First home buyers stumbling at the own psychological hurdles

For the first time in years, the numbers for buying a house make sense again, but first home buyers are under-estimating their own horsepower.

Many have far more borrowing capacity then they realise and have been financially ready to buy for years, but have convinced themselves otherwise, Campbell Hastie of Campbell Hastie Mortgages says.

He had one client who spent six years building up their deposit – from 10% to 20% to 30%, and finally to 35% before they felt “ready” to buy a $900,000 house.

What they should have done, he says, was buy that same house five years earlier with half the deposit and made that extra money through capital growth instead of saving it the hard way.