Avoid these 5 mistakes when buying a house

Locking in a loan before you know what you can borrow

You need to understand your borrowing capacity before you start looking at property. Too many officers jump onto property portals, find something that looks about right, then scramble to work out whether they can afford it.

Consider an officer who's been renting in Brisbane and has saved $60,000 working shift allowances into their deposit. They find a unit close to headquarters and make an offer, then discover during the application that their HECS debt and car loan reduce their borrowing capacity by $90,000. The property is out of reach, the vendor has moved on, and they've spent two weeks in a deal that was never going to settle.

Getting loan pre-approval gives you a confirmed borrowing limit and strengthens your position when you make an offer. Lenders assess your income, including allowances like shift penalties and overtime if they're consistent, along with your existing debts and living expenses. The result is a figure you can rely on. Pre-approval also speeds up settlement once your offer is accepted, which matters in markets where vendors want certainty.

Paying LMI when a waiver is available

Lenders Mortgage Insurance is charged when your deposit is less than 20% of the property value. For police officers, LMI waivers are available on loans up to 90% or even 95% LVR with certain lenders.

An officer purchasing a property at the median in a regional centre with a 10% deposit would ordinarily pay several thousand dollars in LMI. With a waiver, that cost disappears. The waiver doesn't reduce your deposit requirement, but it does mean you're not paying an insurance premium on top of stamp duty, conveyancing, and every other settlement cost.

LMI waivers for police officers are not automatic. They depend on the lender, your employer, and your LVR. Some lenders extend waivers to 95% LVR for officers, others cap it at 90%. You need to know which lender to approach before you apply, not after.

Ignoring the difference between variable and fixed rates

A variable rate moves with the market. A fixed rate locks in your repayment amount for a set period, usually between one and five years. Your decision depends on whether you value flexibility or certainty, and whether you expect rate movements to work in your favour.

Variable rates allow you to make extra repayments without penalty, access offset accounts, and pay off your loan faster if your circumstances improve. Fixed rates protect you from rate rises during the fixed period, but they also lock you in. If you need to break the loan during that period, whether to sell, refinance, or increase your borrowing, you'll pay break costs. Those costs can run into the thousands depending on how rates have moved since you fixed.

A split loan gives you both. You fix part of your loan for security and keep the rest variable for flexibility. In our experience, officers on rotating rosters or those expecting promotion within a few years benefit from keeping at least part of their loan variable so they can adjust repayments as income changes.

Skipping the government schemes because you think you don't qualify

The Australian Government 5% Deposit Scheme allows eligible first home buyers to purchase with a 5% deposit without paying LMI. Housing Australia guarantees part of the loan, bringing your combined deposit and guarantee up to 20%. There are no income caps and no annual place limits.

Officers sometimes assume the scheme is only for low-income buyers or that the property price caps make it irrelevant. The caps are higher than many expect. In NSW, the cap is $1,500,000 in capital cities and regional centres. In Victoria, it's $950,000. In Queensland, $1,000,000. In Western Australia, $850,000.

Help to Buy is a separate scheme where the government takes an equity stake of up to 40% for new homes and 30% for established homes. You contribute a minimum 2% deposit and the government contributes the rest, then takes a proportional share of any capital gain or loss when you sell. Income limits apply, and the scheme cannot be combined with the 5% Deposit Scheme, but for officers who meet the threshold it can bring home ownership forward by years.

Not factoring in state-based concessions and grants

Every state and territory runs its own first home owner grant and stamp duty concession. The terms differ, sometimes significantly, and missing them costs you thousands.

In Queensland, first home buyers purchasing new homes receive a $15,000 grant and pay no stamp duty on the residential land component. In Victoria, you pay no stamp duty on properties valued up to $600,000, with a concession up to $750,000. In NSW, the exemption covers properties up to $800,000, with a concession to $1,000,000. These concessions apply to both new and established homes in most states, but some states limit grants to new builds only.

An officer purchasing an established property in Melbourne valued at $650,000 would receive a partial concession. The same officer purchasing at $590,000 would pay no duty at all. The $60,000 difference in purchase price could mean $30,000 in stamp duty saved. You need to know the thresholds before you make an offer, not after contracts are signed.

Call one of our team or book an appointment at a time that works for you. We'll run the numbers, confirm your borrowing capacity, and make sure you're not leaving money on the table.

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