In this guide, we’ll cover not only the basics of first home buyer loans but also government grants, low-deposit opportunities, and creative buying strategies like rentvesting and co-ownership. Plus, you’ll find practical tips, market updates, and pitfalls to avoid—so you can make confident decisions and save thousands in the process.
Working with a mortgage broker in Brisbane can also help you navigate the local property market, compare lenders, and find deals tailored to first-time buyers. Their expertise ensures you make informed choices and get the best possible home loan for your situation.
Understanding First Home Buyer Loans & Mortgages
Buying your first property is exciting, but it can also feel overwhelming. The good news? First home buyer loans are designed to make the process easier, more affordable, and less stressful. Whether you’re buying a city apartment or a suburban family home, understanding how these loans work is the first step to making the right choice.
What Is A First Home Buyer Loan?
A first home buyer loan is a type of mortgage tailored for people purchasing their first property. These loans often include special features or incentives to help you enter the market sooner.
Some common benefits include:
- Reduced deposit requirements — sometimes as low as 5% with the right scheme.
- Fee waivers — certain application or valuation fees may be reduced or removed.
- Access to government initiatives — such as the First Home Guarantee, which can help you avoid lenders mortgage insurance (LMI).
Government schemes can be game changers. For example, the First Home Guarantee lets eligible buyers purchase with just a 5% deposit. This can shave years off your savings timeline and potentially save thousands in LMI.
When exploring home loans for first home buyers, consider:
- Interest rate competitiveness.
- Ongoing and upfront fees.
- Flexibility for extra repayments.
- Useful features like offset accounts or redraw facilities.
Getting the right loan early can set you up for long-term financial success.
What is lenders mortgage insurance?
Lenders Mortgage Insurance (LMI) is like a safety net for the bank. If you can’t repay your loan, the bank is protected and recovers its losses. Importantly, LMI protects the lender, not you, the borrower. It’s usually required when your deposit is less than 20% of the property price.
How First Home Buyer Mortgages Work
A mortgage for a first home buyer works much like any other home loan — you borrow from a lender and repay over time with interest. But the difference lies in the support and incentives available.
You might be eligible for:
- State-based First Home Owner Grants (FHOG).
- Stamp duty concessions or exemptions.
- Lender discounts on rates or fees.
There are two main repayment types:
- Principal and interest loans — pay down the loan balance and interest together.
- Interest-only loans — pay only interest for a set time (less common for first buyers).
When comparing lenders, don’t just look at the headline rate. Review:
- Monthly and annual fees.
- Flexibility to make lump sum repayments.
- Access to redraw facilities.
- Digital tools and service quality.
A great lender won’t just give you a loan; they’ll guide you step-by-step
Types of Home Loans For First Time Buyers
There’s no single “best” option for everyone. The ideal loan depends on your budget, income stability, and long-term goals.
Some first-time buyers choose:
- Basic loans — no-frills, lower-cost products with limited features.
- Package loans — bundles that may include offset accounts, credit card discounts, or insurance offers.
The best first home buyer loans combine competitive rates with practical features. If you plan to make extra repayments or want quick access to savings, choose a loan that won’t penalise you for flexibility.
Variable Rate vs Fixed Rate Home Loans
Choosing between variable and fixed rates is one of the most important decisions.
Variable rate loans:
- Repayments can increase or decrease over time.
- Often more flexible, with features like offset accounts or redraw facilities.
- Good if you can manage repayment changes and want more control.
Fixed rate loans:
- Lock in your interest rate for one to five years.
- Protect against rate rises during the fixed term.
- Helpful if you prefer consistent repayments for budgeting.
The best home loan for first time buyers depends on your priorities — flexibility or stability. Many people choose a split loan to get both.
Split Loans and Offset Accounts
A split loan divides your mortgage into fixed and variable portions. This can give you repayment certainty on one part, while keeping the other flexible.
Benefits include:
- Stability on fixed portion during interest rate changes.
- Ability to make extra repayments on the variable portion.
An offset account works like a regular transaction account but is linked to your home loan. The money in the account reduces the interest charged on your loan.
Example:
If your loan is $400,000 and you have $20,000 in your offset, you only pay interest on $380,000. Over the life of your loan, this can save thousands.
Offset accounts are a powerful tool for first home buyers who:
- Keep a healthy account balance.
- Want easy access to funds without redrawing.
- Plan to actively reduce their interest costs.
Quick Tips For Choosing The Right First Home Buyer Loan
To make your decision easier, follow these steps:
- Check your eligibility for grants and schemes before applying.
- Compare more than just rates — fees and features matter too.
- Consider your lifestyle and goals — flexibility might be worth a slightly higher rate.
- Use online calculators to test different repayment scenarios.
- Speak to a mortgage broker who specialises in first-time buyers.
Your first home is a major milestone, and the loan you choose plays a big role in your long-term finances. By understanding how first home buyer loans work — and the features that matter most — you can confidently take the next step towards homeownership.
With the right mix of planning, comparison, and professional advice, you’ll not only get the keys to your first home but also set yourself up for financial success.
Eligibility & Benefits For First Time Buyers
Buying your first home in Australia comes with unique opportunities. If you know the eligibility rules and the benefits on offer, you can step into the market sooner and save thousands along the way.
Who Can Apply For A First Home Buyers Loan?
Loans for first home buyers are specifically for people purchasing their first property in Australia. In most cases, you:
- Must not have owned a property before, either on your own or jointly.
- Need to meet your lender’s income, credit, and servicing requirements.
- Must be buying a property that meets the lender’s location and value criteria.
A deposit is normally required. Without government support, this is usually 10–20% of the purchase price. However, schemes like the First Home Guarantee {which we will cover in detail below) may allow you to buy with just 5% — without paying lenders mortgage insurance (LMI).
You can use these loans for a range of property types:
- Detached houses.
- Apartments or units.
- Townhouses.
Lenders will also assess your financial position, including:
- Stable income.
- Regular savings habits.
- Manageable existing debts.
If you meet the criteria, a first buyer home loan can provide the extra boost needed to purchase sooner. Many lenders offer dedicated support to guide you from pre-approval to settlement.
Key Benefits Of First-Time Home Buyer Mortgages
A first time home buyer loan offers more than just finance — it’s often a package of savings and incentives.
Government benefits may include:
- First Home Owner Grant (FHOG) — a lump sum to help with purchase costs.
- Stamp duty concessions or exemptions — reducing one of the biggest upfront expenses.
- Low deposit schemes — helping you avoid LMI and enter the market faster.
Lender benefits can include:
- Competitive first home buyers interest rates.
- Flexible repayment options to suit your budget.
- Offset accounts and redraw facilities to save interest.
- Fee reductions or waivers on applications and annual packages.
Lower rates and tailored features not only reduce monthly repayments but also help you build equity faster. For many Australians, these benefits make homeownership a reality years earlier than expected.
How To Qualify For Low Deposit Home Loans For First Home Buyers
Low deposit home loans are a popular choice for first-time buyers who don’t want to wait years to save. Some options allow you to purchase with as little as a 5% deposit — sometimes even less if a guarantor is involved.
To qualify, you’ll generally need to:
- Meet government scheme income limits.
- Show you can afford repayments under a lender’s serviceability test.(Serviceability refers to your capacity to meet loan repayments based on your income, expenses, and existing financial commitments. Lenders assess this to determine how much you can borrow.)
- Provide proof of genuine savings.
- Maintain a good credit history.
Many low deposit loans are supported by government guarantees, which reduce lender risk and make approval easier. These guarantees are especially valuable in competitive property markets where prices are rising quickly.
The best loans for first time home buyers offer:
- Competitive interest rates to keep repayments manageable.
- Flexible features like extra repayment options.
- Low or no ongoing fees.
Working with an experienced mortgage broker can help match you to the right product. Brokers understand lender policies and know which banks are more flexible with first-time buyers.
Bringing It All Together
Understanding who can apply, what benefits exist, and how to qualify for low deposit options is essential. This knowledge helps you:
- Apply with confidence.
- Take full advantage of available savings.
- Choose a loan that works for both your short-term budget and long-term goals.
By combining the right loan structure, lender incentives, and government schemes, you can set yourself up for a smoother — and more affordable — journey to homeownership.
How To Compare Lenders and Mortgage Products
Finding The Best First Home Buyer Mortgages
Finding the right first home buyer mortgage is about more than spotting the lowest interest rate. Rates matter, but they’re just the starting point. The real value comes from understanding how a loan’s features, fees, and flexibility fit into your life.
Many first home buyers start by comparing rates on a bank’s website. While this is a good starting point, it can be misleading. The lowest advertised rate doesn’t always equal the cheapest loan in the long run. Hidden fees, limited features, or lack of flexibility can end up costing you more.
Here are key features worth considering:
- Offset accounts – Reduce the interest charged by linking your savings to your loan balance.
- Redraw facilities – Access extra repayments if you need them later.
- Repayment holidays – Temporarily pause repayments in certain situations, such as parental leave.
- Switching options – Move between fixed and variable rates without excessive costs.
- Extra repayments – Pay off your loan faster without penalties.
Your personal goals should guide your choice. If you’re focused on paying off your loan quickly, look for flexibility with unlimited extra repayments. If you value simplicity, you may prefer a low-fee loan with fewer features to manage.
A mortgage broker can be a game-changer here. They’ll help match you with lenders and products that align with your goals. Brokers often have access to rates and deals that aren’t advertised directly by banks. This gives you a wider pool of options to compare.
The best first home buyer mortgages combine:
- A competitive interest rate
- Features you will actually use
- Low, transparent fees
- Supportive customer service
When you evaluate multiple options instead of settling for the first offer, you increase your chances of finding a mortgage that works for you both now and in the future.
Comparing Interest Rates and Loan Features
Interest rates are important because they directly influence your repayments. Even a small difference can add up to thousands over the life of your loan. However, rates alone don’t tell the full story.
Let’s say you’re comparing two loans:
- Loan A: Low interest rate but no offset account, limited redraws, and high fees for switching products.
- Loan B: Slightly higher rate but offers full offset, unlimited redraws, and no penalties for extra repayments.
Loan B might actually save you more money if you keep a healthy balance in your offset account or make extra repayments.
When comparing loans, look for:
- Rate type – Fixed, variable, or split. Fixed rates offer stability, variable rates give flexibility, and split loans give you both.
- Offset accounts – Useful for reducing interest if you have savings.
- Redraw facilities – Helpful for accessing funds in an emergency.
- Loan portability – Transfer your loan to a new property without refinancing.
- Fee structure – Check for application, monthly, annual, and discharge fees.
- Flexibility to switch – Move between products as your needs change.
These features can have a bigger long-term impact than a slightly lower interest rate. Think about how you plan to use your loan, and choose features that will support those plans.
How To Choose The Best First Home Buyer Loan For You
The “best” first home buyer loan is different for everyone. Your budget, lifestyle, and long-term goals will shape your decision.
For example:
- If you plan to start a family in a few years, flexibility to reduce repayments temporarily might be valuable.
- If you receive irregular income or bonuses, a redraw facility or offset account could help you manage cash flow.
- If you expect to sell or upgrade within five years, look for a loan with low break costs and portability.
Here’s a step-by-step approach to choosing your loan:
- Know your budget – Factor in your deposit, borrowing capacity, and other costs like stamp duty and legal fees.
- List your must-have features – Decide which loan features will benefit you most.
- Compare interest rates and fees – Look beyond the headline rate to the comparison rate, which includes most fees.
- Think about flexibility – Choose a loan that can adapt as your circumstances change.
- Speak to a mortgage broker – Get professional guidance to find options you may not have considered.
Why Mortgage Brokers Can Save You Time and Money
Brokers work with a range of lenders, from big banks to smaller credit unions and non-bank lenders. They understand which lenders are more flexible when it comes to first home buyer loans.
Some of the benefits of using a broker include:
- Access to exclusive or negotiated rates
- Guidance on lender policies for different deposit sizes or credit histories
- Assistance with paperwork and application requirements
- Insights into turnaround times for approval
While you can apply directly to a bank, you might be limiting your options. A broker can help you see the bigger picture.
Balancing Affordability, Features, and Support
It’s tempting to chase the cheapest loan, but a low rate with poor service or rigid terms can quickly become stressful. First home buyers benefit most from a lender who is:
- Responsive and easy to communicate with
- Clear about fees and conditions
- Willing to offer flexibility when your situation changes
The right mortgage should make your life easier, not more complicated.
Quick Comparison: Interest Rate Types, Features & Fees for First Home Buyer Loans
Loan Type / Feature | Pros | Cons | Best For |
Fixed Rate | Predictable repayments, protection from rate rises | Limited extra repayments, break costs if you refinance early | Buyers wanting certainty in budgeting |
Variable Rate | Flexible features, can benefit if rates drop | Repayments may increase if rates rise | Buyers comfortable with possible rate changes |
Split Loan | Combines fixed stability and variable flexibility | More complex to manage | Buyers wanting a balance of security and flexibility |
Offset Account | Reduces interest by linking savings to your loan | May have higher fees | Buyers with steady savings balance |
Redraw Facility | Access extra repayments when needed | Withdrawal restrictions with some lenders | Buyers making extra repayments but needing access |
Loan Portability | Transfer loan to new property without refinancing | Not all lenders offer it | Buyers planning to move in a few years |
Extra Repayments | Pay off loan faster, save on interest | Sometimes capped for fixed loans | Buyers wanting to reduce debt early |
Low or No Fees | Reduces total loan cost | May come with fewer features | Buyers prioritising affordability over features |
Final Tips for Comparing Lenders and Products
- Don’t rush – Taking extra time to compare options can save you thousands.
- Review regularly – Even after settlement, check if your loan is still competitive.
- Ask questions – Whether with a bank or broker, make sure you understand the terms before signing.
- Think long-term – A loan that’s perfect today should still work for you in five years.
By carefully weighing rates, features, and lender service, you can secure a home loan that supports your journey into homeownership and gives you peace of mind.
Step-By-Step Application Process For First Home Buyer Loans
Buying your first home is exciting — but the loan application process can feel overwhelming if you don’t know what to expect. Breaking it down into clear steps will help you stay in control and reduce stress. From preparing your finances to getting the keys on settlement day, every stage plays an important role in securing the right loan.
Step 1. Preparing Your Finances Before Applying
Good financing for first home buyers starts long before you fill out an application form. Lenders want to see that you can manage a mortgage responsibly, so the stronger your financial position, the better your chances of approval.
Here’s how to get your finances ready:
- Review your income, expenses, and debts – Understand how much you can comfortably repay each month.
- Start saving for your deposit – Most lenders expect at least a 5–20% deposit, but a bigger deposit can help you secure a better deal.
- Factor in additional costs – Budget for stamp duty, legal fees, pest and building inspections, and moving expenses.
- Check your credit report – Ensure there are no errors, and pay off outstanding debts where possible.
- Reduce unnecessary spending – Lenders will review your bank statements, so cut back on discretionary expenses in the months before applying.
Understanding these options will help you choose a loan structure that works for you and potentially save thousands in upfront costs.
Step 2. Getting Pre-Approval For Your First Home Loan
Once your finances are in order, the next step is to secure pre-approval. This is essentially a conditional green light from your lender, confirming how much they’re willing to lend you based on your financial position.
Why pre-approval matters:
- It shows real estate agents and sellers you’re a serious buyer.
- It helps you narrow your property search to homes within your budget.
- It can speed up final loan approval once you’ve made an offer.
What lenders assess during pre-approval:
- Your income and employment stability
- Your current debts and liabilities
- Your credit history and repayment behaviour
- The size of your deposit and savings history
Pre-approvals usually last up to 90 days, giving you time to find the right property. If your pre-approval expires before you buy, you may need to update your financial information for the lender.
Pro tip: Avoid making big financial changes between pre-approval and settlement, such as changing jobs or taking out new loans, as this can affect your final approval.
Step 3. Researching Properties Before Making an Offer
Before making an offer, thorough property research is essential. Understanding the market ensures you make informed decisions and avoid overpaying.
How to research properties as a first home buyer
- Compare recent sales: Look at prices for similar homes in the suburb to gauge market value.
- Inspect multiple properties: Attend open homes and private inspections to understand features, condition, and potential issues.
- Consider location factors: Check schools, transport, amenities, and future development plans.
- Assess long-term potential: Consider resale value, capital growth prospects, and neighbourhood trends.
- Use online tools: Property websites and suburb reports can provide insights into pricing, demand, and demographics.
Pro tip: Keep notes on each property you inspect, including pros, cons, and estimated costs. This makes comparing options easier and helps you make a confident choice.
Step 4. Moving From Pre-Approval To Final Approval
Once you’ve found the perfect home and had your offer accepted, it’s time to move from pre-approval to final (unconditional) approval.
Your lender will:
- Conduct a property valuation – To ensure the purchase price matches the property’s market value.
- Verify your documents – This includes updated payslips, bank statements, and details of any debts.
- Review eligibility for government incentives – Such as FHOG or the First Home Guarantee.
If everything checks out, the lender will issue a formal loan offer. This document will outline your interest rate, repayment schedule, fees, and conditions.
Step 5. Understanding The Settlement Process For First Home Buyer Loans
Settlement is the final step in the home buying journey — and the moment you officially become a homeowner.
Here’s what happens during settlement:
- Your lender transfers the loan funds to the seller.
- Your conveyancer or solicitor ensures all legal documents are signed and lodged correctly.
- Title ownership of the property is transferred to your name.
Settlement periods in Australia typically range from 30 to 90 days, depending on your contract. During this time, keep in close contact with your lender, conveyancer, and real estate agent to avoid delays.
Quick Snapshot: First Home Buyer Loan Process
Step | What Happens | Why It Matters |
1. Prepare finances | Save deposit, check credit, reduce debt | Builds a strong application and better loan options |
2. Get pre-approval | Conditional lender approval | Sets budget, shows sellers you’re serious |
3. Find property | Search within budget | Avoids wasting time on homes you can’t afford |
4. Final approval | Lender valuation and checks | Confirms loan is ready to fund your purchase |
5. Settlement | Funds transferred, ownership changes | Officially makes you the homeowner |
Quick summary
The first home buyer loan process may seem complicated at first, but breaking it into clear stages makes it much more manageable. By preparing your finances early, securing pre-approval, and understanding the final steps, you’ll move through the process with confidence.
Each stage builds on the last, helping you avoid surprises and make informed decisions. With the right preparation and support — whether from a trusted mortgage broker, lender, or conveyancer — you can navigate your first home loan smoothly and step into homeownership feeling ready for the journey ahead.
Common Mistakes First Home Buyers Should Avoid
Buying your first home is an exciting milestone, but it’s also easy to make decisions that could cost you thousands — or add unnecessary stress — if you’re not careful. By understanding the most common pitfalls, you can avoid them and approach the process with confidence.
1. Overstretching Your Budget
It’s tempting to borrow as much as the bank will offer, especially if it means buying a bigger property or a home in a more desirable suburb. But overextending yourself can leave you struggling with repayments if interest rates rise or your circumstances change.
How to avoid it:
- Base your budget on what you can comfortably afford now, not the maximum amount you’re approved for.
- Factor in a buffer for interest rate increases or unexpected expenses.
- Use a mortgage calculator to test repayment scenarios before committing.
Remember — it’s better to buy a home you can live in comfortably than a dream home that becomes a financial burden.
2. Not Comparing Mortgage Loans
Not all first home buyer loans are created equal. Two lenders might offer the same interest rate, but the fees, features, and flexibility can vary greatly. If you accept the first offer you receive, you could be missing out on a more competitive deal.
How to avoid it:
- Compare at least three lenders before deciding.
- Look beyond the interest rate — consider the comparison rate, which includes most fees.
- Use a mortgage broker to access options you may not find on your own.
Even a small difference in rates or fees can save you thousands over the life of your loan.
3. Forgetting Ongoing Costs Beyond Repayments
Your mortgage is only part of the picture. Council rates, home insurance, utilities, body corporate fees, and regular maintenance can quickly add to your monthly expenses. Many first-home buyers underestimate these costs, leading to budget strain.
How to avoid it:
- Ask your real estate agent or conveyancer for estimates of council rates and strata fees before buying.
- Include these costs in your monthly budget alongside mortgage repayments.
- Keep a small emergency fund for unexpected repairs and maintenance.
4. Ignoring Government Grants and Incentives
There are several government programs designed to help first-home buyers in Australia, such as the First Home Owner Grant (FHOG), the First Home Guarantee, and various state-based stamp duty concessions. Failing to research these could mean missing out on thousands in savings.
How to avoid it:
- Check your state or territory’s revenue office website for current grants and concessions.
- Speak with your mortgage broker about eligibility and application requirements.
- Apply early, as some schemes have limited places each financial year.
5. Overlooking Loan Features and Flexibility
Focusing only on the interest rate can be a costly mistake. Features such as offset accounts, redraw facilities, and flexible repayment options can help you save on interest and pay off your loan faster.
How to avoid it:
- List the features you’re most likely to use before comparing loans.
- Weigh the value of features against any extra fees they may involve.
- Choose features that fit your lifestyle and financial habits, not just what sounds appealing.
6. Underestimating the Importance of a Good Deposit
While you can buy a home with as little as 5% deposit (or even less under some schemes), a larger deposit has significant benefits. It reduces your loan size, lowers your repayments, and can help you avoid Lenders Mortgage Insurance (LMI).
How to avoid it:
- Aim for a 20% deposit if possible, to avoid LMI and improve your bargaining position.
- Use high-interest savings accounts or term deposits to grow your savings faster.
- Take advantage of government programs that allow lower deposits without LMI.
7. Skipping Pre-Approval
Pre-approval isn’t just a formality — it’s a crucial step in the buying process. Without it, you risk falling in love with a property you can’t afford or losing out to another buyer who is already finance-ready.
How to avoid it:
- Apply for pre-approval before you start house hunting.
- Keep your finances stable during the pre-approval period — avoid large purchases or new loans.
- Use your pre-approval limit as your absolute maximum budget.
8. Choosing the Wrong Type of Loan
Fixed, variable, or split — each loan type has pros and cons. Choosing without understanding them can leave you locked into an unsuitable product.
How to avoid it:
- Fixed rate loans offer repayment certainty but limit flexibility.
- Variable rate loans provide flexibility and potential savings if rates fall, but repayments can increase.
- Split loans combine both, offering stability and flexibility.
- Speak with your broker about which option aligns with your lifestyle and financial goals.
Final Takeaway
Avoiding these common mistakes can make your first-home buying journey much smoother. Take your time, compare lenders, and consider all the costs involved — not just your mortgage repayments.
With careful planning, the right loan features, and a realistic budget, you can make confident decisions and enjoy your new home without unnecessary financial stress.
Special Schemes and Government Grants For First Home Buyers
For many first-home buyers, the biggest hurdle is saving a large enough deposit. Thankfully, the Australian Government — along with state and territory governments — offers a range of schemes and grants designed to help you get into the property market sooner.
These programs can reduce your upfront costs, help you save faster, and in some cases, remove the need for Lenders Mortgage Insurance (LMI) altogether. When combined with the right home loan, they can be a powerful tool in making homeownership more achievable.
1. First Home Guarantee (FHG)
The First Home Guarantee (FHG) is one of the most popular government initiatives for first-time buyers. It allows eligible applicants to purchase a home with just a 5% deposit and avoid paying Lenders Mortgage Insurance (LMI)—a cost that often runs into the tens of thousands of dollars.
How it works
- The government acts as a guarantor for up to 15% of the property’s value.
- Buyers only need to save a 5% genuine deposit.
- Available for both new and existing homes, provided they are within the property price caps for your location.
Eligibility (from 1 October 2025)
- You must be an Australian citizen or permanent resident.
- You cannot have previously owned property in Australia.
- No income limits apply (previous thresholds of $125,000 for singles and $200,000 for couples have been removed).
- Properties must fall under the new, higher price caps (e.g. Brisbane now capped at $1,000,000, up from $600,000).
Why it’s worth considering
The First Home Guarantee is ideal for buyers with a steady income but limited savings. By reducing the deposit hurdle and removing LMI costs, it can bring your homeownership timeline forward by years—allowing you to buy sooner and get into the market before property prices rise further.
Read more: First Home Guarantee Scheme
2. Family Home Guarantee
The Family Home Guarantee is designed to help eligible single parents or guardians enter the property market with a minimal deposit.
How it works:
- Allows you to buy a home with as little as a 2% deposit without paying lenders mortgage insurance (LMI).
- Available for both new and existing homes.
- Property price caps apply depending on location and market.
Eligibility basics:
- You must be a single parent or guardian with at least one dependent child.
- Australian citizens or permanent residents only.
- First-home buyers who meet income and property requirements.
Why it’s worth considering:
The Family Home Guarantee reduces the upfront financial burden, helping single parents access homeownership sooner. It can save you thousands in LMI and allows you to start building wealth earlier while providing stability for your family.
3. First Home Owner Grant (FHOG)
The First Home Owner Grant is a one-off, tax-free payment from your state or territory government to eligible buyers. It’s generally available when purchasing a newly built home, building your own, or buying a substantially renovated property.
How it works:
- Grant amounts vary between states and territories — from $10,000 to $30,000.
- It can be used towards your deposit or other upfront costs.
- Eligibility rules differ, so always check your state’s revenue office website.
Eligibility basics:
- You must be a first-time buyer.
- The property must meet value caps.
- You (or at least one applicant) must live in the home for a minimum period after purchase.
Why it’s worth considering:
When combined with a competitive home loan, the FHOG can reduce the deposit you need to save, making your first purchase much more achievable.
4. First Home Super Saver Scheme (FHSSS)
The First Home Super Saver Scheme allows you to use your superannuation account to save for a home deposit. Because super contributions are taxed at a lower rate than regular income, this can help you grow your savings faster.
How it works:
- You can make voluntary concessional and non-concessional contributions into your super fund.
- You can withdraw up to $15,000 per financial year and a maximum of $50,000 in total.
- The Australian Taxation Office (ATO) manages the release of funds.
Eligibility basics:
- You must be a first-home buyer.
- You cannot have owned property in Australia before (some hardship exceptions apply).
- You must live in the property you buy for at least 6 months in the first 12 months of ownership.
Why it’s worth considering:
This scheme is especially useful for disciplined savers who want to take advantage of the tax benefits while building a larger deposit in less time.
5. Regional Home Guarantee
The Regional Home Guarantee is designed to encourage buyers to consider purchasing in regional areas, where property prices are often lower than in capital cities.
How it works:
- Similar to the FHG, you can buy with as little as a 5% deposit without paying LMI.
- Available for new builds and certain off-the-plan properties in eligible regional areas.
- Property price caps vary depending on the region.
Eligibility basics:
- You must be an Australian citizen or permanent resident.
- First-home buyers, previous homeowners (who haven’t owned in the last 10 years), and permanent residents relocating to regional areas may be eligible.
Why it’s worth considering:
Regional properties can offer more space, a slower pace of life, and better affordability. When paired with the Regional Home Guarantee, you can access these benefits sooner and with lower upfront costs.
Maximising the Benefits of Schemes and Grants For First Home Buyers
Combining these schemes can significantly reduce your deposit, shorten your savings timeline, and lower your overall borrowing costs. For example:
- Pairing the First Home Guarantee with the First Home Owner Grant could allow you to buy with a small deposit and no LMI while using the grant for stamp duty or moving costs.
- Using the FHSSS to boost your deposit before applying for the Regional Home Guarantee could make a larger property in a regional area possible.
Pro tip: Always check the current property price caps, eligibility rules, and availability for each scheme — as they can change from year to year.
Final Word
Special schemes and government grants can be the difference between buying your first home now and waiting several more years.
When combined with the right lender, loan features, and advice from a knowledgeable mortgage broker, these programs can make your path into homeownership smoother, faster, and more affordable.
Alternative Strategies To Enter The Property Market
Co-Buying
Co-buying allows you to purchase a property with friends or family, pooling resources to boost your deposit and potentially access better loan terms. This can open the door to suburbs or property types that may have otherwise been out of reach.
To protect all parties, it’s essential to have a formal legal agreement in place. This should clearly outline ownership shares, repayment responsibilities, decision-making processes, and exit strategies. Done right, co-buying can fast-track your path to homeownership — but clear communication is crucial to avoid disputes.
Rentvesting
Rentvesting involves buying an investment property in an affordable area while renting in a location that suits your lifestyle. This strategy allows you to start building equity and benefit from capital growth without giving up the convenience of living near work, schools, or family.
It’s particularly popular in high-demand cities where buying in your desired suburb may be out of budget. With careful budgeting and a focus on long-term growth potential, rentvesting can accelerate your entry into the market while keeping lifestyle flexibility.
Read more: Rentvesting – go from 0 to 3 properties in 3 years
Room Rental & Granny Flats
Turning spare space into income is another effective way to manage your mortgage. Renting out a room or building a granny flat can provide extra cash flow to help cover repayments.
Before proceeding, check local council regulations and ensure you have clear agreements with tenants. This approach can make your loan more affordable and give you flexibility for future growth, renovations, or relocation.
Guarantor Loans
A guarantor loan allows a family member — often a parent — to use their property as additional security for your loan. This can reduce or even eliminate the need for a deposit, increase your borrowing capacity, and help you avoid lenders mortgage insurance (LMI).
While guarantor loans can be a powerful tool, they carry risks for the guarantor if repayments are missed. Always ensure both parties understand the obligations and have legal agreements in place before proceeding.
Case Study: Co-Buying Success For First Homebuyers
Mia and James wanted their first home in Chermside, Brisbane. They teamed up with their siblings, Sarah and Tom, to buy together.
Property Price: $900,000
Deposit:
- 20% deposit if buying alone = $180,000
- Split four ways = $45,000 each
Mortgage:
- Loan needed = $900,000 − $180,000 = $720,000
- Split four ways = $180,000 each
Monthly Repayments:
- Loan term: 30 years, interest rate: 6% [rate is indicative for mid-2025 and subject to market changes]
- Each person pays about $1,080 per month
- Total property repayment = $4,320 per month
Outcome:
- Each person only needed $45,000 upfront instead of $180,000 alone.
- Monthly repayments were much more manageable.
- They could afford a home in their preferred suburb sooner.
Tips for Co-Buying:
- Have a legal agreement about ownership and repayments.
Plan exit strategies if someone wants to sell. - Keep communication clear to avoid conflicts.
By combining creative buying strategies with professional advice, you can open more pathways to property ownership. Whether you co-buy, rentvest, generate rental income, or leverage a guarantor loan, the right planning can make entering the market faster and more achievable.
FAQs For First Time Home Buyers
Who is eligible for the first home buyers grant in Australia?
Eligibility varies by state, but generally you must be a first-time buyer and an Australian citizen or permanent resident. The property must meet new home or substantial renovation requirements. Income and property value limits may also apply.
How much deposit does a first home buyer need in Australia?
Most lenders require at least a 5–20% deposit. Smaller deposits may be possible under schemes like the First Home Guarantee. A larger deposit reduces Lenders Mortgage Insurance and loan costs.
Can I buy a house with a $10,000 deposit in Australia?
Yes, with a property around $200,000 and a First Home Guarantee, a $10,000 deposit may be enough. Smaller deposits usually require a guarantor or government scheme. Borrowing capacity and LMI will affect your options.
What is the first home loan rate in Australia?
Rates vary between lenders and depend on fixed or variable options. As of 2025, typical rates range from 6%–7% for first-time buyers and are subject to market changes. Comparison rates give a clearer picture of overall costs.
What is the first time home buyer scheme in Australia?
The first home buyer scheme in Australia is a government program helping buyers enter the market sooner. Options include the First Home Guarantee, FHOG, and FHSSS. These schemes reduce deposit requirements and LMI costs.
What is the $15000 first home buyer grant?
Some states offer a $15,000 grant for eligible first-home buyers purchasing a new property. The grant helps cover deposits, stamp duty, or other upfront costs. Eligibility rules differ by state.
How much is a downpayment on a 500k house?
A 5% deposit would be $25,000, while a 20% deposit is $100,000. Choosing a smaller deposit may require Lenders Mortgage Insurance. Your loan structure and schemes can reduce upfront costs.
Can I use my super for a house deposit in Australia?
Yes, through the First Home Super Saver Scheme (FHSSS). You can withdraw voluntary contributions and earnings to fund a deposit. This benefits first-home buyers with tax-effective savings.
Are there grants for single moms to buy a house?
Single mothers may be eligible for standard first-home grants and state-specific concessions. Grants like the First Home Guarantee reduce deposit requirements. Eligibility is based on income, residency, and property type.
How much deposit for a $500,000 house in Australia?
A 5% deposit is $25,000, while 10% is $50,000. Larger deposits lower LMI and monthly repayments. Government schemes can help reduce the required deposit.
How much deposit do I need for a 700k house in Australia?
A 5% deposit is $35,000, and a 20% deposit is $140,000. Smaller deposits may need LMI or a guarantor. Your lender will assess your borrowing capacity.
What is the 2% deposit home loan Australia?
It’s a low-deposit loan under schemes like the First Home Guarantee. You can buy a home with just 2% deposit and avoid LMI in some cases. Income and property caps apply.
How much money do I need to buy my first home in Australia?
You need a deposit (5–20%), plus stamp duty, legal fees, and moving costs. Grants and schemes can reduce upfront costs. Total funds vary depending on property price and location.
Are first time home buyer loans cheaper?
Not necessarily cheaper, but some loans offer reduced fees or discounts for first-time buyers. Government schemes can lower upfront costs. Comparing lenders ensures the best deal.
What is the income limit for the first home buyers grant in Australia?
Income limits differ by state and grant type. For many FHOG programs, the cap ranges from $125,000–$200,000 per year for singles. Couples usually have a combined limit of $200,000–$250,000.
What is the average age to buy a first house in Australia?
The average age is around 33–34 years. First-home buyers are increasingly older due to higher property prices and extended saving periods. Government schemes help younger buyers enter the market sooner.
Can I use my KiwiSaver to buy a house in Australia?
No, KiwiSaver is only applicable in New Zealand. Australian first-home buyers can use super via the FHSSS instead. Other Australian schemes may help first-home buyers save for a deposit.
Can I buy a house with $20,000 deposit in Australia?
Yes, for properties around $400,000 or less, especially using the First Home Guarantee. Smaller deposits may require a guarantor or additional schemes. Borrowing capacity and LMI affect your options.
Where To Get Help Choosing The Best First Home Buyer Loan
Our team at Hunter Galloway is here to help you buy a home in Australia. Unlike other mortgage brokers who are just one person operations, we have an entire team of experts dedicated to help make your home loan journey as simple as possible.
If you want to get started, please give us a call on 1300 088 065 or book a free assessment online to see how we can help.
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