By Catherine Mulholland, Otivo
Most first home buyers focus on one number, the deposit, as if clearing it is the whole test of affordability. It's a crucial piece, but it's only part of the picture. Affording a home means covering the deposit, borrowing what you need, handling the upfront costs, and comfortably meeting the ongoing costs of ownership. Here's the fuller picture, so the question gets an honest answer.
Whether you can afford a first home depends on more than the deposit. It comes down to your deposit, how much you can borrow, the upfront costs of buying, and whether you can comfortably meet ongoing repayments and ownership costs. As at July 2026, first home buyers can also access voluntary super contributions through the First Home Super Saver Scheme, subject to ATO rules.
What does affordability really involve?
It's four things, not one. There's the deposit you've saved, the amount a lender will let you borrow, the upfront costs of the purchase, and the ongoing cost of owning and repaying. A deposit alone doesn't answer the question, since you also need borrowing capacity to cover the rest of the price and the budget to sustain the repayments afterwards. Affordability is the point where all four line up, which is why looking at the deposit in isolation can mislead.
How much deposit do you need?
Lenders generally look for a deposit as a percentage of the property price, and a larger deposit reduces how much you borrow and the interest you pay over time. Where a deposit is below a certain threshold, lenders often require lenders mortgage insurance, an added cost that protects the lender, not you. Building a genuine savings history also matters to lenders. The deposit is the most visible hurdle, but it works alongside the other three factors rather than standing alone.
How much can you borrow?
Your borrowing capacity is what a lender will lend based on your income, expenses, existing debts and the deposit you bring. It sets the ceiling on the price you can consider, together with your deposit. Because it depends heavily on your income and commitments, two people with the same deposit can have very different borrowing capacities. Understanding roughly what you could borrow, alongside what you've saved, gives you a realistic price range rather than an aspirational one.
What upfront costs catch people out?
Beyond the deposit, buying a home carries costs that first buyers often underestimate. These can include government charges, legal and conveyancing fees, inspections, loan setup costs and moving expenses. Together they add up to a meaningful sum on top of the deposit, so budgeting for them is part of judging affordability. First home buyers may be eligible for certain government concessions depending on their state and circumstances, which can reduce some of these costs.
Can your super help, and what about ongoing costs?
The First Home Super Saver Scheme lets eligible first home buyers withdraw certain voluntary super contributions, along with associated earnings, to put towards a deposit, subject to ATO rules and limits. It's worth checking directly with the ATO. Beyond getting in, affordability also means sustaining ownership, repayments plus rates, insurance, utilities and maintenance. A home you can buy but not comfortably run isn't truly affordable, so the ongoing budget matters as much as the deposit.
Frequently asked questions
How much deposit do I need to buy a first home?
Lenders generally look for a deposit as a percentage of the price, and below a certain threshold they often require lenders mortgage insurance. A larger deposit reduces both your borrowing and the interest you pay over time.
Can I use my super to buy a first home?
The First Home Super Saver Scheme lets eligible first home buyers withdraw certain voluntary contributions and associated earnings towards a deposit, subject to ATO rules and limits. The ATO is the place to check current details.
What costs are there beyond the deposit?
Upfront costs can include government charges, legal and conveyancing fees, inspections, loan setup and moving costs, and ongoing costs include repayments, rates, insurance, utilities and maintenance. Both matter to true affordability.
Where to from here
Affording a first home is about four numbers lining up, not one. Otivo, a licensed Australian financial advice platform holding AFSL and Australian Credit Licence No. 485665, offers a debt advice module that works with your income and expenses to help you understand what you can sustainably manage. It helps you see the fuller affordability picture.
Sources
- ASIC MoneySmart — buying your first home — moneysmart.gov.au
- Australian Taxation Office — First Home Super Saver Scheme — ato.gov.au
Disclaimer
The information in this communication is current as at July 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.