How to buy a home in Australia: step-by-step guide
From saving a deposit to settlement, here’s a clear guide to buying a home in Australia.
Buying a home in Australia involves some key stages: setting your budget, saving a deposit, getting conditional approval, house hunting, making an offer, exchanging contracts, building and pest inspections, and settlement.
This guide walks through each step so you know exactly what to expect and what it costs. Unloan’s online process can streamline several of these stages, with no application fees and no ongoing fees.
What are the main steps to buying a home?
The basic home buying process in Australia follows these stages:
- Save a deposit – consider aiming for 20% of the property value to avoid paying Lenders Mortgage Insurance (LMI). A 5% deposit is possible through government guarantee schemes if you are eligible. Please note that Unloan does not participate in any government schemes.
- Check your borrowing capacity - lenders assess your income, debts, and expenses to determine how much you can borrow. Use Unloan’s borrowing power calculator for an estimate.
- Get conditional approval - a lender reviews your finances and gives a preliminary borrowing limit, typically valid for 3–6 months. This shows sellers you’re a serious buyer.
- Research properties and attend inspections - compare suburbs, property types, and prices. Try our Check a property tool to get property insights and local market activity.
- Make an offer or bid at auction - submit a written offer (private treaty) or register to bid at auction. Your solicitor or conveyancer reviews the contract before you sign.
- Exchange contracts - once your offer is accepted, contracts are exchanged. Most states offer a cooling-off period (except at auction).
- Consider arranging building and pest inspections - professional inspections can uncover any structural issues or termite damage before you commit.
- Settle the purchase - your lender transfers funds, legal ownership transfers to you, and you collect the keys. Settlement typically occurs 30–90 days after exchange.
How much does it cost to buy a home in Australia?
The total upfront cost of buying a home goes well beyond the deposit and can vary between states. For example, on a $700,000 property in NSW, a typical buyer might pay:
Please note that this is a simplified example and does not include all possible costs. Other costs such as Lenders Mortgage Insurance (LMI), may apply depending on your deposit size and loan type.
First home buyers may qualify for stamp duty exemptions or concessions. Please note that Unloan does not participate in any government schemes.
With Unloan, you save on application fees and ongoing fees, which may help reduce your upfront or ongoing costs.
How much deposit do you need to buy a home?
A 20% deposit is a common benchmark. On a $700,000 home, that’s $140,000. Saving 20% typically means you won’t need to pay Lenders Mortgage Insurance (LMI).
Some buyers may be able to purchase with less than a 20% deposit, depending on their circumstances and lender criteria. Under the Australian Government 5% Deposit Scheme, eligible first home buyers may be able to buy with a deposit of as little as 5% ($35,000 on a $700,000 home) without paying LMI.
Eligible single parents may be able to buy with a deposit of as little as 2% ($14,000 on a $700,000 home).
How do you check your borrowing capacity?
Your borrowing capacity is the amount a lender may be willing to lend you, based on your ability to repay the loan.
When assessing your borrowing capacity, lenders generally look at factors such as:
- Income - for example, your salary, rental income and other regular income sources
- Existing debts - such as personal loans, car loans, credit cards and HECS-HELP
- Living expenses - including your declared expenses and any lender benchmarks used in the assessment
- Credit history - including your credit report and repayment history
What is conditional approval?
Conditional approval (also called conditional pre-approval) is a lender’s indication that you’re eligible to borrow up to a certain amount for a home loan. It is not a guarantee of final approval, but it gives you a clear budget before you start house hunting. Conditional approval typically lasts 90 days, though some lenders offer validity periods of three to six months.
Conditional approval gives you a clear borrowing limit before you start your property search. This keeps you focused on homes you can realistically afford.
Sellers and real estate agents take offers more seriously from buyers with conditional approval. It signals that a lender has already reviewed your finances and that you are serious about purchasing.
Conditional approval is especially important if you plan to bid at auction. Auction bids are legally binding, with no cooling-off period and no ‘subject to finance’ clause.
Conditional approval vs unconditional approval
How do you search for the right property?
Once you have conditional approval, you can start searching for properties within your indicative budget. Try our Check a property tool to search for properties, get property insights and local market activity. You can also save properties to your account.
When comparing properties, some factors to consider include:
- Location and commute - how far the property is from your workplace, schools, public transport and shops
- Property type - for example, whether a house, townhouse or unit suits your needs and budget
- Condition and age - whether the property appears well maintained and whether it may need repairs or updates
- Strata or body corporate - if you are buying an apartment, townhouse or villa, review the strata records, fees and by-laws
- Local area factors - such as noise, traffic, flood risk, bushfire risk and nearby infrastructure
Attending inspections can help you compare properties in person. You may wish to take notes, photos where permitted and compare several properties before making a shortlist.
You may also want to get legal advice before signing a contract, especially if you are unsure about the terms or conditions.
How do you make an offer on a property?
When you find a property you want to buy, you can submit a written offer to the seller through the real estate agent.
An offer may include the price, deposit amount, proposed settlement period, and any conditions (such as finance approval or a building inspection), depending on your circumstances.
Private treaty vs auction
You may wish to have a solicitor or conveyancer review the contract of sale before you sign or bid. They can help identify any terms or property issues that may affect your purchase.
Do you need a building and pest inspection?
It’s highly recommended. A building and pest inspection is one of the most important steps before committing to a property.
A building inspection checks the structural condition of the property - including the roof, walls, foundations, plumbing, and electrical. A pest inspection checks for termite damage and other infestations.
If the inspection reveals serious issues, you can renegotiate the price, request repairs, or withdraw from the purchase (if your contract includes an inspection clause).
What happens after your offer is accepted?
Once your offer is accepted, you and the seller exchange signed contracts. This legally commits both parties to the sale.
During the settlement period (usually 30–90 days), your lender completes the final loan assessment, your conveyancer conducts title searches and checks for encumbrances, and both parties prepare for the transfer of ownership.
If you bought via private treaty, most states give you a cooling-off period (varies by state and territory) after exchange. During this time, you can withdraw from the sale - though you may need to forfeit some or all of the deposit.
What happens at settlement?
Settlement is the day you officially become the property owner. Your lender transfers the loan funds to the seller’s bank, your conveyancer handles the legal paperwork, and the title is transferred into your name.
On settlement day, you’ll also need to pay stamp duty (unless exempt) and any outstanding adjustments such as council rates. Your conveyancer manages these calculations.
After settlement, you collect the keys from the real estate agent. Make sure you’ve arranged building insurance from the date of exchange, the property becomes your responsibility from that point.
How much is stamp duty when buying a home?
Stamp duty (also called transfer duty) is a state government tax paid when you buy property. The amount depends on the property value and which state you’re buying in.
It’s usually payable within 30 days of settlement.
Stamp duty estimates by state ($700,000 property, owner-occupier)
Eligibility rules, property caps and timing rules vary by state and territory. Check the relevant state or territory revenue office or the Unloan stamp duty calculator to get an estimate.
What ongoing costs should you budget for after buying?
After settlement, you’ll need to budget for ongoing costs associated with owning a home. These include:
- Home loan repayments - typically your largest ongoing expense. Depending on your loan, you may also have account or service fees.
- Council rates - a local government charge that varies depending on your property and location.
- Home and contents insurance - helps protect your property and belongings. Costs can vary based on factors such as location, property type and level of cover.
- Utilities - such as electricity, gas (if applicable), water and internet. Costs will depend on usage, provider and household size.
- Maintenance and repairs - ongoing upkeep is part of home ownership. Costs can vary depending on the age, condition and size of the property.
- Body corporate or strata fees (if applicable) - for units, apartments or townhouses, these cover shared maintenance and common areas. Fees vary depending on the building and facilities.
Ready to start your home buying journey?
Apply online in minutes with no application fees, no ongoing fees, and an annual loyalty discount that gets better and better, every year (up to 30 years).*
Use Unloan’s calculators to estimate your borrowing power, repayments, and stamp duty, and then apply when you’re ready.
Unloan is a division of Commonwealth Bank of Australia.
Applications are subject to credit approval, satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000, and total borrowings per customer across all Unloan loans is $10,000,000. (For purchase loans a minimum 10% equity is required - however a Lenders Mortgage Insurance (LMI) premium and higher interest rate apply. In some cases, depending on the property’s location or type, an LMI premium may also be required for LVR between 70.01% to 80%). For loans with Lenders Mortgage Insurance (LMI) the minimum loan amount is $10,000, maximum loan amount is $3,000,000 and total borrowings per customer across all Unloan loans is limited to $3,000,000).
Unloan offers a 0.01% per annum loyalty discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.
*At Unloan, we do not charge any annual, application, banking, account, transaction, late or exit fees. In certain circumstances you may be required to pay a Lenders Mortgage Insurance (LMI) premium. Learn more about why this is applied and how it works. Government fees may also apply. Learn more about government fees here. Your current lender may charge an exit fee when refinancing.
Unloan is a division of Commonwealth Bank of Australia, and Commonwealth Bank does not provide tax (financial) advice under the Tax Agent Services Act 2009 (Cth). You should consider seeking independent tax advice from a registered tax agent, accountant or adviser before you make any decisions based on this information.
Applications are subject to credit approval, satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000, and total borrowings per customer across all Unloan loans is $10,000,000. (For purchase loans a minimum 10% equity is required - however a Lenders Mortgage Insurance (LMI) premium and higher interest rate apply. In some cases, depending on the property’s location or type, an LMI premium may also be required for LVR between 70.01% to 80%). For loans with Lenders Mortgage Insurance (LMI) the minimum loan amount is $10,000, maximum loan amount is $3,000,000 and total borrowings per customer across all Unloan loans is limited to $3,000,000).
Unloan offers a 0.01% per annum loyalty discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.
*At Unloan, we do not charge any annual, application, banking, account, transaction, late or exit fees. In certain circumstances you may be required to pay a Lenders Mortgage Insurance (LMI) premium. Learn more about why this is applied and how it works. Government fees may also apply. Learn more about government fees here. Your current lender may charge an exit fee when refinancing.
Applications are subject to credit approval, satisfactory security and minimum deposit requirements. Full terms and conditions are found on our Unloan Terms and Conditions. Modified Terms and Conditions will be set out in our Notice of Variation Agreement, if you are approved. This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.
Unloan offers a 0.01% per annum loyalty discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.
*At Unloan, we do not charge any annual, application, banking, account, transaction, late or exit fees. In certain circumstances you may be required to pay a Lenders Mortgage Insurance (LMI) premium. Learn more about why this is applied and how it works. Government fees may also apply. Learn more about government fees here. Your current lender may charge an exit fee when refinancing.
