First Home Buyer Myths – Debunked!

Buying your first home is one of life’s biggest milestones, but it can also feel like one of the most confusing. Between social media advice, well-meaning friends and family, and endless online opinions, it’s hard to know what’s fact and what’s fiction. So, lets clear the air. Here are some of the most common first home buyer myths – debunked!
 
Myth 1: You NEED a 20% deposit to buy a home.
While a 20% deposit can help you avoid Lenders Mortgage Insurance (LMI) it is not a requirement. In fact, many lenders offer home loans as low as 5%, provided you meet certain criteria such as stable employment, good credit and a strong savings record. According to the Australian Securities and Investments Commission (ASIC), LMI is designed to protect the lender, not the borrower, meaning that it is an additional cost that can be avoided with a higher deposit, but it doesn’t block you from entering the market with less.
For eligible first home buyers, government initiatives can make buying with a smaller deposit even more achievable. So, even if you don’t have a full 20%, lenders are flexible in how they assess your deposit. Some may accept gifted funds from family or take into account consistent rent and savings patterns as proof of your ability to manage repayments.
The key takeaway? The 20% rule is more tradition than law. With the right strategy, and guidance, you can explore a wide range of lending and support options that fit your situation. A brokers role is to compare lenders, explain LMI implications, and help you structure you application in a way that maximises your borrowing power while keeping costs manageable.
 
Myth 2: you can’t buy if you have a HECS-HELP debt
A student loan won’t automatically stop you from getting a home loan. Lenders simply include your HECS or HELP repayment in your overall affordability assessment. As long as you can comfortably manage the repayment alongside other debts and living expenses, you are still a strong candidate. Its not about having a HECS debt, its about showing that you can manage your money responsibly.
 
Myth 3: You can’t get help as a first home buyer
There are multiple government grants and schemes designed to make your first step onto the property ladder easier, and they can make a significant difference to your borrowing power and upfront costs,
                First Homeowner Grant: This grant provides a one-off payment for eligible first home buyers purchasing or building a new home. The amount and eligibility criteria vary by state and territory, for example, up to $10,000 in New South Wales.
                The 5% Deposit Scheme: This program helps eligible buyers purchase with as little as 5% deposit, without paying Lenders Mortgage Insurance. The government acts as a guarantor for up to 15% of the loan, making it easier to get approved. 
                Stamp Duty Concessions and Exceptions: Many states and territories offer reduced or waived stamp duty for first home buyers, which can save you tens of thousands of dollars depending on the property value and location. For example, in NSW, homes valued up to $800,000 may qualify for a full exemption.
These incentives are designed to boost housing affordability and encourage first-time buyers to enter the market, an important economic policy goal given rising property prices and slower wage growth in recent years.

Myth 4: The process is too hard
Yes, buying your first home can feel complex, but it doesn’t have to be overwhelming. There is plenty of expert support and clear advice out there to make this process achievable. Mortgage brokers can walk you through the stages and help you secure the right loan for your goals.
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The Bottom Line
Don’t let outdated advice or online myths hold you back. The truth is first home buyers today have more tools, support and opportunities than ever before. With the right guidance, owning your first home might be closer than you think.
Mortgage brokers can play key roles here. They can help you navigate these myths and programs, check your eligibility, and structure your loan so you can make the most of every available benefit.