Everything You Need to Know About Property Purchase Prep

Getting your finances sorted before you start looking at properties gives you a clear budget and puts you in a position to move quickly when you find the right home.

Maroochydore attracts a mix of first home buyers, from young professionals working in the health precinct to families drawn to the schools and beach access. The Cotton Tree area and newer developments around the Maroochydore City Centre have seen steady demand, which means knowing your borrowing capacity and having pre-approval in place can make the difference between securing a property and missing out.

How Much Deposit Do You Actually Need?

Most first home buyers in Queensland can purchase with a 5% deposit under the expanded First Home Guarantee, which removes the need for Lenders Mortgage Insurance. If you're buying a property at $550,000 with a 5% deposit, you'd need $27,500 in genuine savings, plus another $8,000 to $12,000 for conveyancing, building and pest inspections, and loan establishment fees. A 10% deposit gives you access to more lenders and sometimes better pricing, but it's not essential if you qualify for the guarantee.

Consider a buyer looking at a two-bedroom unit near Ocean Street. With a $500,000 purchase price, a 5% deposit of $25,000, and $10,000 in settlement costs, they'd need around $35,000 ready to go. That buyer accessed the First Home Guarantee, avoided LMI entirely, and kept $10,000 in reserve rather than stretching to a 10% deposit and running their savings dry.

Gifted deposits from immediate family are accepted by most lenders, but the money needs to be genuinely gifted, not a loan you're expected to repay. Some lenders will ask for a signed gift letter. If you've been saving through the First Home Super Saver Scheme, you can withdraw up to $50,000 from your super to add to your deposit, which helps if you've been contributing the maximum $15,000 per year.

What Queensland Grants and Concessions Apply?

Queensland offers a $30,000 grant for eligible first home buyers purchasing or building a new home valued under $750,000, available until 30 June 2026. For established homes, you can access a full stamp duty concession on properties up to $700,000, which can save you around $15,000 to $20,000 depending on the purchase price. These concessions stack with the federal First Home Guarantee, so you can combine a 5% deposit with the state grant if you're buying new.

The $30,000 grant applies only to new builds, which includes house and land packages or newly constructed units purchased from a developer. If you're buying an established home in Maroochydore, the stamp duty concession is the main benefit. For a $600,000 established property, you'd pay no stamp duty at all, which immediately reduces your upfront costs.

You can't access the Queensland grant and the NSW or Victorian equivalents simultaneously, but you can use the grant in combination with federal schemes. If you've lived in Queensland for at least 12 months and never owned property anywhere in Australia, you're generally eligible.

Understanding Your Borrowing Capacity

Your borrowing capacity depends on your income, living expenses, existing debts, and the deposit you have available. Lenders assess your income after tax, subtract your regular expenses and any debt repayments, then calculate how much you can afford to borrow based on a loan serviceability buffer that's typically around 3% above the current interest rate.

In a scenario where a single buyer earns $85,000 a year with no dependents, no car loan, and minimal credit card debt, they might be able to borrow around $450,000 to $480,000 depending on the lender and current rates. Adding a partner's income increases that capacity significantly, but if either applicant has HECS debt or personal loan repayments, that reduces the amount you can borrow because lenders factor in those ongoing commitments.

Closing credit cards you don't use and paying down small debts before applying can lift your capacity. Even a $5,000 credit card limit you never touch gets treated as if you could max it out tomorrow, which reduces your borrowing power by around $20,000 to $25,000 depending on the lender's assessment.

Variable or Fixed Interest Rates for Your First Loan?

A variable rate gives you flexibility to make extra repayments without penalty and usually includes an offset account, which can save you interest over time if you keep savings in the account. A fixed rate locks in your repayments for a set period, usually one to five years, which makes budgeting more predictable but limits your ability to make large extra repayments without incurring break costs.

Many first home buyers split their loan, fixing a portion for certainty and leaving the rest variable for flexibility. If you fix 60% of a $450,000 loan and leave 40% variable, you get stable repayments on the majority while keeping access to offset and redraw on the remainder. That structure works if you expect your income to increase or you want the option to pay down the loan faster without restrictions.

Home loan options vary between lenders, and not all offer the same split loan flexibility or offset features. Some lenders charge higher rates on small fixed portions, so the structure needs to match your loan size and deposit.

Getting Your Application Documents Ready

Your home loan application will require proof of income, proof of savings, identification, and details of any liabilities. If you're a PAYG employee, that means your two most recent payslips, your last two years of tax returns, and recent bank statements showing your savings history. If you're self-employed, lenders typically want two years of financials, tax returns, and a notice of assessment from the ATO.

Savings need to show a genuine savings history, which means the deposit has been in your account for at least three months. If a lump sum appears in your account the week before you apply, most lenders will ask where it came from and whether it's genuinely yours to keep. If it's a tax refund, bonus, or gifted amount, you'll need to provide evidence.

If you've been renting, a 12-month rental history showing consistent payments can strengthen your application because it demonstrates you can manage regular housing costs. Keep rent receipts or bank statements showing your rent payments, particularly if you've been paying an amount similar to what your mortgage repayments will be.

Why Pre-Approval Matters Before You Start Looking

Pre-approval gives you a conditional commitment from a lender based on your financial position, which means you know your budget before you attend inspections or make offers. It's valid for three to six months depending on the lender, and while it's not a guarantee, it significantly reduces the chance of your finance falling through once you've found a property.

Maroochydore's market moves quickly in certain price brackets, particularly for well-located units under $600,000 and houses close to schools or the beach. Turning up to an inspection without pre-approval puts you at a disadvantage if another buyer has their finance sorted and can move immediately. Agents and sellers take buyers with pre-approval more seriously because there's less uncertainty around whether the sale will proceed.

Pre-approval also uncovers any issues with your application before you're under contract, which gives you time to address problems like insufficient savings, unclear income documentation, or credit file issues that might delay settlement.

Structuring Your Loan for Offset or Redraw

An offset account is a transaction account linked to your home loan where the balance reduces the interest you're charged without actually paying down the principal. If you have a $450,000 loan and $20,000 in your offset account, you're only charged interest on $430,000. It's useful if you're building savings for renovations, a car, or other goals, because the money remains accessible while still saving you interest.

Redraw lets you access extra repayments you've made above the minimum, but it's not as flexible as offset because you need to request the funds and some lenders charge redraw fees or place conditions on how much you can withdraw. If you're disciplined with money and want every dollar working to reduce interest, offset is the better option. If you're unlikely to keep a large buffer in a separate account, redraw still gives you some flexibility without needing to maintain a second account.

Not all lenders offer offset on every loan product, and some only include it on variable portions of split loans. If offset is important to you, make sure it's part of the loan structure from the start, because adding it later isn't always possible.

Call one of our team or book an appointment at a time that works for you. We'll walk you through your deposit, your capacity, the grant options available, and the loan structure that fits your situation without making it more complicated than it needs to be.

Frequently Asked Questions