You finish a late shift, open Domain on the train home and find a place that looks almost possible. Then you start doing the maths: deposit, stamp duty, borrowing power, repayments. Twenty minutes later, you have 14 tabs open and somehow know less than when you started.
For a first home buyer working in healthcare, the numbers are often more favourable than they first appear. The complication is that the useful concessions sit across government schemes, lender policies and the way individual banks assess your income.
And those rules don’t always agree with each other.
Here’s what is worth knowing before you decide what you can and can’t afford.
Prefer to watch? This video takes a deeper look at what first home buyers in healthcare should know before making their next move.
1. First decision: a home or an investment?
Before worrying about which bank has the lowest advertised rate, decide what you’re actually trying to buy.
Buying your first home to live in can give you access to government support that generally isn’t available if your first purchase is an investment.
Rentvesting takes a different approach: buy where the numbers work, rent where you actually want to live.
That can make sense if buying near work is unrealistic, or if your career could move you between hospitals over the next few years. But choosing an investment first can mean giving up valuable first home buyer concessions.
Neither option is automatically smarter.
The mistake is choosing one before running the numbers on both.
2. A 20% deposit is no longer the rule
Plenty of people still mentally calculate their first home deposit as 20% of the purchase price.
For many first home buyers, that number is no longer particularly useful.
Under the Australian Government’s 5% Deposit Scheme, eligible first home buyers can purchase with a deposit as low as 5% without paying Lenders Mortgage Insurance (LMI).
There are also no income caps or limits on the number of places under the current scheme, although property price caps still apply.
For a buyer in Sydney, the property price cap is currently $1.5 million.
That changes the maths considerably.
A $900,000 property, for example, does not necessarily mean spending years trying to accumulate a $180,000 deposit before you can have a serious conversation about buying.
There is an important distinction here: being allowed to buy with a smaller deposit doesn’t automatically mean you should use the smallest deposit possible.
Keeping cash available after settlement can sometimes be more valuable than putting every spare dollar into the purchase.
More on that shortly.
3. Stamp duty can change the upfront cost again
If you’re buying in NSW, the First Home Buyers Assistance Scheme can reduce another major upfront expense.
Eligible first home buyers can currently receive a full transfer duty exemption on properties valued up to $800,000, with concessional rates applying to properties above $800,000 and below $1 million.
That’s money that doesn’t need to disappear from your deposit on settlement day.
You may also be able to use the First Home Super Saver Scheme to build part of your deposit through voluntary super contributions and later withdraw eligible amounts for your first home.
These schemes have different eligibility rules. Don’t assume you’re eligible, but don’t rule yourself out before checking either.
4. Your payslip may be worth different amounts to different banks
This is where working in healthcare gets interesting.
Suppose your income includes:
- base salary
- regular overtime
- weekend or night shift loading
- allowances
- salary packaging
- casual or agency shifts
- income from a second employer
You know what you earn.
A bank wants to know what portion of that income it is prepared to rely on for the next 30 years.
Those are different questions.
One lender may accept a particular type of additional income readily. Another may discount it, require a longer history or exclude part of it from its assessment.
That difference can materially change your borrowing capacity without anything changing about your actual job or pay.
This is one reason we don’t think healthcare workers should start with the question, “Which bank has the cheapest rate?”
Start with: “Which lenders understand how I’m actually paid?”
The rate matters once you know which lenders can assess your position properly.
5. Your profession can affect LMI too
Lenders don’t treat every profession identically.
Some have specific lending policies for eligible medical and healthcare occupations, including the ability to waive Lenders Mortgage Insurance at higher loan-to-value ratios.
That matters because LMI can otherwise become a substantial additional cost when borrowing more than 80% of a property’s value.
The exact professions, maximum LVRs and eligibility requirements vary between lenders and can change.
So being told by one bank that you need a larger deposit doesn’t necessarily tell you what the wider lending market will allow.
It tells you what that bank’s policy will allow.
There is a difference.
6. Don’t empty your bank account just to make the deposit bigger
Imagine you’ve accumulated $120,000.
You could potentially put nearly all of it towards your purchase.
That doesn’t automatically make it the smartest structure.
You still have life after settlement.
There are moving costs, furniture, strata bills, repairs, registration, insurance and the inevitable expense nobody remembered to put into the spreadsheet.
An offset account can allow you to keep some of your savings accessible while reducing the amount of your home loan on which interest is calculated.
A redraw facility works differently. Extra repayments reduce your loan balance, while eligible additional repayments may later be available to redraw.
The distinction becomes particularly important if there’s a chance your first home could become an investment property later.
This is one of those areas where structure matters more than squeezing another 0.05% out of an advertised interest rate.
7. The Bank of Mum and Dad doesn’t necessarily need to write a cheque
Family assistance can take several forms.
One is simply giving you money towards your deposit.
Another is a guarantor arrangement, where part of the equity in a parent’s property is used as additional security for your loan.
That can allow some buyers to purchase without having accumulated the deposit they would otherwise need.
But this isn’t free money.
The guarantor is putting their own property behind part of your debt. If the loan cannot be repaid, their property may be exposed.
Parents considering this should get independent legal and financial advice before agreeing to anything.
Sometimes the less sophisticated option is also the useful one: living at home for another six or twelve months while saving aggressively can move the numbers more than another year spent searching for the perfect mortgage strategy.
8. Buying with someone else can work. Treat it like a financial agreement.
A partner isn’t the only person you can buy property with.
Some first home buyers purchase with a sibling, relative or trusted friend.
Combining incomes can increase borrowing capacity and split the upfront costs of purchasing. It can turn a property that is unrealistic individually into something achievable together.
But don’t let familiarity replace paperwork.
Before buying together, decide:
- who owns what percentage
- how the deposit is divided
- how repayments and ongoing expenses will be handled
- what happens if one person wants to sell
- what happens if someone’s financial or personal circumstances change
Get legal advice and document the arrangement properly.
The conversation may feel awkward now.
It will feel considerably more awkward when one person wants their money back.
A note for single parents
If you’re a single parent or single legal guardian with a dependent child, there is another scheme worth checking.
The Family Home Guarantee can allow eligible buyers to purchase a home with a deposit as low as 2% without paying LMI.
For someone supporting a household on one income, the difference between accumulating a 2% deposit and waiting for a traditional 20% deposit is enormous.
Eligibility still matters, as does whether the resulting loan is comfortable on your income.
A scheme can help you qualify for a mortgage. It cannot make an unaffordable mortgage affordable.
That distinction is worth keeping.
Your first home doesn’t need to solve the next 20 years
This is probably the strongest opinion we have about first home buying:
Stop asking your first property to be your forever home.
It doesn’t need the perfect kitchen, three spare bedrooms, a large backyard and a ten-minute commute to the hospital where you happen to work today.
Your career may change. Your income may change. Your relationships may change. The hospital you work at may change.
Your first property has a simpler job.
It needs to be something you can afford, something that works for your life now, and something that leaves you in a stronger financial position for whatever comes next.
Buy well. Pay down debt. Build equity. Keep your options open.
The second property can solve problems the first one couldn’t.
Before you start inspecting properties
You don’t need to understand every mortgage policy in Australia.
You do need three numbers:
How much can I realistically borrow? How much cash will I need? What will the repayments leave me with each month?
Work those out before the Saturday inspections, not after you’ve found the apartment you suddenly can’t imagine losing.
Healthcare Home Loans works specifically with people in healthcare, so we spend a disproportionate amount of time looking at the details that affect healthcare income: shift loading, overtime, allowances, multiple employers and profession-specific lender policies.
If you’d like to put actual numbers around your position, you can book a free Financial Health Check with our team.
We’ll look at where you stand now, what you may be eligible for and what would need to change if you’re not ready yet.
No obligation. Just useful numbers before you make a very expensive decision.
