Purchasing your first home is one of the most significant financial milestones you will experience. In Australia, the process involves navigating government grants, understanding lending requirements, saving a deposit, and making decisions that will shape your finances for decades. This guide covers everything you need to know as a first home buyer in 2026.
Understanding Your Deposit
The deposit is typically the largest hurdle for first home buyers. While the standard expectation is 20% of the purchase price, many first home buyers enter the market with significantly less.
On a $600,000 property, a 20% deposit is $120,000. That is a substantial sum, and it is why government schemes exist to help buyers enter the market sooner. With the First Home Guarantee, eligible buyers can purchase with just 5% deposit ($30,000 on a $600,000 property) without paying Lenders Mortgage Insurance.
If you have a smaller deposit, you may still qualify for a home loan, but you will likely need to pay LMI. Some lenders accept deposits as low as 2% for first home buyers with strong income profiles. Your mortgage broker can identify which lenders offer the most competitive terms for your deposit level.
Beyond the deposit itself, budget for additional upfront costs: stamp duty (unless you are exempt), conveyancing or solicitor fees ($1,500 to $3,000), building and pest inspections ($500 to $800), loan application fees, and moving costs. A common rule of thumb is to add 5% of the purchase price for these ancillary expenses.
Government Grants and Schemes
The Australian and state governments offer several incentives designed to help first home buyers. Eligibility criteria, including income caps and property price limits, apply to all schemes.
First Home Owner Grant (FHOG)
The FHOG is a one-off payment from your state or territory government. The amount varies: New South Wales offers $10,000 for new homes valued up to $600,000, Queensland provides $30,000 for new homes up to $750,000, and Victoria offers $10,000 for new homes in metropolitan areas and $10,000 in regional areas (subject to value caps). Each state has different rules, so check your specific jurisdiction. The grant generally applies only to new builds or substantially renovated properties, not established homes.
First Home Guarantee (FHG)
Previously known as the First Home Loan Deposit Scheme, this federal initiative allows eligible first home buyers to purchase with a deposit of as little as 5% without paying LMI. The government guarantees the difference between your deposit and the usual 20% threshold. There are annual place limits, so it pays to apply early. Income caps apply: up to $125,000 for singles and $200,000 for couples (as of the most recent update).
Stamp Duty Exemptions and Concessions
Many states offer stamp duty relief for first home buyers. In New South Wales, first home buyers pay no stamp duty on properties valued up to $800,000 and receive a concessional rate between $800,000 and $1,000,000. Victoria offers exemptions for properties up to $600,000 and concessions up to $750,000. Queensland provides concessions for homes up to $700,000. These thresholds are reviewed periodically, so confirm the current limits with your broker.
Regional First Home Buyer Guarantee
Buyers purchasing in regional areas may have access to additional places under the Regional First Home Buyer Guarantee, which operates on the same principle as the FHG but is specifically allocated for regional purchases.
The Home Buying Process: Step by Step
1. Assess Your Financial Position
Before you start browsing properties, get a clear picture of your finances. Calculate your savings, review your credit history, tally your existing debts, and understand your monthly income versus expenses. Lenders will scrutinise all of this when assessing your application.
Our team at Manage Your Loans offers a free borrowing assessment to help you understand exactly where you stand. This no-obligation consultation covers your income, expenses, deposit position, and grant eligibility.
2. Get Pre-Approved
Pre-approval (also called conditional approval) gives you a written indication from a lender of how much they are willing to lend you. This is not a guarantee of final approval, but it lets you search for properties with confidence and shows sellers and agents that you are a serious buyer. Pre-approvals typically last 90 days.
3. Find Your Property
With your budget established, start your property search. Consider location, proximity to transport and amenities, future development plans in the area, and the type of property (house, apartment, townhouse). Attend open inspections and, when you find a property you are serious about, arrange a building and pest inspection before making an offer.
4. Make an Offer or Bid at Auction
If buying via private treaty, you will submit an offer through the real estate agent. If buying at auction, be aware that auction purchases are unconditional in most states — there is no cooling-off period. Make sure your finance, building inspection, and legal review are completed before auction day.
5. Exchange Contracts and Pay the Deposit
Once your offer is accepted (or you win at auction), you will exchange contracts and pay a deposit, usually 10% of the purchase price held in a trust account. Your solicitor or conveyancer will review the contract of sale before you sign. There may be a cooling-off period (varies by state) during which you can withdraw, though a penalty may apply.
6. Formal Loan Approval
Your broker will submit the formal loan application to the lender, who will conduct a property valuation and verify your financial information. This process typically takes one to three weeks. All loan documents can be signed securely via SignAndGo, our digital document signing platform, so you do not need to visit a branch.
7. Settlement
Settlement is when the property officially becomes yours. Your lender transfers the funds to the seller, and the title is registered in your name. Settlement periods vary but are typically six weeks from exchange. Your solicitor and broker coordinate this process so everything runs smoothly on the day.
Tips for First Home Buyers
- Start saving early. Even small, consistent contributions to a dedicated savings account demonstrate genuine savings to lenders, which strengthens your application.
- Check your credit report. Request a free copy of your credit report from Equifax, Experian, or illion. Errors on your report can affect your borrowing capacity, so address any issues before applying.
- Reduce existing debts. Credit cards, personal loans, and buy-now-pay-later services reduce your borrowing power. Pay down or close unused credit facilities before applying for a home loan.
- Use a broker. A mortgage broker compares products from dozens of lenders and manages your application at no cost to you. This is particularly valuable for first home buyers who may not be familiar with the process. Learn more about our first home buyer services.
- Budget for ongoing costs. Owning a home comes with council rates, water rates, strata levies (for apartments), insurance, and maintenance. Factor these into your monthly budget alongside your mortgage repayments.
- Do not stretch to your maximum. Just because a lender approves you for a certain amount does not mean you should borrow the full amount. Leave a buffer for interest rate rises and unexpected expenses.
Common Mistakes to Avoid
Skipping the pre-approval step. Without pre-approval, you risk falling in love with a property you cannot afford or losing time on applications that do not proceed.
Ignoring additional costs. Many first home buyers focus solely on the deposit and forget about stamp duty, legal fees, inspections, and moving costs. Budget for everything upfront.
Not comparing lenders. Going directly to your existing bank means you only see one set of products. A broker can show you options from over 40 lenders, which often leads to a more competitive rate or better loan features.
Making large financial changes before settlement. Avoid changing jobs, taking on new debts, or making large purchases between pre-approval and settlement. Lenders re-verify your financial position before final approval.
How Manage Your Loans Helps First Home Buyers
Our brokers specialise in helping first home buyers navigate the entire process. We start with a free borrowing assessment, identify every grant and scheme you qualify for, compare loan products across our lender panel, and manage the application through to settlement.
We also use technology to make the process smoother. Loan documents are signed securely via SignAndGo, and you receive regular updates throughout the application process so you always know where things stand.
Ready to take the first step? Explore our first home buyer services or book a free consultation with our team.