Buying a first home in Australia feels like a big leap, but breaking it into clear stages makes the whole thing far less daunting. The path runs from saving a deposit through to settlement, and there are government programs along the way that can genuinely reduce how much cash you need upfront.
Here’s what the journey looks like, set out in plain terms.
Know your deposit target early
Your deposit is usually the biggest hurdle. The size you need depends on the property price, how much you can borrow, and the buying costs (such as stamp duty and legal fees). A simple way to think about it:
- Start with the price of the home you want.
- Add the buying costs.
- Subtract the amount a lender is willing to lend you.
- The remainder is your savings goal.
A larger deposit reduces your loan-to-value ratio (LVR) and helps you avoid lenders mortgage insurance (LMI), but saving one can take years. Some lenders accept a deposit as low as 5%, though a low deposit often comes with extra costs – unless a government guarantee steps in.
Government schemes that lower the deposit barrier
Several national schemes are available for eligible first-home buyers.
Australian Government 5% Deposit Scheme
Previously called the Home Guarantee Scheme, this allows first-home buyers to buy with a 5% deposit, and single parents or legal guardians with as little as 2%. You don’t pay LMI, because the government guarantees part of your loan. There are no income caps or waitlists, and you apply through a participating lender – not directly to Housing Australia. Once you’re pre-approved, you usually have 90 days to find a property and sign a contract. You must live in the property as an owner-occupier to keep the guarantee.
First Home Owner Grant
A one-off payment available in every state and territory, though amounts and rules differ. It can help with the purchase or reduce stamp duty. You’ll need to check the specifics for your location.
Help to Buy Scheme
A shared-equity scheme where the government contributes up to 30% of the price for an existing home, or up to 40% for a new one. You need at least a 2% deposit and a loan from a participating lender. There are 10,000 places each year, and it’s open to first-home buyers and those re-entering home ownership.
First Home Super Saver Scheme (FHSSS)
This lets you save for a deposit inside your super account. You can withdraw up to $15,000 of voluntary contributions per financial year, and $50,000 in total across all years. Because super is taxed at a lower rate, your savings can grow faster than in a standard bank account.
What lenders assess beyond your deposit
When you apply for a loan, lenders look at more than just your deposit balance. They’ll check:
- Your savings history – regular, consistent deposits strengthen your application.
- Your credit report – a clean record improves your chances.
- Income and living expenses – they compare these against the loan repayments.
- Employment stability – steady work reassures them you can keep paying.
- Whether a guarantor is involved – this can help but comes with risks for the guarantor.
Costs you’ll need to cover
Outside the deposit itself, you’ll typically face stamp duty, conveyancing and legal fees, building and pest inspections, and possibly LMI if your deposit is under 20% and you aren’t using a government guarantee. Stamp duty is state-based and can run into tens of thousands of dollars, so factor it into your savings plan early.
Where to put your deposit savings while you build them
A high-interest savings account (especially one with bonus interest for regular deposits) keeps your money accessible and growing safely. If you’re comfortable locking funds away, the FHSSS can be a tax-effective option. Once you have a home loan, an offset account reduces the interest you pay, but it doesn’t earn interest itself – it’s a different tool for a later stage.
Putting it all together
A realistic path for a first-home buyer often follows a rhythm:
- Set a savings goal based on your target property price, estimated buying costs and probable borrowing capacity.
- Use government calculators and tools to see which schemes you’re eligible for.
- Start saving into a dedicated account and consider the FHSSS if it suits your timeline.
- Approach a participating lender for the 5% Deposit Scheme or Help to Buy if you want a lower-deposit route.
- Obtain pre-approval, search for a home, and make an offer.
- Complete formal loan approval and settlement, then move in.
OZ Home Loan provides general Australian home loan information for borrowers from all language backgrounds. It can accept service enquiries for loan assistance within its scope, but it’s not a lender, doesn’t promise approval or particular rates or savings, and doesn’t give personal financial advice. Learning the steps and government support available is a practical first move – after that, speaking with a licensed professional can help you apply the details to your own situation.