First Home Buyer Guide Australia: Every Step From Deposit to Keys

Short answer

This first home buyer guide for Australia comes down to five moves: work out a realistic budget and deposit (20% avoids LMI, but 5% is possible under the government's 5% Deposit Scheme), use the First Home Super Saver scheme and any grants or stamp duty concessions you qualify for, choose a loan structure you can live with, budget for the costs beyond the deposit, and don't buy more house than your life can carry. Everything below is the step-by-step version, with links to our detailed guides on each piece.

Key facts

Scheme rules and caps change often. The official source for the federal schemes is firsthomebuyers.gov.au, and your state revenue office (for NSW, Revenue NSW) for grants and stamp duty.

Step 1: How much can you actually afford?

Start with the repayment, not the price. Take your current rent, add what you save each month, and ask honestly whether you could sustain that as a mortgage repayment if rates rose one percentage point. That figure, run through Moneysmart's mortgage calculator, tells you the loan size you can carry, and the loan plus your deposit tells you the price range.

Then compare it against renting. Buying isn't automatically better than renting, especially in the first few years when stamp duty and buying costs eat any gains. Our comparison of renting vs buying for Australian families walks through the real numbers, and if the numbers say "not yet where you want to live", rentvesting (buying an investment property where you can afford, renting where you want to live) is a legitimate middle path.

Step 2: How much deposit do you need?

The clean answer is 20%: on a $700,000 home that's $140,000, and it avoids lenders mortgage insurance entirely. The realistic answer for most first home buyers is somewhere between 5% and 15%, using one of three routes:

Lenders mortgage insurance protects the lender, not you, and it's added to your loan or paid upfront. Whether paying it beats waiting is a genuine calculation, and our guide on whether you really need a 20% deposit works through it.

Step 3: Which government schemes can you use?

The 5% Deposit Scheme (First Home Guarantee)

Since 1 October 2025 this scheme has no income caps and no limit on places. The government guarantees up to 15% of the property value so you can borrow with a 5% deposit and skip LMI. You still need to service the full loan, and the property must sit under the price cap for its region, which rose substantially in the 2025 changes. Single parents can access the related Family Home Guarantee with just 2%.

Help to Buy (shared equity)

Help to Buy is different: the government takes an equity share of up to 30% of an existing home or 40% of a new build, you put in a 2% deposit and borrow the rest, and you buy back the government's share over time (or repay it when you sell). Income caps apply, currently $103,000 for singles and $165,000 for couples and single parents. It lowers your repayments dramatically but the government shares in any capital growth.

First Home Super Saver (FHSS)

FHSS lets you save part of your deposit inside super, where contributions are taxed at 15% instead of your marginal rate. You can put in up to $15,000 a year and release up to $50,000 plus associated earnings when you're ready to buy. For someone on a 30% or 37% marginal rate, that's several thousand dollars of extra deposit over a few years. The mechanics, and who it doesn't suit, are in our FHSS guide, and the official rules are on the ATO.

Grants and stamp duty concessions

Every state runs its own First Home Owner Grant ($10,000 to $30,000, usually new builds only) and its own stamp duty concession. In NSW, for example, first home buyers pay no stamp duty up to $800,000 and a reduced rate up to $1,000,000. The state-by-state table is in first home buyer grants and schemes in 2026.

You can often stack these: FHSS to build the deposit, the 5% Deposit Scheme to avoid LMI, and a stamp duty concession to cut the upfront cost.

Step 4: What will it cost beyond the deposit?

This is where first home buyers get caught. The deposit is the biggest number but not the only one:

Our list of the five costs first home buyers forget puts numbers on each. Then there's the ongoing bill: council rates, water, insurance, strata if it's an apartment, and maintenance that always arrives at the worst time. Together they commonly add $10,000 or more a year, which is why what owning a home really costs beyond the mortgage is required reading before you sign.

Step 5: Fixed or variable, and what's an offset account?

Once you know your budget, choose the loan structure.

Fixed locks your rate and repayment for one to five years. You get certainty, but you lose flexibility: extra repayments are usually capped, offset accounts are rarely available, and breaking the fixed term can cost thousands. Variable moves with the market, allows unlimited extra repayments and usually comes with an offset account. Many first home buyers split the loan, fixing part for certainty and keeping part variable for flexibility. The full comparison is in fixed vs variable home loans for families.

An offset account is a transaction account linked to your loan: every dollar sitting in it reduces the loan balance that interest is charged on. If your salary lands there and your emergency fund lives there, you can save tens of thousands in interest over the life of the loan without changing your spending. How it works, and when the higher fee isn't worth it, is in what is an offset account. Moneysmart's home loan guide is a good neutral reference for comparing loan features.

Should you buy off-the-plan?

Off-the-plan apartments are attractive to first home buyers because grants and stamp duty savings are often larger for new builds, and you have time to save while it's built. The risks are real: valuations can come in below the contract price at settlement, sunset clauses can let a developer walk away, and you're buying from a brochure. Our guide to buying off-the-plan in Australia covers what to check before you sign.

A worked example: Jess and Sam buy in Brisbane

Jess and Sam earn $165,000 combined and have saved $60,000. They find a $750,000 townhouse.

The 5% route costs them roughly $670 a month more in repayments and a larger loan for the same house. The 20% route costs them three and a half more years of rent and the risk that prices rise faster than their savings. Neither is "right". What made the decision for them was the budget: $4,270 a month plus $850 a month in ownership costs still left room for their emergency fund, so they went with the 5% Deposit Scheme, used FHSS for the last $15,000 of deposit, and put the rest of their savings in an offset account on day one.

What happens after you buy?

Two things. First, review your loan every two to three years. Lenders quietly widen the gap between new-customer and existing-customer rates, and switching can save thousands. Our guide to whether you should refinance your home loan shows how to tell if it's worth it. Second, your first home is rarely your forever home. When the family grows, you'll face the upgrade or renovate question, and having paid down the loan or built offset savings in the meantime makes both options easier.

The takeaway

Buying your first home in Australia is a sequence, not a leap. Know your repayment ceiling before you know your price. Use FHSS, the 5% Deposit Scheme or Help to Buy, and your state's concessions to shrink the deposit and the upfront bill. Pick a loan structure you can sleep with and put an offset account to work. Budget for the costs beyond the deposit and the $10,000 a year that ownership adds. Do that, and the house you buy will be one your life can actually afford.