens if:

• one person changes jobs?
• one income temporarily falls?
• you reduce working hours?
• you take parental leave?
• a business income stream weakens?

You do not need to predict which of these will happen.

But you should know how dependent your mortgage is on everything remaining exactly as it is today.
That is the essence of mortgage resilience.

40. Think About the Next Five Years, Not Just Settlement Day

Your first home may become the foundation for future financial decisions.

Ask:
What do I want my financial position to look like five years after buying?

Perhaps you want:

• a significantly smaller mortgage
• a large offset balance
• meaningful equity
• diversified investments
• a second property
• more financial flexibility

You do not need to choose all of these.

The purpose is to understand what today's mortgage makes easier or harder later.

A First Home Buyer's Financial Readiness Test

Before you make an offer, ask yourself:

If you can answer these questions confidently, you have moved well beyond simply saving a deposit.

Financially Ready Versus Market Ready

It is possible to be financially ready before you feel the property market is "perfect."

It is also possible to feel confident about the market while not being financially ready yourself.

These are different things.

Market readiness involves external conditions.

Financial readiness involves:

• income
• savings
• debt
• cash flow
• borrowing capacity
• mortgage affordability
• financial resilience

You cannot control the market.

You have considerably more influence over your own financial position.

That makes financial readiness a particularly useful thing to work on.

A Simple First Home Buyer Numbers Example

Consider a hypothetical first home buyer.

The borrower might look at the $100,000 deposit and feel ready.

But the real analysis is broader:

• Can the household manage the mortgage?
• Can it service the car loan?
• Can it maintain a $20,000 buffer?
• What happens if rates rise?
• What if one person reduces working hours?
• What are the annual rates and insurance costs?
• What if the property requires $10,000 of repairs?
• What happens to future savings?

The numbers create a much more realistic picture of readiness.

What If You Are Not Ready Yet?

That is not necessarily a problem.

One of the benefits of completing the checklist before house hunting is discovering what needs to improve.

Maybe you need:
another $20,000 of savings
or:
six months to reduce a car loan
or:
more stable employment history
or:
a larger emergency buffer
or:
a clearer understanding of your borrowing capacity

Now you have a plan.

Instead of thinking:
"I can't buy yet."

you can think:
"Here are the financial milestones I need to reach first."

That turns waiting into preparation.

How Pinpoint Finance Can Help First Home Buyers Prepare

The first home buyer process often becomes much easier once the financial picture is clear.

At Pinpoint Finance, the focus can begin with understanding your position before moving to the property search.

That can involve looking at:

• income
• expenses
• existing debts
• savings
• deposit
• borrowing capacity
• loan structure
• property goals
• future plans

The objective is not simply to establish the largest mortgage a lender may approve.

It is to understand the relationship between the mortgage and the rest of your financial life.

For more straightforward borrowers, that may mean comparing suitable home loan options and understanding the costs and features involved.

For buyers with more complex circumstances, it may mean looking more closely at how different lenders assess variable income, employment arrangements or existing commitments.

Access to more than 60 lenders can allow different lender policies to be considered where relevant.

For broader questions around government schemes, tax or financial planning, appropriate specialist advice may also be required.

The important starting point is clarity.

• What can you afford?
• What can you comfortably service?
• What will you have left after settlement?
• And what does this first home mean for your next financial stage?