For plenty of first-home buyers, yes. The advice you'll hear on this usually turns into a debate about rates and price forecasts. None of that decides it for you.
You're paying rent, saving towards a deposit, and getting a different answer from everyone you ask. The real question underneath is a simpler one.
A home you'll live in isn't a bet on the market. What decides it is whether you know three things about your own position:
- What a lender would actually let you borrow
- What deposit options are open to you
- How the loan itself gets set up
People sit down with us planning to wait another year. More often than not, we work out they could buy now. What was holding them up was never the market.
Why This Isn't a Timing Question
Timing does real work when you're buying to sell, because the entry price drives the return. Somewhere you'll live for a decade is a different calculation. You'll own it through good markets and bad.
Over that kind of stretch, the loan does more work than the price. A repayment you can still afford in five years is worth more than shaving a little off today.
There's also a practical problem with waiting for the right moment. The market isn't sending one clear signal to time yourself against. Values have eased in parts of the country, while plenty of sellers still price as though nothing changed.
Nobody can resolve that disagreement for you, and you don't need them to. Your own side is the part you can pin down. It comes down to what you can borrow, and what the repayments would cost each week.
What Waiting Actually Costs You
Every year comes with a reason to hold off. The reason always sounds sensible while you're living through it. Covid was one, rate rises were another, and something will be next.
Waiting is still a decision. It just doesn't feel like one, because nothing happens on the day you make it. The cost only shows up later.
A year on, twelve months of rent has gone to someone else's mortgage. The loan you'd have been paying down never started. If values rise while you sit out, your deposit target may rise too.
Plenty of people get stuck at exactly this point. They've heard of the First Home Guarantee, or they know someone whose parents helped them buy. Knowing a scheme exists is a long way from knowing whether you qualify.
None of this means panic-buy. It means putting a number on what another year costs before you decide to spend one.
Rent Is Gone. Part of a Repayment Isn't.
First-home buyers often compare rent to a repayment at face value. The repayment looks higher, and the comparison stops there. It misses what each payment is doing with your money.
On a principal and interest loan, a repayment does two jobs at once. Part of it is interest, which is the cost of borrowing. The rest is principal, and that comes straight off what you owe.
Rent does neither of those jobs. Every dollar of it is spent the moment it leaves your account.
The build is slow to begin with, because interest is charged on the balance you owe. On a typical 30-year loan, the larger share of an early repayment goes to interest. As the balance falls, the principal share grows.
Compulsive saving is how we describe that principal part to clients. The money leaves your account whether you feel like saving that month or not.
There's no point pretending the two numbers match. On a comparable property, a repayment will usually sit above the rent. You need to be able to carry that difference.
As a rough example, take rent at $700 a week against a repayment of $1,200. You'd need to find $500 a week, or $250 each between a couple.
Your own numbers will land somewhere different. Even if values do nothing, that gap is paying down a debt. Nobody moves you on at the end of a lease, either.
The Real Blocker Is Usually the Number Nobody Has Run
"I don't earn enough to buy" is one of the first things we hear. Behind it sits a borrowing figure the person guessed at once and never revisited.
A lender starts with three things: what you earn, what you spend, and what you already owe. Debts like credit cards and car loans sit in that third category. Income is where people are routinely wrong about themselves.
Lenders don't all treat income the same way. Over time, allowances and shift loadings are where the biggest differences show up. Some count them in full, some in part, some not at all.
Your base pay is what your contract says. Assessable income is what a lender will work with, once it decides how to treat the extras. For a nurse, a paramedic or a tradie, those extras can be a large part of the total.
We regularly see assessable income land well above base pay. Yours might not, and either answer is useful to have.
"I can't afford it" and "I've never had it worked out" aren't the same sentence. The second one is the easier problem to solve.
Work out that figure before you start looking. It sets the price bracket you're shopping in. Without it, weekends disappear at open homes that were never in range.
An assessment can also come back lower than you hoped. Being told it doesn't work yet is still useful. You'll know whether it's the income, the spending or the debts that need to move.
No 20% Deposit? A Guarantor Can Change the Timeline
The deposit is where first-home buyers tend to count themselves out. Some lenders accept as little as 5%. A full 20% isn't the hard rule people assume.
Deposit and borrowing are two sides of one number. A 20% deposit means borrowing 80% of the property's value, and 80% is the line that matters.
Borrow above that line, and you'll usually pay Lenders Mortgage Insurance. It's a one-off cost that protects the lender if you can't repay. It does nothing for you or your guarantor.
A few lenders waive that cost for certain healthcare roles. Knowing which ones is part of our job rather than yours.
Guarantor loans are the other route past a deposit problem. They're also badly misunderstood. People don't know what they don't know, and this is the clearest example we see.
People hear the word and picture their parents handing over cash. A guarantee works differently to a gift. The loan is still yours, and you repay 100% of it.
Your parents pledge equity instead, meaning the share of the home they own outright. It's held as security against your loan.
Pledging it does two jobs at once. You can buy without saving the full deposit. The lender also holds more security, which can bring your borrowing under that 80% line.
Come in under it, and the LMI cost goes away. Plenty of people miss that connection entirely.
The question we put to parents is a simple one. Would you rather hand over a large sum you'll never see again? Or pledge equity you keep either way?
Guarantor deals often involve larger purchases than the rent example above. On a $1.3 million purchase:
- A 20% deposit is $260,000, before stamp duty and other costs, which vary by state
- Two strong incomes can often cover the repayments on a loan that size
- Saving $260,000 inside five years is a far harder ask than servicing it
These arrangements exist because of the gap between what a household can repay and what it can save. The barrier is usually the saving, and a guarantee works around it.
None of which makes it right for everyone. It carries real risk for the guarantor. If repayments stop and they can't cover them, the lender may sell their home to recover the debt.
Anyone going guarantor should get their own legal advice before signing. For the right family it can bring a purchase forward by years. It deserves a proper look rather than a quick dismissal.
What If Rates Move After You Buy?
You don't have to expose the whole loan to rate movements. Fixing part of your loan locks the rate on that portion for a set period. Those repayments then stay the same.
The remainder sits on a variable rate, which moves up and down with the market. You decide how the loan splits between the two. Fixing the larger share is a common approach.
Keeping a variable slice matters for a reason that isn't obvious. Fixed portions usually limit how much extra you can pay off. The variable side stays flexible and can carry an offset account.
An offset is a transaction account linked to your loan. Money sitting in it is taken off your balance before interest is worked out.
Plenty of first-home buyers end up split roughly along those lines. Certainty on the bulk of the repayment, flexibility on the rest. Setting it before you buy is far easier than changing it afterwards.
Should You Buy Now or Wait?
Buy, if the numbers work. Wait, if they don't, and spend that time fixing whichever part is holding you back.
The trouble is that people guess which of those two applies to them. They give up a year on a hunch. One conversation would have told them where they stood.
We'd rather tell someone to wait, with a reason and a plan attached. Watching someone wait by default is the worst outcome. Either answer leaves you better off than not knowing.
If you're weighing up a first home, start by finding out where you stand. Book a 15-minute call with LBK Lending, and we'll work out what you could borrow.
There's no charge and no obligation. You'll also know what deposit routes are open to you, and what the repayments would cost each week.
Frequently Asked Questions
Is now a good time to buy your first home in Australia?
For many first-home buyers, yes, provided the numbers work. Somewhere you plan to stay for years isn't a market bet. Your borrowing and deposit position matters more than the month you buy.
Should I buy now or wait for prices to drop?
Waiting carries a cost that's easy to overlook. Rent paid during that year buys you nothing, and the price you're saving towards can move. Nobody can reliably call which way prices go.
Can I buy a home without a 20% deposit using a guarantor?
Often, yes, depending on the lender and the guarantor's position. A guarantor pledges equity in their own property as security against your loan. You still repay the full amount, and the guarantor should get legal advice first.
How do I find out what I can actually borrow?
Pull together your recent payslips and a realistic picture of your monthly spending. Lenders assess both. A broker can then tell you how different lenders would read your income.
What if interest rates move after I buy?
Splitting the loan is the usual answer. Fixing one portion holds its rate for a set period. A variable portion with an offset keeps some flexibility, and the right split depends on your circumstances.
About the author: Lachlan McKean is the mortgage broker behind LBK Lending, based in Brisbane and working with clients across Australia. LBK Lending holds a 5-star rating from more than 250 Google reviews. He specialises in first-home buyer and guarantor lending, plus investor and trust structures. He works with lenders that count overtime, allowances and shift loadings. He owns his own home and invests in property himself.
General information only. This article doesn't take into account your personal objectives, financial situation or needs, and isn't tax advice. Consider your own circumstances and seek advice specific to your situation before making a decision. LBK Lending. Credit Representative 527175 authorised under Australian Credit Licence 389328. Subject to lender terms, conditions and eligibility.
