Buying your first home is one of the biggest financial decisions you will ever make. It can feel overwhelming, from saving a deposit and understanding stamp duty, to navigating lender requirements and government grants. This guide covers everything you need to know as a first home buyer in Australia.
How Much Deposit Do You Need?
Most lenders require a minimum 5% deposit, though 20% is the benchmark to avoid Lenders Mortgage Insurance (LMI). If you have a 5 - 19% deposit, you will typically need to pay LMI, a one-off premium that protects the lender (not you) in case you default. LMI can cost anywhere from $5,000 to $30,000+ depending on your loan amount.
The main 5% Deposit Scheme is an Australian Government initiative under the Home Guarantee Scheme (HGS) which helps you to buy a home sooner that allows eligible buyers to purchase with as little as 5% deposit without paying LMI, because the government guarantees up to 15% of the loan. Ask your broker whether you qualify.
The 2% Deposit scheme, yet another initiative under the Home Guarantee Scheme (HGS) supports eligible single parents with at least one dependent child to purchase a property with as little as a 2% Deposit without having to pay Lenders Mortgage Insurance (LMI). Ask your broker whether you qualify.
Stamp Duty Concessions for First Home Buyers
When you buy a property or land in Australia you have to pay a stamp duty (also known as Transfer Duty) on your purchase. Most states offer full or partial exemptions for first home buyers, often with property value thresholds.
VICTORIA (VIC)
First Home Buyers pay no duty on properties up to $600,000 with reduced (concessional) stamp duty for homes valued between $600,001 and $750,000. The property can be a new or established home, or vacant land intended for building your first home.
NEW SOUTH WALES (NSW)
First Home Buyers will receive full exemption up to $800,000 and concessions up to $1,000,000.
Use our Stamp Duty Calculator to work out how much transfer duty you’ll need to pay or ask your Mortgage Broker.
First Home Buyer Super Saver Scheme
The First Home Super Saver Scheme is an Australian Government program administered by the Australian Taxation Office (ATO) that helps you save a deposit for your first home using your super.
You can make voluntary contributions to your super (on top of what your employer already pays), either before tax through salary sacrifice or after tax as personal contributions and take advantage of lower tax rates, all to help you buy or build your first home.
- You can contribute up to $15,000 per year and $50,000 in total
- When you're ready to buy, you can apply to withdraw your savings plus associated earnings and use them towards your first home deposit. The ATO will let you know how much you can access. You must request FHSS determination before property ownership transfers.
- Couples, friends, or siblings can each access their own FHSS savings to buy the same property.
First Home Owner Grant (FHOG)
State Government Grants are typically titled First Home Owners Grant (FHOG) yet eligibility and availability of the grant varies from state to state.
Victorian State Government offers a $10,000 First Home Owner Grant for eligible buyers purchasing a newly built home valued at up to $750,000.
Queensland State Government offers a $30,000 First Home Owner Grant for eligible buyers purchasing a newly built home valued at up to $750,000.
Government of South Australia offers a $15,000 First Home Owner Grant for eligible buyers purchasing a newly built home - No Price Cap applies.
NSW Government offers a $10,000 First Home Owners Grant for eligible Buyers purchasing;
- a newly built house, townhouse, apartment, unit or similar the purchase price must not exceed $600,000.
- If you purchase vacant land and sign a building contract with a builder then the total combined cost must not exceed $750,000 ( i.e Value of the vacant land plus the value of the comprehensive home building contract plus the cost of any building variations).
To qualify, you must:
- Be an Australian citizen or permanent resident
- New and not previously sold, occupied as a home, leased out or used for short-term accommodation (includes substantially renovated homes or homes built to replace demolished ones)
- Used as the applicant’s principal place of residence
Since the grant differs from State to State, ask your Mortgage Broker whether you qualify.
Getting Pre-Approved
Pre-approval gives you a clear borrowing limit before you start inspecting properties. Lenders assess your income, expenses, credit history, and employment to determine how much they are willing to lend. Pre-approval typically lasts 3 months and puts you in a much stronger position when making an offer at auction or private sale.
Documents you will generally need for pre-approval include:
- Last 2 payslips and most recent group certificate or tax return
- 3 months of bank statements showing savings
- Photo ID (passport or driver's licence)
- Statements for any existing debts (credit cards, car loans, HECS/HELP)
How a Mortgage Broker Can Help
A mortgage broker compares loans from 30+ lenders on your behalf - not just the four major banks. For first home buyers, this is especially valuable because:
- We know which lenders accept lower deposits and which have the best first home buyer policies
- We handle the paperwork and lender communication for you
- Our service is free - we are paid a commission by the lender, not by you
- We can apply government scheme allocations (HGS, FHOG) on your behalf
Ready to take the first step? Book a free consultation or phone us on 0451 473 343 and we will walk you through your options, borrowing power, and eligible grants, at no cost to you.