What are the Steps to Buy Your First House as a Tutor?

Buying your first house as a tutor means understanding how lenders assess irregular income and which deposit schemes reduce upfront costs.

Most tutors earn through a combination of employment and self-employment income. That mix changes how lenders calculate what you can borrow. If you're paid as a casual employee by a tutoring company, lenders typically average your income over the last two years of tax returns. If you run your own tutoring business or invoice clients directly, you'll need at least one full year of financials, sometimes two, depending on the lender.

The practical difference matters when you're building deposit savings while income varies term to term. Knowing how your income structure affects borrowing capacity lets you time your application when your assessed income is strongest, not just when your savings hit a target number.

How Much Deposit Do You Actually Need?

You can purchase a house with as little as a 5% deposit if you qualify for the First Home Guarantee. This federal scheme allows eligible first home buyers to avoid paying Lenders Mortgage Insurance (LMI) even with a deposit below 20%. The scheme expanded significantly in October last year, removing income caps and place limits that previously restricted access.

Without the guarantee, a 10% deposit is the next threshold. You'll pay LMI on anything under 20%, but some lenders offer reduced LMI rates for certain occupations. As a tutor, you won't typically qualify for the LMI waivers available to teachers employed by education departments, but the federal guarantee covers the gap.

Your deposit can include genuine savings, the First Home Super Saver Scheme withdrawal (up to $50,000 of voluntary super contributions), and in some cases a gifted deposit from immediate family. Lenders want to see at least 5% of the deposit held in your account for three months to demonstrate saving discipline.

Which State Grants Apply When Buying a House?

Grants and stamp duty concessions vary by state, and most apply only to new homes or house and land packages. If you're buying an established house, your main benefit is stamp duty relief rather than cash grants.

In New South Wales, eligible first home buyers receive a stamp duty exemption on properties valued under $800,000. Victoria offers no stamp duty up to $600,000 and reduced duty up to $750,000 for established homes. Queensland provides a full stamp duty concession on established homes under $700,000, with no duty payable.

If you're building or buying new, the grants become relevant. Queensland offers up to $30,000 towards buying or building a new home valued under $750,000, though this grant runs until 30 June 2026. The Northern Territory's HomeGrown Territory Grant is $50,000 for new homes, the largest in Australia, and unusually has no house price cap. Most other states offer $10,000 to $15,000 for new builds within specific price thresholds.

You can stack state grants with the First Home Guarantee for maximum effect. The grants reduce how much you need to borrow, and the guarantee removes LMI, cutting your upfront costs on both ends.

Fixed or Variable: What Works for Tutors?

Tutors with variable income often benefit from the flexibility of a variable rate loan with an offset account. Your income fluctuates across school terms, university semesters, and exam periods. An offset account lets you park higher-income months against the loan balance, reducing the interest charged, while keeping full access to the funds during quieter periods.

A split loan structure offers another option. You might fix 50% to 70% of the loan for budget certainty on your minimum repayments, and keep the remainder variable with offset access. This approach suits tutors who want a baseline payment locked in but need liquidity for uneven cash flow.

Fully fixing your rate removes flexibility. You'll face restrictions on extra repayments and no offset benefit. If your income drops and you need to reduce payments temporarily, most fixed loans don't allow that without breaking the loan and paying exit costs.

How Pre-Approval Shapes Your Purchase Timeline

Getting pre-approval before you start looking at properties tells you what you can borrow and signals to agents and vendors that you're a serious buyer. For tutors, pre-approval also identifies any income documentation issues early, giving you time to gather financials or adjust your application strategy.

Pre-approval lasts three to six months depending on the lender. If your income structure is complicated, work with a broker who understands how to present tutor income in the format lenders expect. A well-structured application that positions your income correctly can mean the difference between conditional approval and a declined application.

In an example where a tutor earns $45,000 as a casual employee and another $30,000 through private clients, one lender might assess only the employment income until two years of ABN income is available. Another lender might accept one year of self-employment income if it shows consistent growth. Pre-approval through the right lender expands what you can borrow without waiting another year.

What Happens After You Find a House?

Once your offer is accepted, you move from pre-approval to formal approval. The lender orders a property valuation to confirm the house is worth what you're paying. If the valuation comes in under the purchase price, you'll need to cover the shortfall with additional deposit or renegotiate the price.

You'll also finalise your loan structure during this stage: deciding on fixed or variable rates, offset accounts, and any split arrangements. If you're accessing the First Home Guarantee, your broker or lender submits your application to the scheme and waits for a place allocation. The guarantee has no cap on places anymore, but the approval still needs to be processed before settlement.

Settlement happens four to eight weeks after your offer is accepted, depending on what's negotiated in the contract. Your conveyancer or solicitor handles the legal side, your lender transfers the funds, and you receive the keys. Stamp duty, conveyancing fees, and any lender establishment fees are paid at settlement.

Call one of our team or book an appointment at a time that works for you. We'll assess your income structure, identify which lenders suit tutors with your specific earnings profile, and make sure you're claiming every state concession and federal scheme available to you.

Frequently Asked Questions