You’ve scrimped, saved, and maybe even skipped your morning latte for a year, now you're eyeing your first home. But before you pop the champagne, there's one big question: "Can I actually afford this?" You’re not alone. Many first-home buyers underestimate the ongoing costs of homeownership and feel overwhelmed trying to make the numbers work. Here’s how to budget smarter, feel more confident, and avoid financial surprises down the track.
1. Start With a Realistic Mortgage Budget
While lender borrowing limits provide a useful benchmark, the more important question is; what can you comfortably afford? A good rule of thumb is to base your budget on monthly repayments that still leave room for living. Consider stress-testing your budget by modelling how your repayments would change if interest rates were to increase. For example, some buyers look at scenarios 2–3% higher, but the right buffer will depend on your situation. Online "afford house calculators" are a good starting point, but always cross-check them with your actual spending.
Pro tip: Lenders use benchmarks like the Household Expenditure Measure (HEMS) to cross-check your declared expenses, so it’s important to report them accurately.
2. Know the Ongoing Costs of Owning a Home
It’s not just the mortgage. You’ll also need to budget for:
- Council rates and water bills
- Building and contents insurance
- Strata fees (if buying a unit or townhouse)
- Regular maintenance — gutters, appliances, garden, you name it
These expenses can add up fast, so work them into your pre-purchase budget. This is where many first-home buyers get caught out — especially if they've only focused on saving the deposit.
3. Build a “Homeowner Buffer”
Life happens — hot water systems fail, interest rates climb, or your car decides it’s had enough. That’s why having an emergency buffer (ideally 2–3 months of expenses) is just as important as saving your deposit. It’s your financial safety net and will help you sleep better once you move in.
4. Use Tools to Get Clarity
Budgeting doesn't have to be painful. Start by tracking your last 3 months of spending. Break it into:
- Essentials (groceries, bills)
- Lifestyle (subscriptions, Uber Eats)
- Savings
Once you see where your money’s going, you’ll know where you can trim to make space for mortgage life.
Final Word: You’re Doing Better Than You Think
If this all feels a bit much; breathe. Every first-home buyer feels overwhelmed at some point. The good news? You don’t have to figure it all out on your own. You’ve already taken the most important step: thinking ahead
Ready to make budgeting easier and buying less stressful?
Download the free HVCO First Home Buyer Guide, it’s helped many Australians get clearer on their numbers, and it may be a useful tool for you as well. If you’re preparing to buy, it can be a helpful resource to support your planning.
