First Home Buyer Mistakes to Avoid (2026 Guide)

June 3, 2026

By Chaice Paterson, CEO & Founder, Low Deposit Homes | Updated June 2026

Buying your first home should be exciting, but it’s easy to make costly mistakes when you don’t know what you don’t know. Low Deposit Homes has helped more than 1,000+ Australian families achieve home ownership across Queensland and Victoria. Along the way, we’ve seen the same mistakes cost first home buyers thousands of dollars, delay their purchase, or stop them from buying altogether.

Here are the 10 biggest first home buyer mistakes we see and how to avoid them.

1. Waiting Until You Have a 20% Deposit

This is the most expensive mistake many first home buyers make.

A lot of people believe they need a 20% deposit before they can buy. In reality, many Low Deposit Homes clients purchase with significantly less.

For example:

In Queensland, a $950,000 home would traditionally require around $190,000 for a 20% deposit.
However, eligible buyers may be able to purchase with a 5% deposit of just $47,500, potentially supplemented by available grants and government schemes.
In Victoria, an $850,000 home would traditionally require around $170,000 for a 20% deposit.
However, eligible buyers may be able to purchase with a 5% deposit of just $42,500, potentially supplemented by available grants and government schemes.

With the First Home Guarantee, eligible buyers can purchase with a 5% deposit and avoid Lenders Mortgage Insurance (LMI).

Depending on your state and eligibility, first home buyers may also qualify for substantial government incentives, including the $30,000 First Home Owner Grant in Queensland and the $10,000 First Home Owner Grant in Victoria when building a new home.

The longer you wait to save 20%, the greater the risk that property prices rise faster than your savings.

2. Not Claiming Every Grant You’re Entitled To

Many first home buyers miss out on tens of thousands of dollars simply because they don’t know what’s available.

Depending on your circumstances, you may be eligible for:

The recently introduced Help to Buy Scheme can be particularly powerful, with the government contributing up to 40% of the purchase price for eligible buyers, significantly reducing the amount you need to borrow.

At Low Deposit Homes, helping buyers maximise every available grant and scheme is a key part of our process.

3. Getting Pre-Approval Too Late (or Not at All)

Pre-approval tells you exactly how much you can borrow before you fall in love with a property you can’t afford.

It also demonstrates to sellers, developers, and land agents that you’re a serious buyer.

Get pre-approved before you start your property search. It’s free, and it can save a lot of disappointment.

4. Only Considering Established Homes

Many first home buyers automatically focus on established homes without comparing the financial advantages of building new.

New builds often provide better value because:

You may qualify for the FHOG
Reduce the upfront cost of stamp duty
You may qualify for additional concessions and incentives
Fixed-price building contracts can reduce budget uncertainty
Everything is brand new, reducing maintenance costs
You can customise your home to suit your needs

One of the biggest advantages often overlooked is stamp duty.

For house and land packages, stamp duty is generally calculated on the land component only rather than the completed home value. This can save buyers thousands compared to purchasing an established property.

For many Low Deposit Homes clients, this is one of the largest upfront savings available.

5. Ignoring the True Cost of an Established Home

That “cheap” established home may require $20,000–$50,000 in repairs and renovations during the first few years.

Common surprises include:

Electrical upgrades
Plumbing repairs
Pest damage
Roof repairs
Kitchen renovations
Bathroom upgrades

When comparing properties, always look at the total cost of ownership, not just the purchase price.

6. Not Using a Broker (or Using the Wrong One)

Banks can only offer their own products.

A mortgage broker can compare multiple lenders and help identify loan options that suit your circumstances.

However, not all brokers specialise in first home buyers.

Work with a broker who understands grants, guarantees, concessions, and government schemes so you don’t miss opportunities that could significantly reduce your upfront costs.

7. Forgetting About Additional Costs

Your deposit isn’t the finish line.

Even if you’re purchasing a house and land package where stamp duty is often significantly reduced or effectively eliminated for many first home buyers, there are still costs to budget for.

These may include:

Conveyancing: approximately $1,500–$3,000
Building insurance
Utility connections
Moving expenses
Minor settlement costs

A sensible rule of thumb is to keep an additional $5,000 available beyond your deposit.

8. Buying on Emotion Instead of Numbers

It’s easy to become emotionally attached to a property and stretch beyond your budget.

But becoming “house poor”—where most of your income goes toward mortgage repayments—can create ongoing financial stress.

As a general guide, try to keep repayments below 30% of gross household income.

9. Not Understanding What You’re Signing

Loan documents, building contracts, and sale contracts contain important legal obligations.

Never assume every clause is standard.

Seek independent legal advice before signing and make sure you understand exactly what you’re committing to.

10. Moving Too Slowly When the Right Opportunity Appears

Many first home buyers spend months researching, only to miss out when a great opportunity becomes available.

In today’s market, quality land can move quickly.

At Low Deposit Homes, we’ve seen exclusive land releases attract more than 100+ applicants for fewer than 15 blocks.

If you’ve already completed your finance preparation and know your budget, you’re in a much stronger position to secure the opportunities that matter.

Why Working With the Right Team Matters

Buying your first home involves brokers, builders, solicitors, developers, government schemes, grants, contracts, and timelines.

Trying to manage everything alone can become overwhelming.

That’s why Low Deposit Homes guides buyers through the entire journey—from understanding your options and securing finance through to construction and collecting the keys.

After helping more than 1,000+ families achieve home ownership, we’ve learned that avoiding a few common mistakes can save buyers thousands of dollars and years of unnecessary delay.

FAQ

What is the biggest mistake first home buyers make?

Waiting too long to buy. Many first home buyers spend years saving for a 20% deposit when government schemes and grants may allow them to enter the market sooner.

Do I need a 20% deposit to buy my first home?

No. Eligible buyers may be able to purchase with a much smaller deposit through programs such as the First Home Guarantee, Help to Buy, and available state-based incentives.

Is building a new home better than buying established?

For many first home buyers, yes. New builds may provide access to grants, reduced stamp duty, fixed-price contracts, and lower maintenance costs compared to established homes.

Do house and land packages have stamp duty advantages?

Yes. Because stamp duty is generally calculated on the land value only rather than the completed home value, buyers can achieve significant savings compared to purchasing an established home. For example, on a $950,000 house and land package in Queensland, this can save approximately $26,775 in stamp duty compared to buying an established home at the same price.

Is Help to Buy available in Queensland and Victoria?

Eligible buyers in both Queensland and Victoria may be able to access the Help to Buy shared equity scheme, subject to government eligibility requirements and availability.

Ready to Avoid These Costly Mistakes?

Talk to the team at Low Deposit Homes. We’ll review your situation, explain your options, and help you understand exactly what grants, schemes, and opportunities may be available to you.

Disclaimer: This article contains general information only and does not constitute financial, legal, taxation, or financial product advice. Government schemes, eligibility requirements, property price caps, and lender policies may change. Always seek professional advice specific to your circumstances before making financial decisions.