First Home Buyers Are Feeling The Squeeze, Here's What You Can Actually Do About It
If you've been trying to get into the property market lately, you already know, it's tough. And if you're a first home buyer, it can feel downright overwhelming.
Interest rates have gone up. Your borrowing power has come down. The deposit you've been saving feels like it's shrinking in value against rising prices. And when you finally do find something in your budget, so has everyone else.
This isn't just a feeling. It's the reality for thousands of Australians right now, and it's something we're seeing every week at KM Financial Services.
What Higher Interest Rates Are Actually Doing To Buyers
When interest rates rise, the amount a bank will lend you drops, often significantly. A rate increase that looks small on paper can reduce your borrowing capacity by tens of thousands of dollars. That's not a gap you can easily bridge.
On top of the actual interest rate, lenders generally assess whether you could still afford repayments if rates were around 3 percentage points higher. That serviceability buffer is another reason borrowing capacity can feel lower than expected.
For first home buyers, especially, this hits hard. You're not coming in with equity from a previous property. You're starting from scratch, and the goal posts keep moving.
What we're also seeing is that the more affordable end of the market, the units, townhouses, and entry-level homes that first home buyers typically target, is getting more competitive, not less. Everyone's chasing the same properties.
The Deposit Challenge Is Real
Saving a deposit is already a big ask. But when property prices remain elevated and lenders are stress-testing your loan at higher rates, it can feel like you're running just to stay in place.
Many buyers are coming to us unsure of how much they actually need, what lenders are really looking for, and whether schemes like the First Home Guarantee (which may allow eligible buyers to purchase with as little as a 5% deposit without paying Lenders Mortgage Insurance) might apply to them.
The honest answer? A lot of people are eligible for more help than they realise. But you have to know where to look.
A Difficult Market Still Has Pathways In
We've helped hundreds of first home buyers across Australia-wide navigate tougher conditions than this. The path looks different for everyone, but it exists.
The buyers who succeed right now aren't necessarily the ones with the biggest deposits. They're the ones who went in prepared, with finance sorted, expectations calibrated, and a clear plan behind them.
That's exactly what we help you build.
Ready To Make Your Move?
If you're a first-home buyer feeling stuck, or you're not sure where to start, let's have a conversation. Call us on 0402 879 531 and feel free to book a free consultation today.
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