When to Start Preparing Your First Home Purchase

Getting your deposit, documents and loan structure sorted before you start inspecting properties means you can move when the right place shows up.

Purchase preparation matters because lenders assess your application on evidence you can provide now, not on what you expect your situation to look like in six months. ADF members in NSW have access to multiple schemes that reduce deposit requirements and eliminate LMI, but each requires different documentation and timing.

How Much Deposit Do You Actually Need

The deposit you need depends on which scheme you qualify for and whether you're buying new or established. Under the Australian Government 5% Deposit Scheme, eligible first home buyers can purchase with a 5% deposit and no LMI. Housing Australia guarantees the difference between your deposit and 20% of the property value. The scheme has no income caps and no annual place limits. Applications go through participating lenders, not directly to Housing Australia.

In NSW, the property price cap under this scheme is $1,500,000 for Sydney. If you're buying in a regional area of NSW, a separate cap applies. Some lenders also offer LMI waivers for ADF members outside government schemes, which can bring your deposit requirement down to 10% on properties that exceed the scheme caps or don't meet scheme eligibility.

Consider a member posted to Williamtown RAAF Base buying an established home. They've saved a 5% deposit through salary sacrifice over two years and meet the residency and occupancy requirements for the scheme. Because they're applying through a participating lender and the property falls under the regional cap, they avoid LMI and proceed with the 5% deposit. That's the difference between needing $30,000 and needing $60,000 in cash.

NSW Stamp Duty Concessions and How They Apply

NSW offers a full stamp duty exemption on properties up to $800,000 for eligible first home buyers. A sliding concession applies on properties between $800,000 and $1,000,000. For vacant land, the full exemption applies up to $350,000, with a concession phase-out at $450,000.

These concessions apply to both new and established homes, provided the property is your principal place of residence. You don't pay the concession directly to the lender. It's claimed through your conveyancer or solicitor at settlement, which reduces the cash you need on the day.

In our experience, members underestimate how much this concession affects borrowing capacity. Removing $30,000 in stamp duty from your upfront costs means you can put that cash toward deposit, settlement costs, or holding it in an offset account from day one. The concession doesn't change the purchase price, but it changes what you need in your account at settlement.

What the First Home Owner Grant Covers in NSW

NSW provides a $10,000 FHOG for new builds or substantially renovated homes only. The grant doesn't apply to established homes. The purchase cap is $600,000, or $750,000 for land and build contracts.

The FHOG is paid after settlement, not before. You can't use it as part of your deposit unless your lender allows you to include it in your loan structure, which some do. It's typically paid within 10 to 12 weeks of lodging your application with Revenue NSW.

If you're buying a house and land package near a base such as Richmond or Kapooka, the grant applies as long as the contract is for a new home and falls within the cap. You can combine the FHOG with the 5% Deposit Scheme and the stamp duty concession, which means a significantly lower upfront cost on a new build compared to an established home at the same price.

Using the First Home Super Saver Scheme to Build Your Deposit

The FHSS Scheme lets you make voluntary contributions into your super fund and withdraw eligible amounts to use as a deposit. You can withdraw up to $15,000 from any one financial year, with a total cap of $50,000. Concessional contributions are taxed at 15% instead of your marginal rate, which makes this an effective way to build a deposit if you're still 12 to 24 months away from buying.

You need to apply for a determination from the ATO before signing a purchase contract. Once the ATO approves your release, the funds are paid to you, not directly to the lender or vendor. The process takes several weeks, so factor that into your timeline.

As an example, a member contributing $15,000 per year for three years builds $45,000 in eligible contributions. After tax and the release process, they receive a net amount that can go toward deposit or settlement costs. This works alongside other schemes and doesn't restrict your ability to use the 5% Deposit Scheme or claim the stamp duty concession.

When to Get Pre-Approval and What It Locks In

Pre-approval confirms how much a lender is willing to lend you based on your current income, expenses and credit position. It's valid for three to six months depending on the lender. Getting pre-approval before you start making offers means you know exactly what you can afford and can move quickly when you find a property.

Lenders assess your application using payslips, tax returns, bank statements and a credit check. ADF members need to provide proof of service and income, including allowances that can be included in serviceability. Some allowances are treated as guaranteed income, others aren't. Your broker will know which lenders accept which allowances.

We regularly see members lose out on properties because they didn't have pre-approval in place. A vendor with multiple offers will choose the buyer who can settle quickly and with certainty. Pre-approval gives you that certainty and removes one variable from the negotiation.

Call one of our team or book an appointment at a time that works for you.

Frequently Asked Questions