What Do First Home Buyers Need to Know About Purchasing a House?

You probably have questions.

Buying a house is different from almost anything else you'll purchase. There's no fixed price on the shelf, no simple checkout process, and the numbers involved can feel overwhelming when you're working through them for the first time.

The most important thing to understand is that you don't need a 20% deposit to buy a house in Craigieburn. Options exist for buyers with a 5% deposit or 10% deposit, and in some situations government schemes can remove the usual barrier of Lenders Mortgage Insurance (LMI). Getting clear on what's actually required, rather than what you think is required, changes the timeline completely.

How Much Do You Actually Need to Save for a House in Craigieburn?

You need enough for the deposit, plus stamp duty, plus costs like conveyancing and building inspections.

Consider a buyer purchasing a house in Craigieburn for $550,000. With a 5% deposit, they contribute $27,500. Stamp duty in Victoria for a first home buyer purchasing at this price is approximately $21,970, though first home buyer stamp duty concessions can reduce or eliminate this amount depending on the property value. Conveyancing fees typically sit around $1,500 to $2,000, and a building inspection costs $400 to $600. In this scenario, the buyer needs approximately $30,000 to $32,000 in total savings if they qualify for full stamp duty concessions, or closer to $52,000 without concessions.

If you're using a 10% deposit instead, the upfront amount increases to $55,000 for the deposit alone, before adding those other costs. The deposit size affects whether you'll pay LMI, which protects the lender if you borrow more than 80% of the property value. A 5% deposit generally means LMI applies unless you access a government scheme.

What Government Support Can You Access When Buying a House?

Government schemes exist to reduce the deposit or remove LMI for eligible buyers.

The Home Guarantee Scheme includes options like the First Home Guarantee, which allows you to purchase with a 5% deposit without paying LMI. This applies to houses up to a certain price cap in Victoria. For Craigieburn, that cap is well above median house prices in the area, so most properties qualify. You must be a first home buyer, meet income limits (currently $125,000 for singles or $200,000 for couples), and purchase a home that meets the scheme's conditions.

Victoria also offers the First Home Owner Grant, which provides $10,000 for buyers purchasing or building a new home valued up to $750,000. This grant doesn't apply to established homes, only new builds or off-the-plan properties. Stamp duty concessions in Victoria can eliminate stamp duty entirely for first home buyers purchasing a property under $600,000, and partial concessions apply up to $750,000.

In our experience, buyers often overlook the gift deposit option. If parents or family members contribute part of your deposit as a genuine gift (not a loan), most lenders will accept this. You'll need a signed letter confirming the funds are a gift with no repayment expectation, but it's a common way to reach the 5% or 10% threshold without waiting years to save.

What Type of Interest Rate Should You Choose?

You can select a variable interest rate, a fixed interest rate, or split your loan between both.

A variable rate moves with the market. When the Reserve Bank changes the cash rate, your repayments adjust accordingly. The benefit is flexibility: most variable loans include features like an offset account and redraw, which help you reduce interest over time. You can also make extra repayments without penalty, which shortens the loan term if your income allows it.

A fixed rate locks your repayments for a set period, typically one to five years. This provides certainty, particularly helpful if you're on a tight budget and can't absorb repayment increases. The downside is less flexibility: extra repayments are usually capped, and breaking the loan early can trigger significant costs. Once the fixed period ends, the loan reverts to a variable rate.

Splitting your loan, say 50% fixed and 50% variable, gives you some certainty and some flexibility. In a scenario where a buyer in Craigieburn borrows $500,000, they might fix $250,000 at a locked rate for three years and keep $250,000 variable with an offset account attached. This approach balances protection against rate rises with the ability to make extra repayments and reduce interest.

How Does Pre-Approval Help You Purchase a House?

Pre-approval confirms how much you can borrow before you start looking at properties.

When you apply for a home loan, the lender assesses your income, expenses, debts, and credit history to calculate your borrowing capacity. Pre-approval gives you a conditional commitment, usually valid for three to six months, which means you can make offers knowing your finance is in place. Sellers and agents take you more seriously when you have pre-approval, particularly in areas like Craigieburn where the market can move quickly.

Pre-approval doesn't guarantee final approval. The lender still needs to assess the specific property you choose, including a valuation to confirm it matches the purchase price. If the property values below your offer, you may need to increase your deposit or renegotiate the price. Getting pre-approval early removes uncertainty and helps you focus on properties within your confirmed price range.

What Loan Features Matter Most for First Home Buyers?

An offset account and redraw facility both reduce the interest you pay, but they work differently.

An offset account is a transaction account linked to your home loan. Every dollar in the offset reduces the balance on which interest is calculated. If you borrow $500,000 and keep $10,000 in your offset, you only pay interest on $490,000. You can access the money in the offset at any time, which makes it useful for holding savings or managing irregular income.

A redraw facility lets you withdraw extra repayments you've made on top of your minimum. If your minimum monthly repayment is $2,500 and you pay $3,000, the extra $500 goes into redraw. You can access it later if needed, though some lenders charge fees or restrict how often you can redraw. Not all fixed rate loans include redraw, and those that do often limit the amount you can access.

Craigieburn has a growing population of young families, many purchasing their first home in estates around Highlands and Atherstone. Buyers in these areas often value offset accounts because they're saving for other goals like renovations or a second car while still paying down the mortgage. The ability to access those funds without refinancing or applying for another loan provides genuine flexibility.

What Happens If Your Deposit Is Below 20%?

You'll likely pay Lenders Mortgage Insurance unless you access a government scheme or lender waiver.

LMI is a one-off premium that protects the lender if you default on the loan. The cost depends on your deposit size and loan amount. For a buyer borrowing $522,500 with a 5% deposit on a $550,000 house, LMI might cost $15,000 to $20,000. That premium is usually added to your loan rather than paid upfront, so your total loan amount becomes $537,500 to $542,500.

The First Home Guarantee removes this cost entirely if you meet the criteria. Some lenders also offer low deposit options with reduced or waived LMI for specific occupations like healthcare workers, lawyers, or accountants. These waivers aren't advertised widely, so they're worth asking about during the first home loan application process.

If you're paying LMI, it doesn't provide any benefit to you directly. It protects the lender, not the borrower. Once your equity reaches 20%, either through paying down the loan or the property increasing in value, the LMI requirement disappears for any future refinancing. You can't claim it back, but you also won't pay it again if you refinance later.

What Should You Prioritise in Your First Home Budget?

Focus on total repayments, not just the interest rate.

A loan with a slightly higher interest rate but no ongoing fees might cost less overall than a loan with a lower rate and a $400 annual package fee. When comparing options, calculate the total annual cost including all fees and charges. Online comparison tools can be misleading because they don't always include every cost, so ask for a full breakdown before making a decision.

Repayments need to fit your income comfortably, even if interest rates rise. Lenders assess your application using a buffer, usually 3% above the actual rate, to confirm you can manage repayment increases. If you're borrowing at the upper limit of your capacity, even a small rate rise can create pressure. Leaving a margin between what you can borrow and what you actually borrow gives you room to handle changes without financial strain.

Buying a house in Craigieburn means you're looking at a growing area with strong infrastructure development. The Craigieburn train line connects to the city, schools are expanding, and retail precincts like Highlands Shopping Centre continue to grow. These factors support property values over time, but they also mean demand is steady. Having your finances ready and your pre-approval confirmed means you can move quickly when the right property becomes available.

Call one of our team or book an appointment at a time that works for you. We'll walk through your deposit options, government support you qualify for, and loan features that match how you plan to use your home. You don't need to have everything figured out before we talk, just a sense of where you're starting and where you want to go.

Frequently Asked Questions