Almost half of recent first home buyers regret their purchase, and nearly half exceeded their budget. This step breaks down the specific mistakes driving those outcomes — overpaying, underestimating costs, and buying under pressure — so you can spot the warning signs before they become expensive lessons.
In 2025, 45% of Australians who bought their first home in the previous 12 months said they regretted their decision . That is not a small minority making poor choices. It is nearly half the market walking away from settlement feeling they got it wrong. The most common regret — reported by 26% of buyers — was paying too much . The data shows a clear pattern: buyers who do not account for the full cost of buying end up stretched, stressed, and wishing they had done things differently.
The numbers are worse than you think
47% of first home buyers paid more than they budgeted in 2025, up from 38% in 2022 . The budget blowout is getting worse, not better.
To put that in dollar terms: 18% of first-time buyers exceeded their budget by $50,000 or more. On an initial budget of $500,000, that adds over $3,500 per year in extra loan repayments . That is $3,500 a year you did not plan for, every year, for the life of your loan.
The financial damage does not stop at the purchase. After buying, 14% of first home buyers had no savings left at all. A further 33% had less than $10,000 remaining . One unexpected repair bill, one period of illness, one rate rise — and there is no buffer.
What buyers actually regret
The Finder First Home Buyer Report 2025 breaks regret into specific categories :
Regret | % of buyers |
|---|---|
Paid too much for the property | 26% |
Did not save a large enough deposit | 11% |
Bought in the wrong area | 10% |
A separate Compare the Market survey of buyers who purchased between 2017 and 2021 found a broader set of regrets :
Regret | % of buyers |
|---|---|
Lifestyle compromises and spending cutbacks to afford repayments | 21% |
Property needed more repairs or renovations than expected | 16% |
Location not as convenient or desirable as expected | 14% |
The pattern is consistent across both studies: buyers underestimate total costs, overcommit financially, and then face years of consequences they did not anticipate.
The pressure trap
61% of buyers in the Compare the Market survey said they felt pressure to buy as soon as possible because of rising property prices . Among 25 to 34 year olds, that figure was 72% .
This pressure drives a specific behaviour: 70% of first home buyers in 2025 did not wait to save the standard 20% deposit before buying . That means paying lenders mortgage insurance, having a larger loan, higher repayments, and less equity from day one.
The confidence-knowledge gap
Here is where it gets dangerous. ME Bank tested 1,000 Australians on basic property buying knowledge. 61% of first home buyers failed the quiz — yet nearly 70% said they felt confident making financial decisions .
Specific gaps in knowledge :
- 88% did not know that lenders mortgage insurance protects the lender, not the borrower
- 85% did not know there is no cooling-off period at auction
- 78% did not know you pay the deposit on auction day
- 66% were unfamiliar with conveyancing
Where mortgage stress comes from
Nearly two in three (65%) first home buyers are already in, or expect to be in, mortgage stress — defined as spending 30% or more of gross income on mortgage repayments . Roy Morgan data from February 2026 shows 24.9% of all mortgage holders nationally are "at risk" of mortgage stress, with 17.3% classified as "extremely at risk" . That is 1.3 million Australians whose repayments consume a dangerous share of their income.
Mortgage stress does not happen overnight. It builds from the gap between what you budgeted and what you actually spend. Every cost you miss in your planning — stamp duty, conveyancing, building inspections, council rates, strata levies, maintenance — widens that gap.
The cost-of-living squeeze
The Helia 2024 Home Buyer Sentiment Report, surveying over 3,000 buyers, found that "cost of living" has overtaken "housing affordability" as the leading barrier to home ownership for the first time — 54% versus 43% . This matters because it means the squeeze is not just about the purchase price. It is about everything that comes after: groceries, utilities, insurance, transport, and the hundred other expenses that do not pause because you just bought a house.
85% of buyers said saving the traditional 20% deposit had become more difficult . And 63% were receiving financial support from family to get onto the property ladder, up from 42% the year before .
Warning signs to check against your own plan
If any of these apply to you, your budget may be heading for the same pattern:
- 1You have not listed every cost beyond the purchase price. Stamp duty, conveyancing, inspections, insurance, moving costs, and immediate repairs all come before you make your first mortgage payment.
- 2Your budget has no buffer. If one unexpected $5,000 expense would cause serious stress, you are too tight.
- 3You are feeling pressure to buy now. Urgency is how 47% of buyers end up over budget.
- 4You are confident you understand the process but have not tested that knowledge. Remember: 61% of first home buyers failed a basic property quiz while feeling confident .
- 5Your repayments would exceed 30% of your gross income. You are already in mortgage stress territory before rates move, before costs rise, before anything goes wrong.
- 6You are relying on family help without a clear agreement. 63% of buyers now receive family support , but unclear terms create risk for everyone involved.