The Complete First Home Buyer Guide: how to buy your first home in Australia

Most first home buyers in Australia can now buy with a 5% deposit and skip lenders mortgage insurance. If buying your first home feels overwhelming, you’re far from alone. Cost of living pressure is real, prices have climbed in most capital cities, and competing against more experienced buyers can make the whole thing feel out of reach.  

The encouraging part is that there are more pathways into home ownership than most people realise, and the deposit you need is often smaller than you think. This First Home Buyer Guide is written for buyers, not banks. Take a closer look now. 

Key takeaways

Where to start: the fastest, safest path into the housing market

There are three beliefs that hold more people back than any actual barrier in the market, and we’re here to squash them.

For one, you don’t need a 20% deposit. You don’t need perfect savings either, and you don’t need to wait for the perfect time.  

For most first home buyers in 2026, the quickest and safest way in is a combination of three things working together: a government scheme that lowers the deposit you need, a deposit strategy that brings together more than one source of funds, and a loan pre-approval that tells you exactly what you can spend before you start looking. Here’s how this guide for first time home buyers builds each of those pieces, with first home buyer tips for every step. 

Who is considered a first home buyer? Am I eligible?

Can you afford to buy faster than you think?

Grants, schemes and guarantee programs have made it easier to enter the market than at any time in recent years. Since 1 October 2025, any eligible first home buyer can buy with a 5% deposit and skip lenders mortgage insurance, with no income test and no waiting list. 

It also helps to treat your deposit as a strategy rather than a savings target. Once you look at the options, most buyers find they don’t need to save for years. A deposit bond can cover the 10% deposit you need at exchange while your savings, scheme support and finance come

Understanding your buying budget as a first home buyer

Other upfront costs to budget for

Beyond your deposit, plan for upfront costs of roughly 3 to 5% of the purchase price. These typically include: 

Lenders mortgage insurance can be one of the largest of these costs, and it’s avoidable when you buy through the 5% Deposit Scheme.

If the home you buy needs work, set aside a renovation allowance as well. Pricing the jobs you want done in the first year (once the property is secured) keeps them part of your overall budget rather than a cost that lands after settlement. 

How to get your finances ready to buy your first home

Before you start your search, it’s worth getting your finances into shape. Building a full house deposit in cash isn’t the only way in, though. If you’re buying with a guarantor, family equity can cover the deposit you would otherwise spend years saving, and a deposit bond can stand in for the 10% cash deposit at exchange, with your guarantor-backed loan and mortgage finance paid in full at settlement. 

Here are some first time home buyers tips and advice: look at your budgeting, your savings goal, how much genuine savings you have, and your credit score. These will all impact how much you can borrow. 

How much can a first home buyer borrow in Australia?

Your borrowing capacity is driven by your income, your existing debts and expenses, current interest rates and the size of your deposit. As a rough guide, a household income in the region of $90,000 to $110,000 can often support a loan of around $500,000. A borrowing calculator can help you determine a more accurate figure, as well as getting pre-approval from a lender or broker. 

Choosing the right home loan

Home loans come in three main shapes: fixed, variable, and split. A fixed rate locks your repayments for a set period. A variable rate moves with the market and usually offers more flexibility. A split loan combines both. 

Not sure which one to choose? Apply directly with a lender or mortgage broker, who can compare your options across many lenders and handle much of the paperwork with you.  

How Much Can You Borrow With a Guarantor?

With a guarantor, some lenders will let you borrow up to 100% of the property value, and a few will go slightly beyond to help cover costs like stamp duty. Serviceability still applies, so you need to show you can comfortably manage the repayments on your income, and some lenders still want to see around 5% in genuine savings. The guarantee removes the deposit hurdle, not the need to prove you can afford the loan. 

Build your deposit plan

Your deposit doesn’t have to come from one place, and most first home buyers pull it together from two or three sources. The five most common sources are your own savings, the First Home Super Saver Scheme, a gift from family, family equity through a guarantor, and a government scheme that shrinks the deposit you need in the first place.  

When the money is coming from a mix like this and it isn’t all sitting in one account on the day you exchange, a deposit bond can stand in for the cash deposit and keep the purchase moving while your funds come together. 

Government schemes and grants for first home buyers

There’s more help out there than most buyers expect, and some of it stacks. Below are the government schemes and grants for first home buyers. 

First Home Owner Grant (FHOG) by state

The FHOG is a one off cash grant, now almost always for new or newly built homes. So how much is the first home buyers grant? It depends on where you buy, ranging from $10,000 up to $50,000. A brief overview is below: 

What the 2026 budget means for first home buyers

The 2026 Federal Budget, handed down on 12 May 2026, tilted the whole system towards new homes, and first home buyers came out ahead. Four changes stand out.  

First, the 5% Deposit Scheme stays in its expanded form, with no income caps and unlimited places, so the low deposit path is here to stay rather than a short-term offer.  

Second, from 1 July 2027 negative gearing will be limited to new builds, which means investors buying established homes after Budget night lose a tax perk they’ve long relied on, taking some of the heat out of the competition you face for existing places.  

Third, the capital gains tax rules are being reworked, with the current concessions kept for new homes while established investment properties move to a less generous footing from 1 July 2027.  

Fourth, the Budget put $10 billion towards building up to 100,000 homes that will only be sold to first home buyers, adding supply aimed squarely at people getting in. The Treasury expects all this to help around 75,000 extra first home buyers over the decade, and the temporary ban on foreign buyers picking up established homes has been pushed out to 30 June 2029 to keep more of those homes available to locals.

What type of home should first home buyers buy?

There’s no single right answer: it comes down to your budget, your stage of life, and the suburb you want to be in. It also helps to split your must-haves from your non-negotiables. 

With that in mind, here are your main options. 

Buying an established home

An established home lets you move in sooner and see exactly what you’re getting, from the street and the neighbours to the way the afternoon light comes in. The catch is that you’ll want to budget for inspections and the odd update or repair, and in most states the grants no longer stretch to existing homes. For plenty of buyers, the certainty and the location are well worth it. 

Buying an apartment, unit or townhouse

Apartments, units and townhouses are often where first home buyers get their start, because the lower price tends to sit comfortably inside the scheme caps and there’s far less upkeep than a freestanding house. The things to check are the strata fees and the bylaws, which can shape everything from pets to renovations. 

Buying land and building a house

Building lets you shape the home around you, and it can open the door to new build incentives and grants. The trade-offs are time and a bit of risk, since a build can run for many months and the costs need watching along the way. You also pay in stages as the work progresses rather than all at once on settlement, which changes how your finance is set up. 

Buying off-the-plan

Buying off the plan means paying a deposit when you exchange, and settling once the building is finished. The risks to keep in mind are that the market can move before completion and that sunset clauses can let a contract end if the build drags on.  

On the upside, you’ll often pick up new build incentives and the First Home Owner Grant, and you lock in today’s price. Because your money can be tied up for a long build, a deposit bond can secure the place at exchange without locking away your cash, so your savings keep working for you until settlement. 

Rentvesting (buying an investment property first)

Rentvesting means buying an investment property somewhere you can afford while you keep renting where you really want to live. It can be a clever way onto the ladder when prices in your dream suburb are out of reach for now. The catch is that most of the first home buyer schemes and grants expect you to live in the home, so they generally won’t apply to an investment buy. 

Buying with a partner, family or friends

Why not buy with a partner, a friend, or someone chasing the same goal as you? Pooling your incomes and deposits can bring a place within reach far sooner. One way to hold it is as tenants in common, where each of you owns a set share of the property as a percentage. Couples more often choose joint tenants, where you own the whole thing together and the survivor inherits the other’s share. 

There are a few things to remember. Even though each person owns a portion of the property, the lending on it is owed by everyone jointly. So if one person stops paying their share, all the owners are still on the hook for the whole debt. 

We recommend a written partnership agreement that covers: 

• Who makes the day-to-day calls on the property, and how much they can spend on repairs or incidentals before they need the others to sign off 
• How you’ll handle disputes 
• What happens if one of you wants to sell. 

How do you choose the right location for your first home?

Picking a suburb is really about balancing what you need today with where the area’s heading. Look at the daily commute and how you’ll get around, the schools and childcare catchments if they matter to you, the everyday amenities like shops, parks and health services, where prices have been moving and what’s being built nearby, and whether the place simply feels like you.  

Suburb research makes this much easier, and the free suburb profiles on CoreLogic, Domain and realestate.com.au give you median prices, recent sales and local detail so you can line a few areas up side by side before you start inspecting. 

Buying at auction as a first home buyer

An auction is a public sale where buyers bid out in the open and the highest bid above the reserve takes the place, which is a different beast from a private treaty sale where you negotiate a price with the agent over time. The bits that catch first home buyers out are that there’s no cooling off period at an auction, the deposit has to be paid on the day, and the contract is unconditional, so your finance and inspections need to be sorted beforehand. 

Walking in prepared really counts, so get pre-approval first so you know your ceiling. Set a hard walk-away price before the day, and stick to it. Lastly, have your deposit ready to go. 

What happens during the first home buyer process

Once your finance and budget are sorted, the road to the keys tends to run in the same order: 

1. Search and shortlist places in your price range. 
2. Make an offer, or get ready for auction if it’s going under the hammer. 
3. Have a solicitor or conveyancer look over the contract of sale before you commit.
4. Cooling off period, which varies by state and doesn’t apply to auctions. 
5. Line up building and pest inspections to check the place over. 
6. Apply for formal loan approval on that specific property. 
7. Settlement, when the money changes hands and the place is yours. 
8. Grab the keys and move in. 

Common first home buyer mistakes to avoid

These are the slips that trip buyers up most often, and the first home buyer tips to dodge them: 

• Skipping pre-approval. The fix: get pre-approved before you inspect, so you know your budget and can move quickly. 
• Underestimating the true cost of buying. The fix: budget for the full 3 to 5% of upfront costs on top of the deposit. 
• Missing out on grants and schemes. The fix: check every federal and state program you might qualify for before you buy. 
• Skipping building and pest inspections. The fix: always inspect, because a small fee now can save you a huge repair bill later.
• Choosing the wrong loan structure. The fix: match the loan type and features to the way you really handle money.
• Overextending the budget. The fix: buy below your borrowing ceiling so the repayments stay comfortable.
• Ignoring strata fees on units. The fix: build the ongoing strata cost into your monthly budget from the start. 
• Not building in a rate rise buffer. The fix: stress-test your repayments at 2 to 3% above the rate you’re offered. 
• Buying emotionally rather than financially. The fix: set your numbers first and let them lead the decision. 
• Skipping home and contents insurance. The fix: have cover in place from settlement day, not after. 
• Waiting for the perfect timing. The fix: focus on what you can buy well now rather than trying to guess the market. 
• Misunderstanding how guarantees work. The fix: remember the government guarantees part of the loan; it doesn’t hand you the deposit.
• Assuming the exchange deposit has to be cash. The fix: a deposit bond can stand in for the cash deposit at exchange when your funds are tied up.

Real first home buyer stories

The pathways above look different depending on what you’re buying and who’s helping you. These three examples show how. 

Buying an established home with a 5% deposit

Dani and Cam were renting in Brisbane with around $32,000 saved, enough for a 5% deposit on the townhouses they’d been inspecting. Auction day was the sticking point, because the contract deposit is 10% and falls due on the spot, with no cooling off period. 

A broker confirmed they qualified for the Australian Government 5% Deposit Scheme and got them pre-approved. A deposit bond then bridged the gap between the 10% the contract required and the 5% they held, so they could bid without finding another $32,000 on the day. The bond covered the deposit at exchange, their savings and loan settled the purchase six weeks later, and the scheme meant no lenders mortgage insurance. 

Buying off the plan with a deposit bond

Steph had her eye on a new apartment in Melbourne’s inner north, due for completion in about 18 months. Off the plan works differently to an established home: the 10% deposit is payable at exchange, then sits there for the whole build. 

She had the savings, but tying up $58,000 for 18 months meant losing the interest on it and the flexibility to move if her circumstances changed. A deposit bond secured the apartment at exchange without handing over cash, so the money stayed in her account and kept earning until settlement. 

Buying a house and land package with family help

Marcus and Lily were buying a house and land package on Perth’s outer edge. House and land is paid in stages: the land contract settles first, then the build is drawn down as work progresses. The deposit at exchange is on the land contract, so cash is still needed upfront even though the home doesn’t exist yet. 

Their savings were modest, so Lily’s parents acted as guarantors using equity in their home, which covered the shortfall and removed lenders’ mortgage insurance. A deposit bond covered the deposit due on the land contract at exchange. They also qualified for the state First Home Owner Grant on the new build and paid stamp duty on the land value only. 

Your next steps by scenario

Wherever you’re starting from, here are some first time home buyers tips and advice to find your move.

I have 5% saved

You’re probably ready to go through the 5% Deposit Scheme. Have a chat with a participating lender or broker to confirm you’re eligible and get pre-approval, then check the price cap for the areas you’re eyeing. With your deposit and pre-approval sorted, you can start inspecting with confidence. 

I have family who can help

A family gift or a guarantor can lower the deposit you need or wipe out lenders mortgage insurance. Talk to a broker about how a guarantor loan works and what it asks of your family member, and put any gift in writing for the lender. Paired with the 5% scheme, a bit of family help can bring your purchase forward in a big way. 

I have super but not much cash

The First Home Super Saver Scheme is made for you. Start your voluntary contributions now to build up releasable funds, and request your release determination from the Australian Taxation Office before you buy. Team it with the 5% Deposit Scheme to keep the cash you need upfront nice and low. 

I am buying at auction this weekend

Make sure your pre-approval is current and set a firm walk-away price before you turn up. Have your deposit ready, and think about a deposit bond so you can bid without organising a bank cheque or shifting cash first. If this one slips away, a deposit bond keeps you ready for the next. 

I want to buy but I’m in a different state than where I want to live

Rentvesting might suit you, though the owner-occupier grants won’t apply to that one. Or, if you plan to live in the new place, the federal schemes still work wherever in Australia you buy. Either way, run the numbers with a broker or adviser before you decide. 

FAQs

This article is general information only and is not financial advice. Speak to a licensed mortgage broker or financial adviser before making decisions.