First Home Buyer Mistakes to Avoid in 2026

Buying your first home is exciting, but it can also be overwhelming. In 2026, with lending policies continuing to evolve and cost-of-living pressures still front of mind, many first home buyers in Bathurst and Lithgow risk making avoidable mistakes that can cost them time, money, or unnecessary stress. 

As mortgage brokers working closely with local buyers, we see the same First Home Buyer Mistakes come up time and time again. The good news? With the right preparation, most of these can be avoided. 

Below are the most common first home buyer mistakes in 2026, and how to steer clear of them. 

First Home Buyer Mistake #1: Waiting Too Long to Speak to a Broker

 

One of the biggest mistakes first home buyers make is delaying professional advice until they’ve already found a property. By that point, options can be limited. 

Speaking with a mortgage broker early helps you: 

• Understand your realistic borrowing power 

• Learn which government grants and schemes you’re eligible for 

• Identify steps to improve your position before applying 

Early guidance often means stronger loan options and fewer surprises later. 

First Home Buyer Mistake #2: Assuming You Need a 20% Deposit 

This is one of the most persistent first home buyer myths. Many buyers delay entering the market for years because they believe a 20% deposit is mandatory. 

In reality, many eligible buyers in Bathurst and Lithgow can purchase with a smaller deposit by using: 

• Government guarantee schemes 

• First Home Buyer Assistance Scheme stamp duty concessions 

• The First Home Owner Grant for new builds 

Understanding your options early can significantly shorten the time it takes to buy. 

First Home Buyer Mistake #3: Ignoring the Hidden Costs of Buying 

Focusing only on the deposit and repayments is another common First Home Buyer Mistake. Many buyers underestimate the additional costs involved in purchasing a home. 

These may include: 

• Conveyancing and legal fees 

• Building and pest inspections 

• Government registration fees 

• Loan establishment or package fees 

• Moving and setup costs 

Failing to budget for these can place pressure on your finances straight after settlement. 

First Home Buyer Mistake #4: Borrowing the Maximum Amount Offered 

Just because a lender approves you for a certain amount does not mean it’s the right amount for your lifestyle. 

Over-stretching can lead to: 

• Ongoing financial stress 

• Reduced flexibility if interest rates rise 

• Difficulty managing unexpected expenses 

A more sustainable approach is to base your budget on repayments you are comfortable with, not the maximum you are offered. 

First Home Buyer Mistake #5: Overlooking Loan Structure and Features 

Many first home buyers focus solely on the interest rate, but the structure of your loan matters just as much. 

Features such as: 

• Offset accounts 

• Redraw facilities 

• Flexible repayment options 

can make a significant difference to how quickly you build equity and how manageable your loan feels over time. Choosing the wrong structure can cost far more than a slightly higher rate. 

First Home Buyer Mistake #6: Not Reviewing Spending and Debts Before Applying 

Lenders in 2026 closely assess living expenses and existing debts. Buy now, pay later services, credit cards, and personal loans can reduce your borrowing power more than many buyers expect. 

Failing to clean up spending habits or reduce unnecessary debts before applying is a common first home buyer mistake that can limit your options or delay approval. 

First Home Buyer Mistake #7: Relying Solely on Your Bank 

Many first home buyers assume their current bank will automatically offer the best deal. In reality, banks often reserve their most competitive rates for new customers. 

A mortgage broker can: 

• Compare loans from 30+ lenders 

• Negotiate rates and fees 

• Identify lenders that suit your specific situation 

This often results in better long-term outcomes than sticking with the first option offered. 

How to Avoid These First Home Buyer Mistakes in 2026 

The most effective way to avoid costly first home buyer mistakes is preparation and guidance. 

Working with a local mortgage broker in Bathurst and Lithgow can help you: 

• Build a realistic buying plan 

• Understand your true costs 

• Access grants and concessions 

• Structure your loan for long-term success 

Buying your first home should feel exciting, not overwhelming. With the right advice and a clear strategy, you can avoid common pitfalls and step into home ownership with confidence in 2026. 

If you’re planning to buy your first home this year, a simple conversation early can make all the difference.