First Home Buyer Guide
Buying your first home involves government schemes, deposit rules, and a process that can feel complex. This guide walks you through what's available, what lenders look for, and what to prepare.
Government support available
Australia has several federal and state government schemes to help first home buyers enter the market. Eligibility criteria, dollar amounts, and place limits change — always check the official source for current figures before applying.
First Home Guarantee
Buy with a 5% deposit and no Lenders Mortgage Insurance (LMI). The government guarantees the remaining 15% of the purchase price. Annual place limits and income caps apply — see Housing Australia for current eligibility.
First Home Owner Grant (FHOG)
A one-off cash payment for eligible buyers purchasing or building a new home. The amount varies by state and territory — check your state revenue office for current rates and property value thresholds.
Stamp duty concessions
Most states offer full or partial stamp duty exemptions for first home buyers below a certain property value. Thresholds and concession amounts vary by state and are subject to change.
First Home Super Saver Scheme (FHSS)
Save for a deposit through your super fund's concessional tax environment. The amount you can withdraw is subject to ATO limits — see ato.gov.au for current figures.
How much deposit do you need?
The minimum deposit depends on whether you qualify for a government scheme:
5% deposit — if you qualify for the First Home Guarantee (no LMI payable, but place limits apply)
10% deposit — available with most lenders, but LMI will apply (costs added to your loan)
20% deposit — no LMI required; gives you access to more lenders and better rates
Genuine savings requirement — most lenders require at least 3–5% to be held in savings for 3+ months (gifts may count differently)
Additional costs to budget for — stamp duty, legal fees, building inspection, loan application fees; allow 3–5% on top of your deposit
What does the process look like?
1. Understand your borrowing power
Use a borrowing calculator or speak to a broker to get a realistic sense of what you can borrow before you start searching.
2. Get pre-approval
A pre-approval letter gives you confidence at auction or when making an offer — and tells you exactly what you can spend.
3. Find your property
Search within your pre-approved budget. Factor in stamp duty, legal fees, and building inspection costs on top of the purchase price.
4. Make an offer or bid at auction
Once you find a property, your broker will confirm the loan against that specific property and valuation.
5. Formal approval and settlement
Full approval typically takes 3–7 business days after the contract is signed. Settlement usually occurs 30–60 days later.
Documents you'll need
Valid photo ID (passport or driver's licence)
Last 2–3 months of payslips (PAYG employees)
Last 2 years of personal tax returns and ATO Notice of Assessment
Last 3–6 months of bank statements showing savings history
Evidence of your deposit (savings account, gift letter, or equity statement)
Details of any existing debts — car loans, HECS, credit cards
If applying for a government scheme: evidence of citizenship/residency and first home buyer status
Things to watch out for
Pre-approval is not a guarantee — it is conditional on the property valuation and final lender assessment; never sign a contract without confirming your loan against that specific property
Adding new debt before settlement — taking on a car loan or new credit card after pre-approval can affect your final approval
Budget for all purchase costs — stamp duty, conveyancer fees, building and pest inspection, and loan application fees can add up to 3–5% of the purchase price
Using only one lender — banks assess your application on their own criteria; a broker compares 35+ lenders to find the one most likely to approve your situation at the best rate
Buying at the top of your pre-approved limit — leave buffer for rate rises, unexpected costs, and life changes after settlement
Grant and scheme eligibility — confirm you meet all conditions before relying on a grant or scheme in your deposit calculation; rules and amounts change
Frequently asked questions
How much deposit do I need as a first home buyer?
Minimum 5% if you qualify for the First Home Guarantee (no LMI). Otherwise most lenders require 10–20%. Below 20% deposit means LMI applies unless you're on an approved government scheme.
What is the First Home Guarantee?
A federal scheme allowing eligible buyers to purchase with a 5% deposit. The government guarantees the remaining 15%, removing the LMI requirement. Annual place limits and income caps apply — see Housing Australia for current figures.
Can I use gifted money as my deposit?
Yes, in most cases — but lenders treat gifted funds differently to genuine savings. Some lenders require a portion of the deposit to be held in savings for at least 3 months. Your broker can identify which lenders accept gifted deposits for your situation.
Do I need a pre-approval before inspecting properties?
Not strictly required, but strongly recommended. A pre-approval tells you exactly what you can spend and gives sellers and agents confidence that you're a serious buyer.
What is LMI and can I avoid it?
Lenders Mortgage Insurance protects the lender (not you) if you default. It applies when your deposit is below 20% of the purchase price. You can avoid it by having a 20%+ deposit, qualifying for the First Home Guarantee, or having a guarantor.
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General information only
This article is for general information purposes only and has been prepared without taking into account your objectives, financial situation or needs. It does not constitute credit advice, financial advice or a recommendation. You should consider whether this information is appropriate for your circumstances and obtain independent advice where necessary. K&M Solutions and Services Pty Ltd (ACN 649 305 126) is not a credit provider and does not hold an Australian Credit Licence. Enquiries may be referred to licensed credit brokers or referral partners. Credit assistance, if required, is provided by appropriately licensed credit representatives or Australian Credit Licence holders. This platform does not provide credit approval, a credit offer, financial advice, or legal advice.
This article is for general information purposes only and has been prepared without taking into account your objectives, financial situation or needs. It does not constitute credit advice, financial advice or a recommendation. You should consider whether this information is appropriate for your circumstances and obtain independent advice where necessary. K&M Solutions and Services Pty Ltd (ACN 649 305 126) is not a credit provider and does not hold an Australian Credit Licence. Enquiries may be referred to licensed credit brokers or referral partners. Credit assistance, if required, is provided by appropriately licensed credit representatives or Australian Credit Licence holders. This platform does not provide credit approval, a credit offer, financial advice, or legal advice.