Buying First Home Melbourne – A Complete Guide for First-Time Buyers _ FHBA
                     Buying First Home Melbourne – A Complete
Guide for First-Time Buyers | FHBA
Buying your first home in Melbourne is an exciting milestone, but it can also be overwhelming.
With rising property prices, government grants, and different loan options, it’s crucial to have a 
clear plan. In this guide, we’ll break down everything you need to know about buying first 
 home Melbourne  and how you can take advantage of available incentives.
1. Understanding the Melbourne Property Market
Melbourne’s property market is one of Australia’s most competitive, with strong demand in both 
city and suburban areas. Prices vary depending on location, with inner-city properties being 
more expensive compared to outer suburbs. Buying first home Melbourne requires thorough 
research to find an area that fits your budget and lifestyle.
Popular Areas for First-Home Buyers
● Western Suburbs (Werribee, Tarneit, Melton) – More affordable and family-friendly.
● Northern Suburbs (Craigieburn, Epping) – Great transport links and new 
developments.
● Eastern Suburbs (Ringwood, Croydon) – Established areas with good amenities.
● South-East Suburbs (Cranbourne, Berwick) – Growing infrastructure and schools.
2. Government Grants and Incentives for First-Home 
Buyers
One of the biggest advantages of buying first home Melbourne is accessing government 
assistance programs. These incentives can significantly reduce upfront costs.
First Home Owner Grant (FHOG)
● Eligible first-home buyers can receive $10,000 for purchasing a new home valued up to 
$750,000.
Stamp Duty Concessions
● If your home is under $600,000, you may be eligible for full stamp duty exemption.
● Properties valued between $600,000 and $750,000 qualify for concessional rates.
First Home Guarantee (FHG)
● This scheme allows eligible first-home buyers to purchase with just a 5% deposit, 
without paying Lenders Mortgage Insurance (LMI).
Victorian Homebuyer Fund (Shared Equity Scheme)
● The government can contribute up to 25% of the property price, reducing the deposit 
needed.
3. How Much Deposit Do You Need?
Most banks require a 20% deposit to avoid LMI. However, with government-backed schemes, 
you may be able to buy with as little as 5% deposit.
For example:
● Property Price: $600,000
● 20% Deposit: $120,000 (to avoid LMI)
● 5% Deposit: $30,000 (if using First Home Guarantee)
4. Home Loan Options for First-Home Buyers
When buying first home Melbourne, choosing the right home loan is crucial. Here are some 
options:
Low Deposit Home Loans
● Suitable for buyers with 5-10% deposit.
● May require LMI unless using government schemes.
Fixed vs. Variable Rate Loans
● Fixed Rate Loans: Interest stays the same for a set period (e.g., 3-5 years), offering 
stability.
● Variable Rate Loans: Interest can fluctuate, which might lead to lower repayments 
when rates drop.
Offset & Redraw Facilities
● These options help reduce interest payments and allow you to access extra funds if 
needed.
5. Steps to Buying Your First Home in Melbourne
Step 1: Set Your Budget
● Assess your savings, income, and expenses.
● Use a home loan calculator to estimate repayments.
Step 2: Get Pre-Approved for a Loan
● Approach banks or mortgage brokers to secure pre-approval.
● This shows sellers that you are a serious buyer.
Step 3: Start House Hunting
● Visit open homes and research the suburb thoroughly.
● Consider proximity to schools, transport, and amenities.
Step 4: Make an Offer & Sign Contracts
● Negotiate the price and sign the Contract of Sale.
● Pay the deposit (usually 10% of the property price).
Step 5: Settlement & Move-In
● Your lender finalizes the loan, and settlement occurs (typically within 30-90 days).
● Collect your keys and move into your new home!
6. Common Challenges and How to Overcome Them
High Property Prices
● Consider buying in outer suburbs where prices are more affordable.
● Look into shared equity schemes for financial assistance.
Saving for a Deposit
● Use a First Home Super Saver Scheme (FHSSS) to save with tax benefits.
● Explore low deposit home loans to enter the market sooner.
Loan Approval Issues
● Ensure your credit score is strong by paying off existing debts.
● Have stable employment and sufficient income to meet lender requirements.
Conclusion
Buying first home Melbourne is a major financial step, but with the right knowledge and 
planning, it’s an achievable goal. Take advantage of government grants, low deposit loans, 
and expert advice to make your homeownership dream a reality. Whether you’re looking for a 
home in the city or the suburbs, there are plenty of opportunities waiting for you. Start your 
journey today!