First-Home Buyer Mistakes That Can Cost You Thousands

First-Home Buyer Mistakes That Can Cost You Thousands

Buying your first home is a major life milestone—and a major financial decision. With all the excitement, it’s easy to rush into things, overlook hidden costs, or let emotions take the wheel. Unfortunately, these common missteps can cost thousands in the long run.

Whether you’re just beginning your search or almost ready to buy, understanding the most common first-home buyer mistakes can help you avoid costly surprises and start your journey on solid ground.

Not Knowing Your Borrowing Power

Many first-time buyers start house hunting before they know how much a bank will actually lend them. Loan approvals are based on income, debts, spending habits, and credit history.

• Get a pre-approval before looking at properties.

• Check your credit score—it affects both approval and interest rates.

• Reduce existing debt (like credit cards or personal loans) to boost borrowing capacity.

Just because you’re approved for a certain amount doesn’t mean you should borrow it. Leave room for unexpected expenses and lifestyle flexibility.

Underestimating the Hidden Costs

Your deposit is only the beginning. There are several upfront and ongoing costs that often catch first-home buyers off guard.

• Stamp duty (although some state exemptions may apply)

• Lenders Mortgage Insurance (LMI) if you’re borrowing more than 80%

• Legal and conveyancing fees

• Building and pest inspections

• Loan application and settlement fees

It’s wise to budget an additional 5–7% of the property price to cover these extras.

Missing Out on Government Grants and Incentives

Many first-home buyers don’t realise they’re eligible for grants and support schemes that can reduce costs or make it easier to get into the market.

• First Home Owner Grant (FHOG)

• Stamp duty concessions

• First Home Guarantee (previously FHLDS) allowing low deposit purchases without LMI

• State-based shared equity schemes

These incentives vary by state and eligibility criteria, so it’s worth doing your research early.

Letting Emotions Drive the Purchase

Falling in love with a property can lead to overpaying or ignoring red flags. Buying a home is emotional—but it’s also a financial decision.

• Stick to your budget, even if competition heats up.

• Don’t rush. Take time to evaluate the suburb, price trends, and future plans.

• Consider getting an independent valuation to confirm market value.

Buying a home is not just about today—it should support your lifestyle and goals in the years ahead.

Choosing the Wrong Loan Structure

Many first-home buyers focus on getting approved, not on choosing the right type of loan. That can lead to higher repayments or unnecessary interest.

• Compare fixed vs. variable rates based on your risk appetite and cash flow.

• Look for features like offset accounts or redraw facilities to save on interest.

• Understand all fees, especially if you want flexibility to refinance or make extra repayments.

A mortgage broker can help match the right product to your financial situation—not just the one that gets you the biggest loan.

Get It Right the First Time

Buying your first home is exciting—but getting it wrong can cost more than just money. With proper preparation, the right advice, and a clear understanding of the process, you can avoid these common traps and make confident, informed decisions.

Buying your first home can feel overwhelming, but you don’t have to figure it all out alone. Book an investment session with PropVest today and take the first step toward a smarter, more confident home-buying journey.

Disclaimer: This article is for general information only and does not constitute financial, legal, or lending advice. You should seek advice from a qualified professional before making any property or investment decisions.