Avoid These 7 Mistakes When Buying Your First Home

Assuming You Need a 20% Deposit to Start

You do not need a 20% deposit to buy your first home.

Pharmacists often delay purchasing because they believe a full 20% deposit is required before they can apply. The Australian Government 5% Deposit Scheme allows eligible first home buyers to purchase with just 5% saved, and Housing Australia guarantees the difference between your deposit and 20% of the property value. No income cap applies under this scheme, and no LMI is payable. Applications are made through participating lenders, not directly through Housing Australia.

Consider a hospital pharmacist buying in regional Victoria with a 5% deposit. At the scheme's regional price cap, that buyer would need roughly 5% saved in genuine savings plus settlement costs. The scheme removes LMI, which would otherwise add several thousand dollars to the upfront cost. The same buyer using a standard loan with a 5% deposit would pay LMI unless they qualified for a professional LMI waiver.

Some lenders also offer low deposit options outside government schemes, including 10% deposit loans with reduced LMI for pharmacists in salaried roles. If you have less than 5% saved, a guarantor arrangement may allow you to borrow without paying LMI, though that option depends on a family member using their own property as security.

Overlooking State-Based Stamp Duty Concessions and Grants

Most states and territories provide stamp duty concessions or exemptions for first home buyers, and several offer grants for new builds.

In New South Wales, full stamp duty exemption applies to properties valued up to $800,000, with a sliding concession up to $1,000,000. In Victoria, full exemption applies up to $600,000, with concessions extending to $750,000. Queensland offers a full stamp duty concession on new homes with no price cap for contracts signed from May this year, and a first home concession on established homes that reduces duty by up to $17,350 for properties under $710,000. South Australia removed its price cap on stamp duty relief and the $15,000 grant for new homes in mid-last year. Western Australia now applies a single statewide threshold with no duty on homes up to $600,000 and concessional rates up to $800,000, replacing the previous Perth and regional distinction.

In our experience, pharmacists relocating interstate or purchasing in a state they have not lived in before often miss these concessions because they assume the rules are uniform across Australia. They are not. Each state administers its own scheme with different value caps, residency requirements, and definitions of what qualifies as a new home.

If you are buying in Queensland and choosing between an established home and a new build, the difference in duty alone may be several thousand dollars. The same applies in South Australia, where the $15,000 grant and full duty relief apply only to new homes, not established properties. Buyers of established homes in Tasmania no longer receive a duty exemption from July this year, while buyers in the ACT now receive full duty exemption regardless of property value or income.

Failing to Secure Pre-Approval Before You Start Looking

Pre-approval confirms your borrowing capacity and gives you a clear budget before you attend auctions or make offers.

Without pre-approval, you are estimating what you can afford based on online calculators or informal advice. Those tools do not account for your specific income structure, existing liabilities, or the serviceability policies of individual lenders. A community pharmacist with a base salary plus performance bonuses will be assessed differently to a hospital pharmacist on a fixed award rate, and some lenders will include 100% of your bonus income while others include only 50% or none at all.

Pre-approval also locks in your interest rate for a set period, typically three to six months depending on the lender. If you are comparing fixed and variable rate options, pre-approval gives you time to assess which structure suits your repayment strategy without the pressure of an unconditional contract.

Buyers who skip pre-approval and make offers based on assumed borrowing capacity often find themselves unable to settle, or they discover after signing a contract that they need a larger deposit or a co-borrower to meet serviceability requirements. Both scenarios can result in lost deposits or penalty clauses.

Using All Your Savings for the Deposit and Forgetting Settlement Costs

You need funds beyond your deposit to cover settlement, legal fees, inspections, and immediate costs after moving in.

Settlement costs typically include loan establishment fees, conveyancing or legal fees, building and pest inspections, title search fees, and any adjustments for council rates or strata levies paid by the seller. If you are using the 5% Deposit Scheme, you still need to budget for these costs on top of your 5% deposit. If you are buying an established home, you may also need to budget for immediate repairs or essential appliance replacements.

Buyers regularly underestimate how much cash they need at settlement and end up borrowing additional funds on a credit card or personal loan in the weeks after moving in. That additional debt affects your serviceability if you later want to refinance or apply for further credit.

If you are receiving a cash gift from a family member to help with your deposit, confirm with your lender whether that gift needs to be declared as genuine savings or a non-genuine contribution. Most lenders require a signed gift letter stating the funds do not need to be repaid. If the funds are classified as a loan rather than a gift, that liability may reduce your borrowing capacity.

Choosing a Loan Based Only on the Advertised Interest Rate

The advertised interest rate does not tell you whether a loan suits your repayment strategy or provides the features you will actually use.

A variable rate loan with an offset account allows you to park your salary and savings in the offset and reduce the interest charged on your home loan balance without making extra repayments. For a pharmacist with irregular income from overtime, locum shifts, or performance bonuses, an offset account provides flexibility because the funds remain accessible. A loan with a redraw facility allows you to make extra repayments and withdraw them later, but some lenders restrict how often you can redraw or charge fees for each withdrawal.

If you are considering a fixed rate loan because you want certainty over your repayment amount, confirm whether the loan allows extra repayments and whether break costs apply if you sell or refinance before the fixed term ends. Fixed rate loans typically allow extra repayments up to a set limit each year, often $10,000 to $30,000 depending on the lender. If you exceed that limit, or if you exit the loan early, break costs may apply.

Some buyers split their loan between fixed and variable portions to balance repayment certainty with offset flexibility. The fixed portion provides a stable repayment amount, while the variable portion allows full use of an offset account. The structure you choose should reflect how you manage cash flow, not just which rate looks lower on a comparison site.

Ignoring Eligibility Criteria for Government Schemes

Each government scheme has specific eligibility requirements, and assuming you qualify without checking the criteria can delay your application or disqualify you entirely.

The 5% Deposit Scheme requires you to be purchasing your first home, and at least one applicant must be an Australian citizen or permanent resident. The property must be owner-occupied, and you must move in within 12 months of settlement. The property price must fall within the applicable price cap for your state or territory and location, and both the purchase price and the lender's valuation must be at or below that cap. If the lender values the property below your purchase price, the lower figure is used to determine scheme eligibility.

Help to Buy has a household income cap of $100,000 for individuals and $160,000 for couples or single parents. The scheme is not available in Tasmania, and it cannot be combined with the 5% Deposit Scheme. If your household income exceeds the cap by even one dollar, you will not be eligible.

State grants and concessions each carry their own residency, citizenship, and occupancy requirements. In Queensland, at least one applicant must be an Australian citizen, permanent resident, or specified foreign retiree for contracts signed from August this year. In South Australia, buyers are ineligible if they or their spouse or domestic partner have ever owned residential property in Australia, for contracts entered into from February this year. In Western Australia, buyers must occupy the home for at least six continuous months starting within 12 months of settlement to retain the grant or concession.

If you do not meet the residency requirement or you fail to move in within the specified time frame, you may be required to repay the grant or concession in full, including any duty that was waived.

Not Speaking to a Broker Who Understands Pharmacist Income Structures

Pharmacist income is assessed differently depending on your role, and a broker who does not understand how allowances, overtime, and bonuses are treated by different lenders will underestimate your borrowing capacity.

A hospital pharmacist on an award rate may receive penalties, shift allowances, and overtime that make up a significant portion of total income. Some lenders include 100% of that income in their serviceability assessment if it has been received consistently for at least three months, while others include only 80% or exclude it entirely. A community pharmacist with a mix of base salary and performance-based bonuses will face similar variation in how that income is treated.

If you have recently moved from a graduate program to a registered role, or from a salaried position to a contractor or locum arrangement, your income structure has changed and lenders will assess your application differently. Contractors and locums are often required to provide additional documentation, including ABN registration, tax returns, and evidence of ongoing contracts, even if total income is higher than it was in a salaried role.

A broker who works regularly with pharmacists understands which lenders assess your income structure favourably and which loan products provide the features that suit your cash flow. That knowledge directly affects how much you can borrow and which home loan options are available to you.

Call one of our team or book an appointment at a time that works for you. We will walk through your income documentation, confirm your eligibility for applicable schemes and concessions, and structure your application to reflect your actual borrowing capacity.

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