First Home Buyer Guide Australia (2026) — Schemes, Grants & Tips
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Contents
Buying your first home in Australia is one of the most significant financial decisions you will make. The process involves navigating deposit requirements, government schemes, lender assessment criteria, and the conveyancing and settlement process — often simultaneously. This guide covers what first home buyers need to know in 2026.
Key Numbers for First Home Buyers (FY2025–26)
| Item | Figure |
|---|---|
| First Home Guarantee income cap — single | $125,000 |
| First Home Guarantee income cap — joint/couple | $200,000 |
| Minimum deposit with First Home Guarantee | 5% (no LMI payable) |
| FHSS maximum withdrawable amount | $50,000 |
| FHOG — QLD (new builds) | $30,000 |
| FHOG — NSW, VIC, WA, TAS, NT, SA | $10,000–$15,000 (new builds) |
| Stamp duty exemption threshold — NSW | $800,000 (full); $800,001–$1M (partial) |
| Stamp duty exemption threshold — VIC | $600,000 (full); $600,001–$750,000 (partial) |
| Typical variable mortgage rate (2026) | ~5.75–6.25% |
How Much Deposit Do You Need?
The standard deposit for a home loan in Australia is 20% of the purchase price — this avoids lenders mortgage insurance (LMI), which protects the lender (not you) if you default. On a $700,000 property, that is $140,000 plus stamp duty and other costs.
For most first home buyers, a 20% deposit is unattainable within a practical timeframe in Sydney or Melbourne. Several pathways exist for buying with less:
First Home Guarantee (FHBG): Eligible first home buyers can purchase with as little as a 5% deposit without paying LMI — the federal government guarantees the remaining 15% to the lender. Income caps ($125,000 single / $200,000 couple) and property price caps by city apply. Places are limited each financial year.
Lenders Mortgage Insurance (LMI): Buying with 10–19% deposit without the FHBG means paying LMI — typically $5,000–$25,000 depending on the loan size and LVR, which is usually capitalised into the loan.
Guarantor loans: A family member (often a parent) uses equity in their own property to guarantee part of your loan, allowing you to borrow without a deposit or with a smaller one. This puts the guarantor’s property at risk if you default — both parties should understand the implications fully.
Government Schemes in 2026
Australia has multiple overlapping first home buyer assistance schemes:
Federal schemes:
- First Home Guarantee (FHBG): 5% deposit, no LMI, for eligible first home buyers. 35,000 places per year.
- Regional First Home Buyer Guarantee: As above, but for regional areas. 10,000 places.
- Family Home Guarantee: Single parents and single legal guardians (not necessarily first home buyers) can buy with 2% deposit. 5,000 places per year.
- First Home Super Saver Scheme (FHSS): Save additional super contributions (concessional or non-concessional) and withdraw up to $50,000 for a first home deposit. Contributions are taxed at 15% inside super rather than your marginal rate.
- Help to Buy: A shared equity scheme (subject to parliamentary passage) where the government co-purchases up to 40% of a new home or 30% of an existing home.
State-based grants: Most states offer a First Home Owner Grant (FHOG) of $10,000–$30,000 for the purchase of a new or substantially renovated home. Conditions, thresholds, and amounts vary significantly by state.
Stamp duty concessions: Most states offer full or partial stamp duty exemptions for first home buyers under specified purchase price thresholds. These can save $15,000–$30,000 in upfront costs.
The Genuine Savings Requirement
Most lenders require genuine savings — money accumulated in your name over at least three months — to form part of your deposit. A lump-sum gift from a parent does not typically count as genuine savings without additional documentation and a hold period.
Lenders verify genuine savings through bank statements. This is why starting to save early and in a dedicated account — rather than receiving a family transfer immediately before applying — significantly simplifies the application.
Common First Home Buyer Mistakes
Buying at the top of borrowing capacity: Lenders will approve what they are allowed to approve — not what is comfortable for your lifestyle. The APRA serviceability buffer means your repayments are stress-tested at 3% above the actual rate, but your actual cashflow at current rates still needs to work within your real life.
Ignoring the full cost of buying: The purchase price is not the only cost. Budget for stamp duty (unless fully exempt), conveyancing ($1,500–$3,000), building and pest inspection ($500–$1,000), loan application fees, and moving costs.
Not getting pre-approval first: A conditional pre-approval (known as “approval in principle”) lets you bid at auctions and make offers with confidence. Without it, you are house-hunting without knowing your actual budget.
Skipping the building inspection: A thorough building and pest inspection ($500–$800) can reveal significant structural, moisture, or pest issues that would cost tens of thousands to remedy — or that would reduce the property’s value for resale.
Frequently Asked Questions
What is the First Home Guarantee and how do I apply? The First Home Guarantee allows eligible first home buyers to purchase with a 5% deposit without paying LMI. It is administered through Housing Australia via participating lenders. Apply through a participating bank or mortgage broker — not directly through the government. Places are limited each financial year and allocated on a first-come, first-served basis.
Can I use my super for a first home deposit in Australia? Yes, via the First Home Super Saver Scheme (FHSS). You can make voluntary super contributions (above the compulsory SG) and later withdraw up to $50,000 (plus associated earnings) for a first home deposit. The contributions must have been made after 1 July 2017 and you must not have previously owned a home in Australia.
Do first home buyers pay stamp duty in Australia? First home buyers in most states receive stamp duty exemptions or concessions under state-based thresholds. In NSW, first home buyers pay no stamp duty on properties up to $800,000 and a concessional rate on $800,001–$1,000,000. Thresholds differ significantly by state — check your state revenue office for current figures.
What credit score do I need for a first home loan? Most mainstream lenders look for a credit score of approximately 600 or above (Equifax scale). However, first home buyers with limited credit history — who have simply not had much debt before — are assessed differently to those with negative credit events. A clean but short credit history is usually fine.
Buying your first home involves complex financial and legal decisions. Speak with a licensed mortgage broker and a solicitor or conveyancer before committing. Find a broker through MoneySmart.