Buying your first home in Australia can feel like learning a new language — LMI, FHBAS, FHSS, LVR. This guide cuts through it. It walks you through what you actually need (a deposit, a loan, and a plan), the government help you can stack, and the order things happen in, so you can buy with your eyes open.
General information only. The figures below are indicative and change often. Always confirm the current rules with your lender, the relevant state revenue office, Housing Australia and the ATO before acting.
How much deposit do you really need?
The textbook answer is 20% of the purchase price — at that level you avoid Lenders Mortgage Insurance (LMI), the one-off premium lenders charge when you borrow with a smaller deposit. On a $700,000 home, 20% is $140,000.
The real answer for most first home buyers is smaller, because of two levers:
- The First Home Guarantee lets eligible buyers purchase with as little as a 5% deposit and no LMI — the government guarantees the gap. On that same $700,000 home, a 5% deposit is $35,000.
- LMI itself lets you buy with a 5–10% deposit by paying a premium (which can run into the tens of thousands and is usually added to the loan).
Don't forget the costs on top of the deposit: stamp duty (often reduced or nil for first home buyers — see below), conveyancing, building and pest inspections, loan fees and moving. Budget a few thousand dollars for these even when duty is waived.
Use our borrowing power calculator to see what a lender is likely to lend you, then work backwards to the deposit you need.
The three federal schemes — and how they stack
These apply Australia-wide and are designed to layer on top of each other and your state's grants.
1. First Home Guarantee (FHBG)
Buy with a 5% deposit, no LMI. You still borrow from a normal bank on the lender panel; the government simply guarantees up to 15% of the value. Property price caps and income tests apply by location.
2. First Home Super Saver (FHSS)
Save your deposit inside super, where contributions are taxed concessionally, then withdraw it to buy. You can count up to $15,000 of voluntary contributions per year, to a total of $50,000 plus earnings. You apply to the ATO for a determination before releasing the funds.
3. Help to Buy
A shared-equity scheme where the government takes an equity stake in your home, shrinking the loan you need. Places are capped and income and price limits apply.
Most first home buyers can combine several of these — for example, a 5% deposit under the First Home Guarantee, with that deposit saved via the First Home Super Saver, plus a state grant and a stamp-duty concession. Eligibility for each is assessed separately. The full breakdown, including every state's grants, lives on our First Home Buyer Hub.
Stamp duty: often the biggest saving
Stamp (transfer) duty is usually a first home buyer's largest single cost after the deposit — and it's where the concessions bite hardest. Most states fully exempt eligible first homes below a threshold and phase out a concession above it. A few examples (indicative, owner-occupier):
- NSW — full exemption up to $800,000, phasing out to $1.0m.
- VIC — full exemption up to $600,000, phasing out to $750,000.
- QLD — full concession up to $700,000, phasing out to $800,000.
Our stamp duty calculator applies the right concession for your state, price and property type, and we keep a state-by-state cheat sheet of the thresholds.
The buying process, step by step
- Work out your budget. Check borrowing power and your real deposit (including costs). Get your finances tidy — savings history matters to lenders.
- Get a home loan pre-approval. This tells you your ceiling and makes your offers credible.
- Check your scheme eligibility. Confirm First Home Guarantee places, FHSS determination, your state grant and duty concession before you commit.
- Search and inspect. Compare suburbs on price, growth and yield — our suburb profiles are a starting point.
- Do your due diligence. Building and pest inspection, strata report (for units), and a contract review by a conveyancer or solicitor.
- Make an offer or bid at auction. Private treaty offers can be conditional (e.g. on finance); auction purchases are unconditional, so finance and checks must be done first.
- Exchange and pay the deposit. Contracts are signed and exchanged; a cooling-off period may apply for private sales (not auctions).
- Finance to settlement. Your lender does a valuation and issues unconditional approval. Settlement is typically 4–6 weeks later — you pay the balance, duty is paid, and the keys are yours.
Common first-home mistakes to avoid
- Forgetting the costs beyond the deposit — duty (where it applies), legal fees, inspections and moving add up.
- Skipping inspections to win an auction — a cheap inspection can save you from an expensive structural surprise.
- Assuming you don't qualify — schemes layer, and thresholds rise over time. Check every one.
- Buying at your absolute borrowing ceiling — leave room for rate rises. Stress-test the repayment, don't just check you can afford today's rate.
Next steps
- Read the full First Home Buyer Hub for every federal and state scheme.
- Estimate your duty with the stamp duty calculator.
- See what you can borrow with the borrowing power calculator.
Buying your first home is a big step, but it's a sequence of manageable ones. Get your deposit and pre-approval sorted, stack the help you're entitled to, and do your due diligence — the rest follows.