First Time Buyer Advice & What Not to Do

Understand What You Can Afford Before You Start Looking

Your borrowing capacity determines the price range you can shop in, not the other way around. Getting that figure confirmed upfront prevents wasted weekends and emotional attachment to properties you cannot finance.

Consider a buyer on the Sunshine Coast earning $85,000 annually with minimal other debt. Their borrowing capacity might sit around $550,000 to $600,000 depending on lender assessment, living expenses, and current rate conditions. If they start attending open homes in Mooloolaba or Alexandra Headland without knowing that figure, they risk falling for a property they cannot secure.

Borrowing capacity is not the same as what you feel comfortable repaying. Lenders assess your ability to service a loan at a higher rate than the actual rate you will pay, typically adding a buffer of 3% or more. That means even if you are quoted a rate of 6.2%, the lender may assess you at 9.2% or higher. Understanding that gap helps you avoid overcommitting.

The Australian Government 5% Deposit Scheme Removes LMI, Not Risk

The Australian Government 5% Deposit Scheme lets eligible buyers purchase with a 5% deposit without paying Lenders Mortgage Insurance. Housing Australia guarantees the difference between your deposit and 20% of the property value. For Sunshine Coast buyers, the property price cap is $1,000,000 in regional centres and $700,000 in other areas.

No income cap applies under the scheme, but not every lender participates, and not every loan product is available through participating lenders. Some lenders restrict loan features such as offset accounts or limit the ability to split your loan between fixed and variable rates when using the scheme. That means the benefit of avoiding LMI must be weighed against the loan structure you end up with.

A buyer purchasing in Caloundra at $680,000 with a 5% deposit would contribute $34,000. Under the scheme, they avoid LMI, which could otherwise cost $15,000 to $20,000. But if the participating lender does not offer an offset account and the buyer has irregular income or plans to keep savings accessible, the absence of that feature might outweigh the LMI saving over time.

Applications are made through participating lenders, not directly through Housing Australia. You need to work with a broker or lender who can access the scheme and confirm which loan products are available under it.

Queensland Stamp Duty Concessions Differ for New and Established Homes

Queensland offers different concessions depending on whether you buy new, established, or vacant land. For established homes, the first home concession reduces duty by up to $17,350 on properties valued up to $709,999. The concession phases out in bands and reaches nil at $800,000 or above. Duty is not eliminated, just reduced.

For new homes and vacant land purchased under contracts signed from 1 May 2025, the first home new home concession removes duty entirely with no price cap. That applies to house-and-land packages, newly built homes, and vacant land where you intend to build.

A buyer purchasing an established unit in Maroochydore at $650,000 would pay reduced duty under the first home concession, but duty would still apply. A buyer purchasing a house-and-land package in Sippy Downs at the same price would pay no duty at all under the new home concession. The difference in upfront costs can exceed $20,000.

From 1 August 2026, at least one applicant must be an Australian citizen, permanent resident, or specified foreign retiree to access any of the Queensland first home concessions. That eligibility requirement was introduced partway through the year and applies to agreements entered into from that date forward.

Do Not Skip Pre-Approval to Make an Offer Faster

Some buyers believe they can move more quickly by skipping pre-approval and going straight to a formal application after their offer is accepted. That approach introduces risk, not speed.

Pre-approval confirms your borrowing capacity and gives you certainty before you make an offer. It also identifies any issues with your financial position, employment documentation, or credit history that might delay or derail a full application. If you sign a contract without pre-approval and then discover you cannot borrow the amount you need, you risk losing your deposit.

In our experience, buyers who secure pre-approval before attending auctions or making offers move through the settlement process faster and with fewer surprises. Lenders have already reviewed your income, expenses, and deposit source. The formal application becomes a matter of providing the contract of sale and finalising property valuation, not starting from scratch.

Deposit Source Matters More Than Deposit Size

Lenders require your deposit to come from genuine savings, gifted funds from an immediate family member, equity in another property, or a combination of those sources. Funds that appear in your account shortly before application, or that cannot be clearly traced, will be questioned.

Genuine savings typically need to be held for at least three months in your own account. That includes savings accounts, term deposits, and shares. Funds received as a gift must be supported by a signed statutory declaration from the person giving the money, confirming it is a genuine gift with no expectation of repayment.

A buyer using the 5% deposit scheme on a $700,000 property in Buderim would need $35,000 as a deposit. If $20,000 of that came from their own savings and $15,000 was gifted by a parent, both sources need to be documented. The lender will ask for bank statements showing the $20,000 accumulated over time and a gift letter for the $15,000. Without that documentation, the application stalls.

Fixed Rate Decisions Should Match Your Actual Circumstances

Locking in a fixed interest rate protects you from rate rises during the fixed period, but it also removes flexibility. You cannot make extra repayments above a set limit, you cannot access redraw or offset during the fixed term with most lenders, and breaking the loan early can trigger significant costs.

A variable rate lets you pay extra whenever you want, access redraw or offset, and exit the loan without break costs if your circumstances change. The rate can move up or down, and you carry that risk.

Many buyers split their loan, fixing part and leaving part variable. That gives some rate protection while keeping access to offset and extra repayment features on the variable portion. The right split depends on your savings habits, income stability, and how much rate certainty you need. There is no single formula that works for everyone.

The First Home Super Saver Scheme Requires Planning, Not Speed

The FHSS Scheme lets you contribute up to $15,000 per financial year into your super fund and withdraw up to $50,000 in total to use as a deposit. Concessional contributions are taxed at 15% instead of your marginal rate, which can deliver a significant tax benefit if you earn above the tax-free threshold.

But the scheme requires you to obtain a determination from the Australian Taxation Office before you sign a contract. That determination confirms how much you can withdraw and when. If you are moving quickly to secure a property, the timing may not align.

The scheme works well for buyers who plan at least 12 months ahead and make regular contributions over multiple financial years. It is less useful for buyers who need to act within weeks or who have already accumulated their deposit outside super.

Do Not Assume All Lenders Offer the Same Features

Offset accounts, redraw facilities, extra repayment limits, and rate discounts vary widely between lenders. One lender may offer a full offset account on both fixed and variable loans, while another may not offer offset at all on fixed terms. One lender may allow unlimited extra repayments on a variable loan, while another caps them at $10,000 per year even on variable products.

If you plan to keep savings in offset to reduce interest, or if you receive irregular income such as bonuses or commissions and want the ability to pay extra without restriction, those features need to be confirmed before you commit to a lender. The lowest rate does not always deliver the lowest cost over time if the loan structure does not match how you manage money.

Working with a broker lets you compare loan features across multiple lenders and match the product to your circumstances rather than adjusting your circumstances to fit the product. That is particularly relevant for Sunshine Coast buyers who may have income from seasonal work, tourism, or self-employment and need flexibility in how and when they make repayments.

Call one of our team or book an appointment at a time that works for you. We work with Sunshine Coast buyers through every stage of the home loan application process, from understanding your borrowing capacity through to settlement and beyond.

Frequently Asked Questions