Episode 2: What Every First Home Buyer Needs to Know in 2025

Episode 2: What Every First Home Buyer Needs to Know in 2025
The Aussie Lending Lounge | Hosted by David Chae

Welcome back to The Aussie Lending Lounge. I’m David Chae, CFO at Loans AU, and today we’re diving into a topic that’s top of mind for many Australians — buying your very first home in 2025.

If you're a first home buyer, you’ve probably been reading headlines, scrolling through listings, and maybe even checking your borrowing power online. But with rising property prices, interest rate shifts, and changing government schemes — where do you even begin?

In this episode, we’ll cover the key things you need to know before you buy, how to prepare, and the common mistakes to avoid so you can feel confident about stepping into the property market this year.

Let’s start with what’s changed in 2025.

The government has expanded support for first home buyers through several schemes. These include the First Home Guarantee, Regional First Home Buyer Guarantee, and shared equity schemes where the government contributes up to 40% of the property price. These programs are game-changers — especially if you don’t have a 20% deposit saved.

That leads us to the first thing every first home buyer should know in 2025 — you don’t always need a big deposit.

Many buyers still believe they need 20% or more saved to get a loan. But with schemes like the First Home Guarantee, you may be able to buy with as little as 5%, and avoid Lenders Mortgage Insurance completely. Some buyers with single income or regional locations may qualify for even lower deposits.

The second thing to understand is your borrowing power — and how it’s calculated.

In 2025, most lenders are applying slightly tighter assessment rates. That means your maximum borrowing amount may be lower than it was in previous years. Lenders are not just looking at your income, but also your living expenses, liabilities, and even spending habits.

So before you start house hunting, it’s important to sit down with a broker and get a clear picture of what you can actually afford — not just what online calculators tell you.

Number three: Credit health matters.

A lot of first home buyers don’t realise that a missed bill, Buy Now Pay Later account, or short credit history can impact your approval. In today’s lending environment, your credit report plays a big role.

If you're thinking about buying in the next 6–12 months, start tidying up your finances now. Pay off smaller debts, avoid late payments, and don’t apply for multiple credit cards or personal loans. A good broker will help you position your application in the best possible light.

Next — let’s talk grants and incentives.

In addition to federal schemes, many states and territories are still offering first home owner grants, stamp duty discounts, and rebates. These can save you thousands. But the rules are different in each state and change regularly, so it’s crucial to check the latest info — or work with someone who already knows it.

At Loans AU, we make sure our first home buyer clients are across every possible support available before they make an offer.

The fifth thing to know: Get pre-approval before you start shopping.

In 2025, properties are still moving fast in certain markets. Without pre-approval, you risk falling in love with a property that’s outside your borrowing limit — or worse, making an offer you can’t follow through on.

Pre-approval gives you a clear budget, helps with negotiations, and shows sellers and agents that you’re serious.

And finally — have a team around you.

Buying a home isn’t just a financial move, it’s an emotional one. Having a good broker, a buyer’s agent or conveyancer, and someone you trust to bounce questions off can make all the difference. Don’t do it alone.

To quickly recap, here’s what every first home buyer should know in 2025:

1. You may be able to buy with as little as 5% deposit

2. Borrowing power depends on more than income — expenses matter too

3. Clean up your credit early

4. Take advantage of grants and government schemes

5. Get pre-approved before you go house hunting

6. Build your support team

At Loans AU, we help first home buyers every day. We explain the process, match you with the right lender, and support you from pre-approval to settlement.

If you’re thinking about buying your first home this year, reach out to our team. We’re here to make lending simple — and your first home purchase a smooth, exciting experience.

Visit us at www.loansau.com or email theteam@loansau.com to get started.

Thanks for tuning in to The Aussie Lending Lounge. In the next episode, we’ll be breaking down fixed vs variable rates — and how to choose what’s right for you.

Until then, stay confident, stay curious — and remember, at Loans AU, we’ve got your back.