Do You Know When to Start Preparing Your First Home Purchase?

Most first home buyers in Lakelands start looking at properties before they've worked out what they can borrow or what deposit they actually need.

That approach costs time. Lenders need to see genuine savings held for at least three months, and if you're planning to use a government scheme, some require you to hold a determination or meet occupancy conditions before you can exchange contracts. If you wait until you've found a property to start preparing, you'll either lose the home or rush the process and miss better loan options.

How Long Genuine Savings Need to Sit in Your Account

Genuine savings must be held in your account for at least three months before a lender will count them toward your deposit. The funds need to stay in the same account during that period, and the lender will review your statements to confirm the balance hasn't been inflated by a recent lump sum that isn't from your own income.

Consider a buyer in Lakelands who receives a $15,000 gift from family in early September and deposits it immediately. If they apply for pre-approval in late October, that $15,000 won't count as genuine savings because it hasn't been held for three months. The buyer can still use it as part of the deposit under most lenders' gifted deposit policies, but they'll need to show genuine savings separately. If the loan policy requires 5% genuine savings and the buyer hasn't built that amount over time, the application won't proceed until they do.

Lenders define genuine savings as funds accumulated through regular employment income, rent savings, or consistent transfers into a savings account. Sale proceeds from assets like a car or inheritance can sometimes be accepted, but policies vary. A term deposit held for three months or longer will generally qualify. Funds that appear suddenly without a clear explanation usually won't.

What the 5% Deposit Scheme Actually Requires

The Australian Government 5% Deposit Scheme allows eligible first home buyers to purchase with a 5% deposit and no lenders mortgage insurance. You apply through a participating lender, not directly through Housing Australia.

In Lakelands, the property price cap is $850,000 because the suburb falls within the Perth metropolitan postcode classification under the scheme. Both the purchase price and the lender's valuation must sit at or below that cap. If the property you want to buy is listed at $850,000 but the lender's valuer assesses it at $820,000, the scheme will apply based on the $820,000 figure. If the purchase price exceeds $850,000, the scheme won't apply at all, regardless of the valuation.

You still need to demonstrate serviceability. The 5% deposit gets you past the deposit hurdle, but the lender will assess your income, expenses, and credit file the same way they would for any other home loan application. If your income doesn't support the loan amount, a lower deposit won't fix that.

The scheme doesn't set income caps, and there's no annual limit on the number of buyers who can access it. Those restrictions were removed when the scheme replaced the earlier First Home Guarantee in late 2025. You can use a fixed rate, variable rate, or split loan structure depending on what the participating lender offers, and you can usually access an offset account or redraw facility if the loan product includes it.

How First Home Buyer Stamp Duty Concessions Work in Western Australia

Western Australia offers a full stamp duty exemption on homes valued up to $600,000 and a concessional rate on homes valued between $600,001 and $800,000 for eligible first home buyers. The concession applies statewide, so the same thresholds apply in Lakelands as they do in any other part of the state.

The concessional rate between $600,001 and $800,000 is $16.15 for every $100 above $600,000. For a home valued at $700,000, duty would be calculated as $100,000 over the threshold, which results in duty of approximately $16,150. That's considerably lower than the standard rate, which would be close to $25,000 on the same property.

The concession applies to both new and established homes. If you're buying vacant land to build on, a separate threshold applies with no duty up to $450,000 and concessional rates up to $550,000.

You'll need to occupy the home as your principal place of residence for at least six continuous months starting within 12 months of settlement. If you don't meet that condition, the concession can be clawed back and you'll be required to pay the duty in full.

Setting a Realistic Budget Before You Start Looking

Your borrowing capacity determines what you can afford, not the other way around. Lenders calculate serviceability by assessing your income against your ongoing expenses and liabilities, then applying a buffer to the current interest rate to make sure you can still afford repayments if rates rise.

A buyer in Lakelands earning $85,000 a year with a car loan, a modest credit card limit, and average monthly expenses might be able to borrow around $450,000 to $500,000 depending on the lender's serviceability model. Add a second income of $60,000 and that capacity increases, but not by the full amount of the second income because lenders also account for combined living expenses and any joint liabilities.

Use a borrowing capacity assessment before you start attending opens. It tells you what loan amount a lender will actually approve, and that figure is usually lower than what online calculators suggest because calculators don't account for your specific expenses or credit commitments.

Once you know your borrowing capacity, subtract your deposit and add your settlement costs to arrive at the purchase price you can realistically afford. If you have $50,000 saved and can borrow $480,000, your budget sits around $530,000 once you've set aside funds for conveyancing, building inspections, and lender fees. Buyers who skip this step end up making offers they can't settle or applying for loans that get declined partway through.

When to Apply for Pre-Approval

Pre-approval should happen before you make an offer, not after. It confirms that a lender is willing to lend you a specific amount based on your current financial position, and it gives you a conditional approval that's usually valid for three to six months depending on the lender.

In Lakelands, where properties at the lower end of the market can move quickly, a pre-approval means you can make an offer with confidence and a shorter finance clause. Sellers and agents take buyers with pre-approval more seriously because they know the finance is unlikely to fall through.

Pre-approval isn't a guarantee. The lender will still need to value the property, review the contract, and confirm that nothing in your financial position has changed since the pre-approval was issued. If you take on new debt, change jobs, or miss a repayment on an existing commitment between pre-approval and formal application, the lender can withdraw the offer.

Apply for pre-approval once your genuine savings have been held for three months, your income is stable, and you've cleared any outstanding debts or defaults from your credit file. If you're planning to use the First Home Super Saver Scheme, get your determination from the ATO before you apply so the funds are available when you need them.

Call one of our team or book an appointment at a time that works for you. We'll run a full serviceability assessment, confirm which loan structures and government schemes apply to your situation, and get your pre-approval sorted before you start making offers.

Frequently Asked Questions