From maximising savings to achieve your first home purchase, to finding the best mortgage and choosing the right suburb to buy into, the list of factors to consider when purchasing your first home can seem never-ending. Here we’ll break down the two options to help you make the right decision for your budget.

Buying an old or established property

Purchasing an ‘old’ or established property refers to acquiring a property that has already been constructed, such as a detached dwelling, a townhouse, or an apartment.

Opting to buy an existing home comes with some benefits. Firstly, you can inspect the property and observe its performance at various times of the day, providing you with a clear understanding of what you will be purchasing. Additionally, if the property has been built for a few years, any potential issues should have already emerged.

Alongside these, some other benefits include:

  • Higher land value: Established homes tend to have a higher land to asset ratio. Since the value of land generally appreciates over time, and houses may depreciate, the potential for capital growth can be higher.

  • Potential: If DIY’s your thing, established homes will typically give you better bang for buck when it comes to value-adding through renos and other improvements. 

  • Established resale history: With established properties, you have access to transaction history from previous sales, to help ascertain the movement of property values over time. 

  • Established infrastructure: Think established gardens, sheds, tanks and fencing which all add value to a property, as does access to amenities and infrastructure like pools, schools, parks and shops in established suburbs.

It's important to note that homes constructed before 2006 were not mandated to comply with the National Construction Code's energy performance targets. The NCC establishes the minimum necessary requirements for new building design, construction, performance, and habitability in Australia, covering safety, health, amenity, accessibility, and sustainability.

In essence, this means older homes may not possess the modern amenities and energy-efficient features that new homes offer.

Buying an existing home may also imply that certain design aspects and fixtures may not be to your liking. You must assess whether you can renovate the property to suit your lifestyle in a cost-effective manner while increasing comfort and sustainability.

Buying a new property

The appeal of a brand new home is an enticing prospect for first home buyers, given you have put away savings for a number of years (sometimes more than a decade!) to achieve the dream of home ownership. For first home buyers a new property can take many forms - from an apartment or townhouse to a new build to house and land packages.

One of the most significant advantages of buying a new property is the potential savings on stamp duty. In many states, first home buyers can receive a full or partial exemption from stamp duty tax. This has the potential to put thousands of dollars back into your wallet which can make a significant difference to your budget when buying your first home.

While an established property may show signs of wear and tear depending on its age, generally speaking with a new property you won't have to worry about costly repairs or renovations for quite some time. An added bonus is vast majority of appliances, features, fittings and house structure will remain under warranty, with home warranty insurance lasting for 6 years and 6 months providing you piece of mind that you won't be hit with unexpected expenses.

New homes are generally more energy efficient than older properties, which can save you money on your energy bills. Modern homes are built to higher standards and are designed to be more sustainable. This can be particularly appealing for first home buyers who are conscious of their carbon footprint and want to reduce their energy usage.

In many states, first home buyers can access a range of government grants and incentives to help them purchase their first home. We will cover these grants and incentives in more detail below.

To help you see the current home loan rates available in the market, use this comparison table:

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LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
70%
 Featured Online ExclusiveUp to $4k cashback
  • Immediate cashback upon settlement
  • $2000 for loans up to $700,000
  • $4000 for loans over $700,000
5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
$2,434
Principal & Interest
Variable
$0
$250
60%
  • Find out your loan eligibility in 2 minutes or less
  • Complete your application in less than 20 minutes
  • Low fees and fast approval times
5.94% p.a.
5.95% p.a.
$2,383
Principal & Interest
Variable
$0
$0
90%
5.99% p.a.
6.14% p.a.
$2,396
Principal & Interest
Fixed
$10
$440
90%
5.99% p.a.
5.99% p.a.
$2,396
Principal & Interest
Variable
$0
$150
60%
5.99% p.a.
6.32% p.a.
$2,396
Principal & Interest
Fixed
$6
$799
80%
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
90%
4.5 STAR CUSTOMER RATINGS
  • Low rates for purchase and refinancing
  • Simple online application process
  • No fees, unlimited redraws, 0.10% offset 
6.04% p.a.
7.15% p.a.
$2,013
Interest-only
Fixed
$0
$180
90%
6.14% p.a.
6.17% p.a.
$2,434
Principal & Interest
Variable
$0
$445
60%
6.14% p.a.
6.15% p.a.
$2,434
Principal & Interest
Variable
$0
$0
80%
6.19% p.a.
6.44% p.a.
$2,447
Principal & Interest
Variable
$248
$350
80%
6.24% p.a.
6.48% p.a.
$2,460
Principal & Interest
Variable
$250
$250
80%
6.59% p.a.
6.82% p.a.
$2,552
Principal & Interest
Fixed
$8
$0
70%
6.74% p.a.
7.37% p.a.
$2,592
Principal & Interest
Fixed
$0
$160
90%
6.84% p.a.
7.16% p.a.
$2,726
Principal & Interest
Variable
$0
$0
95%
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  • Immediate cashback upon settlement
  • $2000 for loans up to $700,000
  • $4000 for loans over $700,000

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Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of .



Incentives and guarantees for purchasing old and new

Home Guarantee Scheme

Whether you are purchasing an ‘old’ established property or a new property with the paint still fresh, there are a number of Federal and State government schemes at your disposal to help fund the purchase costs associated with a new home.

The Home Guarantee Scheme consists of three guarantees that can be used for new and established properties. These include:

  • First Home Guarantee (FHBG): This scheme offers first home buyers the ability to purchase a home with a deposit as low as 5%, without the need to pay Lenders’ Mortgage Insurance (LMI).

  • Regional First Home Buyer Guarantee (RFHBG): This scheme is identical to the FHBG, with the Regional First Home Buyer Guarantee only available to Aussies who have been living in the region they wish to buy in for at least one year. 

  • Family Home Guarantee: Where the First Home Guarantee and Regional First Home Buyer Guarantee offer the ability to purchase a home with as little as 5% deposit, the Family Home Guarantee allows single parents to purchase a home with as little as 2% deposit.

First Home Owner’s Grant

Where the Home Guarantee Scheme are guarantees facilitated by the Federal government, the First Home Owner’s Grant (FHOG) is facilitated by State governments.

The FHOG is a one-off payment for eligible homebuyers and is tailored to offset the effect of Goods and Services Tax (GST) on purchasing or building a new home. The eligibility criteria and FHOG amount varies across each state or territory and location.

If you are applying for a FHOG through an accredited agent and while in the process of purchasing a home, you may choose to use the grant as part of a deposit.

Choosing old vs new

Navigating between established properties or choosing to take advantage of grants on offer and purchase brand new is a question faced by many first time home buyers. In recent times, there has been very little difference in price points between the two, given the proportion of growth in the property market and lack of building material supplies and trades outweigh one another, seemingly levelling out the playing field.

Ultimately, deciding which option to choose comes down to your personal financial position and whether you can afford to make home loan repayments on either an old or new property. The last thing you want is to stretch yourself beyond your means and struggle to make repayments having saved for a number of years to get to where you are in the first place!

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