Buying a home is one of the biggest financial decisions you’ll ever make. It’s exciting, but also a little scary—especially if you’re not sure whether you’re truly ready. While dreaming about your ideal house is fun, making sure you can afford it is essential. Understanding the real costs involved, from the average mortgage repayments to extra fees like stamp duty, can help you make an informed decision. Here are five signs you’re financially ready to buy a home in Australia.
1. You Have a Handsome Income and Job Security
Before taking on a mortgage, it’s important to have a reliable source of income. Lenders want to see that you have a steady job and the ability to make regular repayments. If you’ve been working full-time in the same job or industry for at least a year, that’s a good sign. It shows consistency and reduces the risk for banks and lenders.
A stable income also gives you peace of mind that you can cover unexpected costs that come with owning a home, like repairs or rising interest rates. Many Australians consult professionals in the real estate business or mortgage brokers to assess their income stability before applying for a loan.
2. You’ve Saved a Sizable Deposit
In Australia, most lenders require a deposit of at least 5–20% of the property’s value. Having a larger deposit helps in two ways: it reduces the total amount you need to borrow and can help you avoid lenders mortgage insurance (LMI), which adds to your costs.
Let’s say you’re eyeing a home worth $600,000. A 20% deposit means you’ll need to save $120,000. While that might seem like a lot, reaching that target shows you’re serious and financially disciplined. It also demonstrates that you’ve likely developed good saving habits, a key trait for managing average mortgage repayments down the track.
3. You Understand All the Upfront and Ongoing Costs
A lot of first-time buyers focus only on the purchase price of a property, but there are several other costs involved. One major expense is stamp duty, which is a government tax based on the value of your property. The amount can vary depending on the state or territory you live in, and whether you’re a first home buyer.
To get a clearer picture, using a stamp duty calculator is highly recommended. These tools are available online and help estimate how much you’ll need to pay based on your specific circumstances.
Other costs include:
- Legal and conveyancing fees
- Building and pest inspections
- Moving expenses
- Council rates and utility connection fees
Being aware of all these costs and factoring them into your budget shows you’re financially ready to own a home.
4. Your Debts Are Under Control
Another sign that you might be ready to buy a home is having your other debts under control. Lenders will look at your debt-to-income ratio—how much you owe compared to how much you earn. If you’re managing credit card debt, car loans, or personal loans responsibly, and not living paycheck to paycheck, it suggests that you’ll likely handle a mortgage well.
In fact, reducing or paying off existing debts can improve your borrowing power and even get you better interest rates. Many people in the real estate business advise clearing out as much debt as possible before applying for a home loan.
5. You Can Comfortably Afford Mortgage Repayments
This is the big one. Owning a home means making regular mortgage payments—often for 25 to 30 years. Knowing whether you can afford this commitment is critical. A good starting point is to check the average mortgage repayments in your area. These can vary depending on interest rates, loan terms, and property prices.
For example, in 2025, the average mortgage repayment for a $500,000 loan over 30 years at a 6% interest rate would be around $3,000 per month. If you can comfortably afford this on your current income—while still covering everyday expenses, savings, and a few luxuries—you’re in a good position to buy.
There are many mortgage calculators online to help you estimate repayments based on different loan amounts and interest rates. These tools, along with guidance from real estate or finance professionals, can help you make an informed decision.
Conclusion
Buying a home is about more than just having a dream—it’s about being financially prepared. If you have a stable income, a solid deposit, an understanding of the extra costs, manageable debt, and the ability to meet average mortgage repayments, you’re likely ready to take the next step.
