First Home Buyer Loans Australia
Quick Answer
How much deposit do first home buyers need in Australia?
As little as 2% to 5% with government schemes
First home buyers in Australia can purchase with as little as a 2% to 5% deposit using government schemes like the 5% Deposit Scheme and Help to Buy. Without a scheme, most lenders require at least 5% genuine savings, and you will pay Lenders Mortgage Insurance (LMI) if your deposit is under 20%.
- Minimum deposit (with scheme) 2% to 5%
- Standard deposit (no LMI) 20%
- FHOG (varies by state) $10,000 to $30,000
- Key lender focus Savings, income, credit
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Two factors that shape your first home buyer loan
Deposit and savings position
Lenders want to see genuine savings and a clear deposit source. Government schemes can reduce the deposit you need, but your savings history still matters. A stronger savings position improves your options and can unlock better loan terms.
Deposit Strength
Income and borrowing capacity
Your borrowing capacity depends on your income, existing debts, living expenses and the lender's serviceability assessment. Most lenders stress-test at around 3% above the actual rate. A higher income or lower debt can significantly increase how much you can borrow.
ServiceabilityTypical deposit scenarios for first home buyers
These are general guide ranges only. Final requirements depend on the lender, property value, location and scheme eligibility.
-
2% deposit Help to Buy shared equity
-
5% deposit 5% Deposit Scheme (no LMI)
-
5% to 19% deposit Standard loan with LMI
-
20%+ deposit Standard loan, no LMI required
A smaller deposit gets you into the market sooner, but it means a larger loan and higher repayments. Government schemes can remove the LMI cost, but your loan-to-value ratio still affects the deal you get from lenders.
Ready to explore your first home loan options?
What lenders look for in a first home buyer loan
First home buyer loans are assessed the same way as any home loan. The lender needs to confirm you can afford the repayments and that the property is suitable security.
Genuine savings history (usually 3 to 6 months)- Stable income and clear employment history
- Manageable existing debts and living expenses
- Clean credit history with no recent defaults
- Property within lender and scheme price caps
Self-employed first home buyers may want to compare self-employed home loan options alongside standard first home buyer pathways.
Common first home purchase types
Most residential lenders will consider first home purchases where the property is standard security and meets scheme eligibility rules.
Established houses- Units and apartments
- House and land packages
- Townhouses
- Off-the-plan properties
If you are looking at building a new home, see construction loans for how progress draw loans work.
Key government schemes for first home buyers in 2026
These are the main federal and state schemes that can reduce your upfront costs. Eligibility and thresholds vary, so check the official requirements before applying.
01
5% Deposit Scheme
Buy with a 5% deposit and no LMI. The government guarantees the gap. Unlimited places and no income caps from October 2025.
02
Help to Buy
The government co-owns up to 40% (new) or 30% (existing). You may need as little as 2% deposit. Available through select lenders.
03
First Home Owner Grant
A one-off cash grant from your state government. Amounts range from $10,000 to $30,000 depending on the state and property type.
04
Stamp duty concessions
Most states offer full exemptions or reductions for eligible first home buyers. Thresholds vary by state and property value.
05
First Home Super Saver
Withdraw up to $50,000 of voluntary super contributions for your deposit. Contributions are taxed at 15% instead of your marginal rate.
06
Family guarantee option
A family member uses their property equity as additional security, potentially avoiding LMI and reducing your deposit requirement.
Common problems for first home buyers
Getting into your first home involves more moving parts than most buyers expect. Here are the issues that come up most often.
Not enough genuine savings
Lenders want to see that you have saved consistently over at least 3 months. Gifts, windfalls or lump sums without a savings trail can complicate your application.
Start a dedicated savings account early and make regular deposits, even if they are small.
Borrowing capacity is lower than expected
Lenders stress-test your repayments at a higher rate. Existing debts like car loans, HECS-HELP, credit cards and buy-now-pay-later can reduce how much you can borrow.
Pay down debts and close unused credit cards before applying for pre-approval.
Property exceeds the scheme price cap
Government schemes have property price caps that vary by location. If your target property exceeds the cap, you may lose access to the scheme and need a larger deposit or LMI.
Check the price cap for your postcode using the Housing Australia tool before making offers.
Missing out on grants by buying the wrong property type
The FHOG usually only applies to new homes or substantially renovated properties. Buying established may mean you miss the grant entirely.
Confirm which grants apply to your purchase type and state before signing a contract.
How to get your first home loan in 6 steps
Step
01
Check your borrowing capacity
Work out how much you can realistically borrow based on your income, debts and living expenses. Factor in any government scheme you plan to use.
Step
02
Confirm your scheme eligibility
Check whether you qualify for the 5% Deposit Scheme, Help to Buy, FHOG and your state's stamp duty concessions before you start looking at properties.
Step
03
Get pre-approval
A conditional pre-approval gives you a clear budget and shows sellers you are a serious buyer. It usually lasts 3 to 6 months.
Step
04
Find and secure a property
Search within your budget, get building and pest inspections, and make your offer or bid at auction. Sign the contract subject to finance if possible.
Step
05
Submit your full application
Provide all required documents, including payslips, bank statements, ID and the signed contract. The lender will order a valuation and complete their assessment.
Step
06
Settle and move in
Once unconditional approval is issued, your solicitor or conveyancer handles settlement. The loan is drawn, the seller is paid, and you get the keys.
How first home buyer loans work in Australia
A first home buyer loan is a residential home loan like any other. The difference is in the support available around it. Federal and state governments offer grants, guarantee schemes, stamp duty exemptions and super savings programs that can significantly reduce the amount of cash you need upfront.
The Australian Government 5% Deposit Scheme (formerly the First Home Guarantee) lets eligible buyers purchase with a 5% deposit and no LMI. Single parents may qualify to buy with as little as 2%. From October 2025, there are unlimited places available with no income caps and updated property price caps by location.
Help to Buy is a shared equity scheme where the government contributes up to 40% of the purchase price for a new home or 30% for an existing home. This reduces the deposit you need and the size of your mortgage. It launched in December 2025 and is available through participating lenders including Commonwealth Bank and Bank Australia.
The right loan structure depends on your deposit, income, location and the property you want to buy. A finance specialist can help you work out which schemes you qualify for and which lender suits your situation. For a full overview of what documents you need for a loan application, check our preparation checklist.
Get help with your first home loan
Buying your first home involves grants, deposit schemes, lender comparisons and a lot of paperwork. A suitable finance contact can help you understand which schemes you qualify for and find the right loan.
Property Finance Help connects first home buyers with finance professionals who understand the schemes and lending criteria for first-time purchases.
Property Finance Help is a lead generation service, not a lender, broker, or financial adviser. All information on this website is general in nature and does not take into account your personal objectives, financial situation, or needs. Consider seeking independent professional advice before making any financial decision.
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