Step 1: Save a deposit
Lenders usually want a 20% deposit. With less, you normally pay lenders mortgage insurance (LMI), a one-off cost that can run to tens of thousands of dollars and protects the lender, not you. The government schemes below let you skip it.
The 5% Deposit Scheme
The government guarantees part of your loan, so you can buy with a 5% deposit and no LMI. Since 1 October 2025 there are no income caps and no limit on places.
- You must be an Australian citizen or permanent resident aged 18 or over, and live in the home.
- It’s for first home buyers, or people who haven’t owned property in Australia in the past 10 years.
- Single parents and guardians can buy with a 2% deposit through the Family Home Guarantee.
The home’s price must be under a cap for its area:
| State or territory | Capitals and large regional centres | Rest of the state |
|---|---|---|
| NSW | $1,500,000 | $800,000 |
| Victoria | $950,000 | $650,000 |
| Queensland | $1,000,000 | $700,000 |
| Western Australia | $850,000 | $600,000 |
| South Australia | $900,000 | $500,000 |
| Tasmania | $700,000 | $550,000 |
| ACT | $1,000,000 | $1,000,000 |
| Northern Territory | See firsthomebuyers.gov.au | $600,000 |
Large regional centres include Newcastle, Geelong and the Gold Coast: the full list is on firsthomebuyers.gov.au.
The First Home Super Saver scheme
You can save for your deposit inside super, where it’s taxed less:
- Make voluntary contributions to your super, by salary sacrifice or personal contributions. Up to $15,000 a year counts, and $50,000 in total.
- Before-tax contributions are taxed at 15% going in, usually less than your marginal rate.
- When you’re ready to buy, ask the ATO to release them: 85% of before-tax contributions and all of after-tax ones, plus deemed earnings at a rate the ATO sets each quarter.
- Released money is taxed at your marginal rate minus a 30% offset.
A couple buying together can each use it. Check the ATO’s timing rules before you sign a contract. Salary sacrificing into super explains how to start.
Step 2: Check grants and stamp duty
The First Home Owner Grant is for new homes (or building one):
| State or territory | Grant | The home must be worth |
|---|---|---|
| NSW | $10,000 | Up to $600,000 ($750,000 for land and a build contract) |
| Victoria | $10,000 | Up to $750,000 |
| Queensland | $30,000 | Under $750,000 |
| Western Australia | $10,000 | Up to $800,000 south of the 26th parallel, $1 million north |
| South Australia | $15,000 | No cap |
| Tasmania | $20,000 | No cap |
| ACT | None | The Home Buyer Concession Scheme cuts stamp duty instead |
| Northern Territory | Up to $50,000 (HomeGrown Territory Grant) | No cap |
Western Australia’s cap rose from $750,000 for contracts signed from 7 May 2026.
Stamp duty is often the biggest cost after the deposit, but most states cut it or remove it for first home buyers. See first home buyer stamp duty by state, or work it out with the stamp duty calculator.
Step 3: Consider Help to Buy
With Help to Buy, the government pays part of the price in return for the same share of the home:
- Up to 40% of a new home, or 30% of an existing one. You need a deposit of at least 2%, with no LMI.
- Your income must be up to $100,000, or $160,000 for couples and single parents.
- You borrow less, so your repayments are lower, and you pay no rent on the government’s share.
- You can buy more of the home over time. When you sell, the government gets its share of the sale price.
There are 10,000 places a year, and price caps by area. Apply through a participating lender.
How the options compare
On the same home, the schemes cut the deposit you need, but change how much you borrow:
- A 20% deposit $3,430 a month
- Deposit $140,000 Loan $560,000
- 5% Deposit Scheme $4,073 a month
- Deposit $35,000 Loan $665,000
- Help to Buy, existing home $2,915 a month
- Deposit $14,000 Government $210,000 Loan $476,000
The schemes have price caps by area, and Help to Buy has income limits. With Help to Buy, the government gets its share of the sale price when you sell. Stamp duty and buying costs are extra.
The 5% Deposit Scheme gets you in sooner, with a bigger loan and higher repayments. Help to Buy needs the smallest deposit and gives the lowest repayments, but you only own part of the home until you buy the government out.
Step 4: Work out how much you can borrow
Lenders check you could still afford your repayments if rates rose 3 percentage points, and APRA limits how many loans banks make at 6 or more times the borrower’s income. They also look at your spending, debts and credit cards, even unused card limits.
The borrowing power calculator works it out with your income and living costs.
Step 5: Budget for the costs
| Cost | What to expect |
|---|---|
| Stamp duty | Often nothing or reduced for first home buyers |
| Transfer and mortgage registration fees | A few hundred dollars, set by your state |
| Conveyancer or solicitor | Usually $1,000 or more |
| Building and pest inspection | Several hundred dollars |
| LMI | Only with less than 20% and no government scheme |
| Moving and furnishing | Varies |
Step 6: The buying process
- Get pre-approval so you know your budget.
- Inspect homes and get a building and pest inspection on the one you want.
- Make an offer, or bid at auction. At auction there’s no cooling-off period, so arrange finance and inspections first.
- Exchange contracts and pay the deposit. Private sales in most states have a short cooling-off period.
- Settlement, usually 30 to 90 days later: your loan is paid out and you get the keys.
Not sure buying beats renting where you live? Try the rent vs buy calculator.