First Home Buyer Guide Australia 2026 | Deposits, Grants & Loans
If you’re buying your first home, I’ve been in your shoes.
Buying your first home can feel overwhelming when you are trying to understand deposits, borrowing power, government schemes, home loans, property prices and the purchase process at the same time.
This first-home-buyer guide explains the main steps involved in buying your first home in Australia, including how to prepare your finances, explore available assistance and avoid common mistakes before making an offer.
First Home Buyer Guide: Quick Answer
The main steps to buying your first home are:
- Review your income, expenses, debts and deposit.
- Estimate your borrowing power and comfortable repayments.
- Check whether you may qualify for government assistance.
- Obtain home-loan pre-approval where appropriate.
- Calculate stamp duty and other purchasing costs.
- Establish a realistic property budget.
- Search for and assess suitable properties.
- Arrange legal and property due diligence.
- Develop an offer or auction strategy.
- Obtain final finance approval and proceed to settlement.
Pre-approval can help you set an affordable buying range, but it is not final loan approval. Moneysmart says pre-approval commonly lasts between three and six months, depending on the lender.
Step 1: Review Your Financial Position
Before searching for property, review:
- Your employment and income
- Regular living expenses
- Credit-card limits
- Personal and car loans
- HECS or HELP debts
- Buy now pay later accounts
- Dependants
- Available savings
- Other assets and liabilities
Your maximum borrowing capacity is not necessarily the same as your comfortable buying budget.
Consider how repayments would affect your lifestyle if interest rates, expenses or family circumstances changed.
Step 2: Work Out Your Deposit and Buying Costs
Your deposit is only one part of the money required to buy a home.
You may also need funds for:
- Transfer duty or stamp duty
- Conveyancing or solicitor fees
- Building and pest inspections
- Strata reports
- Loan and valuation fees
- Moving costs
- Insurance
- Initial repairs or improvements
- A financial buffer after settlement
Some lenders may consider applications with a deposit of around 5%, but a smaller deposit generally results in a higher loan-to-value ratio and may increase costs or reduce the number of available lender options.
How Much Deposit Does a First Home Buyer Need?
The deposit required depends on:
- The property price
- The lender
- Your income and liabilities
- Your credit history
- The property type
- Whether lenders mortgage insurance applies
- Whether you qualify for a government scheme
- Your available funds for other purchasing costs
A larger deposit can reduce the amount borrowed and may provide access to a wider range of loan options.
However, eligible buyers may be able to purchase with a lower deposit through an Australian Government scheme.
Australian Government 5% Deposit Scheme
The Australian Government 5% Deposit Scheme was previously known as the Home Guarantee Scheme.
Eligible first-home buyers may be able to purchase an owner-occupied home with a minimum 5% deposit without paying lenders mortgage insurance. Eligible single parents or legal guardians may be able to apply with a minimum 2% deposit.
The scheme now has:
- No income caps
- Unlimited places for eligible applicants
- No waiting list
- Location-based property price caps
Applicants must still satisfy the participating lender’s credit policy and home-loan requirements. Scheme eligibility does not guarantee loan approval.
Eligible first-home-buyer applicants generally need to:
- Be an Australian citizen or permanent resident
- Be at least 18 years old
- Have a minimum 5% deposit
- Be a first-home buyer or not have owned Australian property or land during the previous 10 years
- Purchase an eligible owner-occupied home
- Buy at or below the applicable property price cap
- Obtain a qualifying loan from a participating lender
For the 5% Deposit Scheme, the current general property price cap is $1.5 million for Sydney and specified NSW regional centres, and $800,000 for other NSW areas. The cap must be checked for the exact suburb or postcode before relying on it.
Australian Government Help to Buy Scheme
Help to Buy is a shared-equity scheme under which the Australian Government may contribute part of the purchase price of an eligible new or existing home.
As at August 2026, applicants generally require:
- A minimum 2% deposit
- Australian citizenship
- Owner-occupier use
- Income within the applicable limits
- A property within the location-based price cap
- Eligibility under the scheme and lender requirements
Current income limits are $103,000 for an individual applicant and $165,000 for joint applicants or eligible single parents, based on the relevant ATO Notice of Assessment. Scheme requirements can change and should be checked before making purchasing decisions.
Because Help to Buy involves government equity in the property, obtain appropriate legal and financial advice before proceeding.
First Home Super Saver Scheme
The First Home Super Saver Scheme may allow eligible first-home buyers to release certain voluntary superannuation contributions to help fund a home deposit.
The current contribution limits used for the scheme are:
- Up to $15,000 of eligible voluntary contributions from any one financial year
- Up to $50,000 of eligible voluntary contributions across all years
The amount available for release depends on the type of contributions, associated earnings and ATO determination. Superannuation, tax and withdrawal rules should be checked before relying on this strategy.
NSW First Home Buyer Assistance
Government grants and stamp-duty arrangements differ between states and territories.
For eligible NSW buyers, the First Home Buyers Assistance Scheme currently provides:
- A transfer-duty exemption for eligible new or existing homes valued at $800,000 or less
- A concessional transfer-duty rate for eligible homes valued above $800,000 and below $1 million
- A transfer-duty exemption for eligible vacant land valued at $350,000 or less
- A concessional rate for eligible vacant land valued above $350,000 and below $450,000
NSW also currently offers a $10,000 First Home Owner Grant for qualifying newly built or substantially renovated homes. Eligibility conditions apply.
Do not assume you qualify based only on the property price. Residency, previous ownership, occupancy, applicant and property requirements may also apply.
Step 3: Check Your Borrowing Power
Borrowing power is influenced by factors such as:
- Income
- Employment type
- Living expenses
- Existing debts
- Credit-card limits
- Dependants
- Interest-rate assessment buffers
- Available deposit
- Loan term
- Lender policy
Different lenders can assess the same applicant differently.
An online calculator can provide an initial estimate, but it may not account for all lender policies, income types, debts or property-related requirements.
Check My Borrowing Power
Step 4: Prepare Your Home-Loan Documents
A lender may request documents such as:
Identification
- Passport
- Australian driver licence
- Medicare card
- Visa or residency documents where applicable
PAYG Income
- Recent payslips
- Employment details
- Bank statements showing salary credits
- Evidence of overtime, bonuses or allowances where relevant
Self-Employed Income
- Personal and business tax returns
- Notices of assessment
- Business financial statements
- BAS statements
- Business bank statements
- Accountant information
Assets and Liabilities
- Savings statements
- Credit-card limits
- Personal or car-loan statements
- Existing mortgage statements
- HECS or HELP information
- Buy now pay later commitments
- Evidence of gifted funds where applicable
Complete and accurate documents can reduce delays and help identify issues before an application is submitted.
Step 5: Consider Home-Loan Pre-Approval
Pre-approval is a lender’s preliminary indication that you may qualify to borrow up to a specified amount.
It can help you:
- Establish a realistic property range
- Understand lender conditions
- Identify missing documents
- Prepare for the property search
- Avoid focusing on homes substantially outside your budget
Pre-approval is not unconditional approval.
Final approval may depend on:
- Updated financial information
- Credit assessment
- The selected property
- Contract conditions
- A satisfactory valuation
- Lender policy at the time
- Confirmation that your circumstances have not materially changed
Avoid taking out new debts, increasing credit limits or making major employment changes without first considering how they may affect the application.
Step 6: Compare Home-Loan Options
A home loan should be compared using more than the advertised interest rate.
Consider:
- Interest rate
- Comparison rate
- Application and ongoing fees
- Fixed or variable structure
- Offset account
- Redraw facility
- Extra repayment options
- Loan term
- Repayment frequency
- Discharge or switching fees
- Lender service and policy
Moneysmart recommends comparing loans from more than one lender and considering rates, fees and features together.
As a mortgage broker, Truth Group can help compare potentially suitable options from more than 40 lenders. The final loan decision remains with the lender.
Step 7: Establish Your Property Brief
Before attending inspections, decide:
- Your maximum comfortable budget
- Preferred suburbs
- Acceptable alternative locations
- House, townhouse or apartment preference
- Required bedrooms and parking
- Transport and work requirements
- School and family needs
- Renovation tolerance
- Strata preferences
- Essential requirements
- Features that are negotiable
A clear property brief can help you avoid paying more for features you do not need or making emotional decisions during a competitive campaign.
Step 8: Search and Assess Properties
Do not rely only on listing photographs, price guides or selling-agent statements.
Depending on the property, investigate:
- Comparable sales
- Building condition
- Pest issues
- Strata records
- Easements and restrictions
- Flood or bushfire exposure
- Proposed nearby development
- Zoning and permitted use
- Contract conditions
- Owners-corporation finances
- Ongoing maintenance costs
- Likely competition
Your conveyancer or solicitor should review the contract before you make an unconditional commitment.
Building inspectors, pest inspectors, strata specialists, accountants and other professionals may also be required.
Step 9: Make an Offer or Prepare for Auction
Before making an offer, establish:
- The available comparable-sales evidence
- Your preferred opening position
- Your maximum purchasing limit
- Suitable contract conditions
- Your finance position
- Your walk-away point
At auction, contracts are generally unconditional once the property is successfully purchased.
Do not bid beyond your approved and comfortable limit because of competition or emotion.
A buyers agent may assist with property assessment, offer strategy, negotiation or auction bidding where included in the selected service.
Step 10: Obtain Final Approval and Prepare for Settlement
Once you secure a property, your lender may need to:
- Assess the signed contract
- Complete a property valuation
- Confirm your updated financial position
- Review outstanding conditions
- Issue formal or unconditional approval
- Prepare loan documents
Your conveyancer or solicitor will manage the legal transfer and settlement process.
Before settlement:
- Arrange insurance where required
- Complete the final inspection
- Confirm your required funds
- Sign loan and legal documents
- Avoid taking out new credit
- Confirm settlement arrangements
Common First Home Buyer Mistakes
Common mistakes include:
- Searching before understanding borrowing power
- Using the maximum borrowing amount as the spending target
- Forgetting stamp duty and other purchasing costs
- Relying on an online calculator as a loan approval
- Making several home-loan applications without a clear strategy
- Taking out new debts before settlement
- Focusing only on the interest rate
- Skipping building, pest or strata due diligence
- Making an unconditional offer without appropriate advice
- Bidding beyond the agreed limit
- Using all available savings and keeping no emergency buffer
- Assuming every first-home-buyer scheme applies automatically
Frequently Asked Questions
How much deposit does a first home buyer need?
The required deposit depends on the lender, property and applicant. Some eligible buyers may be able to purchase with a 5% deposit through the Australian Government 5% Deposit Scheme, while other applications may require a larger deposit.
Can I buy my first home with a 5% deposit?
Eligible first-home buyers may be able to use the Australian Government 5% Deposit Scheme with a minimum 5% deposit. Property price caps, owner-occupier requirements and lender approval criteria apply.
Do first home buyers pay stamp duty?
Stamp-duty rules differ between states and territories. Eligible NSW first-home buyers may receive an exemption or concession under the First Home Buyers Assistance Scheme, depending on the property type and value.
Is pre-approval guaranteed?
No. Pre-approval is conditional and does not guarantee final home-loan approval. The lender may reassess your circumstances and must also approve the selected property.
Should I speak to a mortgage broker before searching?
Speaking to a mortgage broker early may help you understand your estimated borrowing position, deposit requirements, buying costs and possible lender options before you focus on properties.
Can a first home buyer use a buyers agent?
Yes. A buyers agent can help define the property brief, search for suitable properties, review comparable sales, coordinate due diligence and negotiate with the selling agent. Buyers-agent fees and mortgage-broking services are separate.
Can temporary residents receive first-home-buyer assistance?
Eligibility depends on the specific scheme, state rules, visa status, lender policy and property type. Some government schemes require Australian citizenship or permanent residency. Foreign-investment approval and additional duties may also need to be considered.
Start Your First Home Buying Plan
Before attending more inspections or making an offer, understand:
- How much you may be able to borrow
- The deposit and purchasing costs required
- Whether you may qualify for first-home-buyer assistance
- Which lender options may suit your circumstances
- What property budget may be realistic
Explore First Home Buyer Loan Support or call or SMS Nick on 0426 259 327.
Reviewed by Nicholas Parpis — Australian Credit Representative 552460, Licensed Real Estate Buyers Agent LREA 20302280 and Director of Truth Group Pty Ltd.
Last reviewed August 2026. Information is general and does not consider your individual objectives or financial circumstances. Government schemes, grants, thresholds and lender requirements can change. Confirm current eligibility before making a property or finance decision.
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