Guide for first home buyers

The First Home Owner Grant (FHOG) in Australia is a national scheme funded by the states and territories and administered under their own legislation. The amount of the grant and eligibility criteria can vary depending on the state or territory in which you intend to purchase your home.

To get more specific details about eligibility criteria for your state or territory, you can visit First Home Owner Grant

Many states offer stamp duty concessions or exemptions for first home buyers.

Click here to learn more about stamp duty and to access CommBank’s Stamp Duty Calculator.

The First Home Owner Grant (FHOG) is a national scheme funded by the states and territories to assist first home buyers with the costs of purchasing or building a new home. While the scheme is national, each state and territory administers it under their own legislation, which means the eligibility criteria and the amount of the grant can vary depending on where you are buying your home.

Generally, the following conditions apply:

• The grant is only available to first home buyers
• You can only receive the grant once
• You must be at least 18 years of age and an Australian citizen or permanent resident
• You must be a natural person (not a company or trust)
• You must live in the house for at least six months once it’s built

To get more specific details about eligibility criteria for your state or territory, you can visit First Home Owner Grant.

The amount of money you need to buy a home in Australia depends on many factors, including the location, the type of property, and your financial situation. Here are some key points to consider:

1. Deposit: Traditionally, a 20% deposit is recommended, but many buyers opt for a lower deposit. Lenders typically expect at least 5% of the property's sale price. For example, a 5% deposit on a $680,000 home would be $34,000. If you need to borrow more than 80% of the value of the property, you may need to pay Lenders’ Mortgage Insurance.
2. Other Upfront Costs: In addition to the deposit, there are other upfront costs to consider, such as:  
   • Stamp Duty: This varies by state and the value of the property
   • Conveyancing and Legal Fees: These are the costs associated with the legal aspects of buying a home
   • Building and Pest Inspection: It's advisable to have the property inspected before purchase
   • Mortgage Registration Fee: This is a fee for registering the mortgage with the state or territory
   • Transfer Fee: This is the fee for transferring the property title to your name
   • Loan Application Fee: Some lenders charge a fee to process your home loan application
3. Government Assistance: There are several government schemes to help first home buyers, such as the First Home Owner Grant and the Australian Government 5% Deposit Scheme, which can reduce the amount of money you need upfront.
4. Income Requirements: To comfortably afford a home, you need a certain level of income. These will vary from region to region – speaking with a mortgage lender can help you determine the amount you will need to pay in deposit to avoid mortgage stress.

The answer depends on many factors, including location, market conditions, and your personal preferences. Building a home can offer unique customisation and means that everything is new, while buying an existing property can be much faster although some minor repairs or renovations may be necessary.

Learn more about the costs of building your own home here.

Choosing between a mortgage broker and a bank for your home loan depends on your needs and preferences. Mortgage brokers can offer a range of loan options from various lenders, and they often source competitive rates on your behalf. However, they don't work with every lender, so it's a good idea to consider the differences and to do your own research too.

The amount you can borrow for a home loan depends on several factors, including your income, expenses, and the lender's policies. To get an accurate estimate, you can use our Borrowing Power Calculator.

It's important to note that different lenders may have varying criteria and policies, so it's a good idea to compare options and seek guidance from a Home Lending Specialist.

Commonwealth Bank (CBA)  allows first home buyers to include income from renting out a bedroom (Boarder Income) to help service their home loan. This policy permits customers up to $150 per week in rental income for loan serviceability, with one boarder arrangement allowed. 

Boarder income refers to regular earnings received from renting out a bedroom to individuals within a borrower’s owner-occupied residence. These individuals, known as ‘boarders’ can include friends, immediate or extended family members (excluding spouses of the borrower). This income can be considered for serviceability assessment, provided it meets specific eligibility criteria. 

• Example: Two brothers; one brother is ready to purchase his first home and will have his younger brother live with him. The younger brother is working part-time while completing Uni and agrees to pay $150 per week in board. We can now recognise this income in servicing to assist the older brother in purchasing his first home.  

The home loan must be for personal use, such as purchases, construction or refinancing an owner-occupied property. Investment purposes are excluded. . Eligible customers include those with guarantors (e.g. Family Security Support Loans), those claiming First Home Owners Grant, or participating in the Australian Government 5% Deposit Scheme. For more information and to check your eligibility, speak to your Home Lending Specialist.