Most first home buyer mistakes come from doing things in the wrong order. The good news is that every one of them can be avoided, and you don't need any finance background to do it.
If you're thinking about buying your first home in Wagga Wagga, the Riverina's regional hub on the Murrumbidgee River, the steps below will help you check your numbers before you fall in love with a property.
Why Should You Get Pre-Approval Before You Start Inspecting Homes?
Pre-approval tells you how much a lender may let you borrow, so you can search within a number that is real. It is not a final offer, because the lender still values the property and checks your details before the loan goes ahead.
Consider a buyer renting in Wagga Wagga who inspects homes first and works out the numbers later. They fall for a home that needs a $500,000 loan. Using an illustrative rate of 6.75% p.a. (not a current offer) over 30 years on principal and interest, the repayment comes to about $3,243 a month. Before going further, they compare that with their current rent and put the difference aside each month for three months, to test whether it feels comfortable. It does, but only just, so they set their ceiling below that loan size. They then lodge their pre-approval and go back to inspections with a firm limit.
Your own figures will differ, so use a calculator and check your borrowing capacity before you set a first home buyer budget. The trade-off is that pre-approval usually has an expiry date, so it pays to be ready to buy within that window.
NSW Stamp Duty Concessions: Check Them Before You Budget
In NSW, the First Home Buyers Assistance Scheme can remove or reduce stamp duty (also called transfer duty) on a home. For contracts exchanged on or after 1 July 2023, homes valued at $800,000 or less are exempt, homes above $800,000 and below $1,000,000 pay a reduced rate, and nothing applies at $1,000,000 or more.
As an example, take a buyer who budgets for full duty on a home valued at $850,000. This is one of the values in the NSW Government's published examples, not a Wagga Wagga price. General duty at that value is $32,437. Under the scheme, the published reduced duty for transactions from 1 July 2026 to 30 June 2027 is $9,796.75. The buyer tells their solicitor or conveyancer early, who lodges the application after contracts are exchanged. The saving is $22,640.25, and the buyer can put that money toward moving costs and a small buffer.
Eligibility has conditions. Neither you nor your spouse or partner can have ever owned residential property in Australia, and at least one buyer must be an Australian citizen or permanent resident. You must also move in within 12 months of settlement and live there for at least 12 continuous months. If you can't meet that move-in rule, the concession may not suit your plans, so confirm it with Revenue NSW or your conveyancer before you sign.
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Book a chat with a Finance & Mortgage Broker at Simple Lending today.
Do You Really Need a 20% Deposit to Buy Your First Home?
No. Many lenders accept a smaller deposit, but a smaller deposit usually means a bigger loan and may mean paying Lenders Mortgage Insurance (LMI). LMI is a cost added to your loan when your deposit is low, and it protects the lender rather than you.
Waiting years to save a full 20% can mean missing out on buying at all, so it is worth looking at your low deposit options. Some government-backed schemes, such as the Home Guarantee Scheme, may help with a smaller deposit, and each has its own eligibility rules. Under the 5% Deposit Scheme, you are still responsible for stamp duty, so it needs a place in your budget. You can also read about avoiding LMI where it applies to you.
A gift deposit from family is another option some lenders accept, though they usually want to see it documented properly. The trade-off with any low deposit route is more interest paid over the life of the loan, so weigh that against the benefit of buying sooner.
Choosing a Loan on Interest Rate Alone
A low headline interest rate is only one part of a home loan, and the features around it can matter just as much. The right mix depends on how you save, how secure your income is and how long you plan to stay.
An offset account is a savings account linked to your loan. The money in it reduces the balance your interest is charged on, but loans with an offset can carry a higher rate or an annual fee depending on the lender. Redraw lets you take back extra repayments you have made, though some lenders limit how often or how much you can withdraw, so check the rules before you rely on it.
A fixed interest rate gives repayment certainty for a set period. The trade-off is that extra repayments are often capped, and leaving the loan early may bring break costs. A variable interest rate can move up or down over time, which means your repayments may change, but it usually allows more flexibility. Some buyers split their loan between the two.
You can read more about choosing the right loan features and what goes into getting a lower interest rate, including how to ask your lender about discounts.
If any of this feels like a lot, that is completely normal for a first home buyer. Call one of our team or book an appointment at a time that works for you, and we will walk through your numbers, your options and your next step together, at your pace.
Frequently Asked Questions
Should I get pre-approval before looking at homes in Wagga Wagga?
Yes. Pre-approval shows how much a lender may let you borrow, so you can search within a realistic range. It is not a final offer, as the lender still values the property and checks your details.
Do first home buyers pay stamp duty in NSW?
It depends on the home's value. For contracts exchanged on or after 1 July 2023, homes valued at $800,000 or less are exempt under the First Home Buyers Assistance Scheme, and homes above that and below $1,000,000 pay a reduced rate. Eligibility conditions apply, including a move-in requirement.
Do I need a 20% deposit to buy my first home?
No. Many lenders accept smaller deposits, though you may pay Lenders Mortgage Insurance and borrow more. Government-backed schemes may also help, subject to their own eligibility rules.
Is a low interest rate always the right choice for a first home loan?
Not always. Features such as an offset account, redraw and the choice between fixed and variable rates can change what a loan costs and how flexible it is. Each feature has trade-offs, such as fees or limits on extra repayments.
