First home buyer loans Australia — schemes, deposit, and broker structure

Australia’s first home buyer support framework was substantially restructured in late 2025. The single most important change for buyers in 2026:

First Home Guarantee (FHG) — uncapped from 1 October 2025

Before October 2025, the federal First Home Guarantee was capped at 35,000 places per financial year and rationed across participating lenders. From 1 October 2025, the federal Government removed the per-year cap entirely — every eligible first home buyer can use the FHG without competing for a quota place.

What it actually does: lets eligible buyers purchase with as little as 5% deposit without paying Lenders Mortgage Insurance (LMI), because the federal Government guarantees the lender for the difference between the 5% deposit and a notional 20%. This typically saves $10,000–$25,000 in LMI on a typical first home purchase.

Eligibility (2026):

• Australian citizen or permanent resident, aged 18+.
• Singles with taxable income up to $125,000 in the prior financial year. Couples up to $200,000 combined.
• Owner-occupied purchase only — investment properties are not eligible.
• Property price within the scheme caps for your area.
• Has not previously owned property in Australia (limited exceptions for separated and recently divorced applicants).

The scheme is administered by Housing Australia, the federal corporation that runs all federal home guarantee schemes. The FHG is delivered via a panel of participating lenders (see firsthomebuyers.gov.au for the current list).

Family Home Guarantee (FamHG)

Specifically for single parents and single legal guardians of dependent children — eligible buyers can purchase with as little as 2% deposit, no LMI. This stream folded into the 5% Deposit Scheme on 1 October 2025, which removed both the $125,000 income cap and the 5,000-place annual limit. Property price caps still apply.

Regional Home Guarantee

Available alongside the FHG for buyers purchasing in regional areas. Same 5%-deposit-no-LMI structure, with regional postcode requirements.

What this means in practice

If you’re an eligible owner-occupier first home buyer in 2026, the FHG is almost always the first thing to test for. It often reduces the practical deposit barrier from "20% + costs" to "5% + costs", which collapses years off most savings timelines.

But — and this matters — eligibility for the scheme is not the same as approval for a loan. You still need to satisfy the lender’s serviceability assessment (income covers repayments at the buffered rate), credit history, and deposit genuine savings rules. We see borrowers each month who are scheme-eligible but loan-unready, and vice versa. The two assessments run in parallel.

The First Home Super Saver Scheme is the federal government’s tax-advantaged savings scheme specifically for first home deposits. It is consistently underused — partly because it requires a small amount of forward planning and a phone call to your super fund.

How it works

You make voluntary contributions to your superannuation fund (salary sacrifice or after-tax personal contributions you claim a deduction for). Up to $15,000 per financial year and $50,000 in total per person can be saved this way for first-home-deposit purposes.

When you’re ready to buy, you apply to the ATO via myGov to release those contributions plus an associated earnings amount. The released funds become your deposit.

Why it matters — the tax gap

Your marginal tax rate on income is typically 32.5–45% (plus Medicare). Inside super, contributions are taxed at 15%. The gap (often 17.5–30 percentage points) is real money — for many first home buyers, the FHSSS adds $3,000–$8,000 to their realised deposit compared with saving the same amount in a normal savings account.

Couples can each contribute, doubling the total to $100,000.

The release calculation

When you withdraw, the ATO releases your eligible contributions (the amounts above your employer Super Guarantee), less the 15% contributions tax already paid, plus an associated earnings amount calculated using a deemed rate (currently the 90-day BBSW + 3% — well above most savings account interest rates).

The released amount is taxed at your marginal tax rate less a 30% offset when withdrawn, which usually nets to a low or zero tax payment. The ATO's FHSSS calculator gives an exact figure based on your salary and timing.

The catch

You can’t withdraw FHSSS savings unless you’ve applied to release them first via the ATO and received a determination, before signing a contract. If you sign first and apply later, you may not be eligible. Order matters.

You also need to enter into a contract (or build) within 12 months of release, with one 12-month extension permitted on request. If you never buy, the funds revert into super (penalty-free in the simple case, but it’s a long process).

Worth doing if

• You have at least 12 months before you plan to buy.
• You earn over $45,000/year (so the marginal-tax-rate vs 15% gap is meaningful).
• Your employer offers salary-sacrifice arrangements (or you can make personal deductible contributions and lodge a tax return).

Authoritative reference

ATO’s page on First Home Super Saver Scheme is the canonical source — bookmark it.

Help to Buy is Australia’s federal shared-equity scheme, where the federal Government takes a 30–40% equity stake in your home in exchange for not requiring you to fund that portion of the deposit.

How it differs from FHG

When Help to Buy makes sense

• Lower-income buyers who cannot service a 95% loan even with the LMI waiver of the FHG.
• Buyers in areas where prices are high relative to income — the smaller mortgage means lower repayments.
• Buyers comfortable with the trade-off of capital gain sharing, which is often invisible until you sell.

The equity buy-back

Over time, you can buy out the Government’s equity in 5% increments (the property is revalued each time). When you sell, you owe the Government their proportional share of the sale price (which has grown if the property appreciated, shrunk if it didn’t).

Authoritative reference

Help to Buy (shared equity) is the canonical public source on firsthomebuyers.gov.au. The scheme operates federally but is delivered via a participating lender panel — not all lenders offer it, which is one reason a broker conversation often saves time.

Stamp duty (officially "transfer duty") is a state tax. Concessions and exemptions for first home buyers vary considerably between states and change with state budgets. Snapshot of the major capital city states as at early 2026 — always check the linked official source for current numbers before you commit.

New South Wales — First Home Buyers Assistance Scheme:

• Full exemption on properties up to $800,000.
• Concessional rate on properties between $800,000 and $1,000,000 (sliding scale).
• Above $1,000,000, full duty applies.
• NSW Revenue — First Home Buyers Assistance Scheme

Victoria — First Home Buyer Duty Exemption / Concession:

• Full exemption on properties up to $600,000.
• Concession on properties between $600,000 and $750,000 (sliding scale).
• Above $750,000, full duty applies.
• State Revenue Office Victoria

Queensland — First Home Concession:

• Full exemption on properties up to $700,000 (raised from $550,000 effective 1 May 2024).
• Concession between $700,000 and $800,000.
• Above $800,000, full duty applies. (For new homes, the Home Concession applies to all values with a flat rate.)
• Queensland Revenue Office

Western Australia — First Home Owner Rate:

• No duty on homes up to $450,000.
• Concession between $450,000 and $600,000.
• For vacant land: no duty up to $300,000.
• WA Department of Finance

South Australia — First Home Owner Concession:

• Stamp duty abolished for new and off-the-plan first homes (no value cap as of 2025–26 budget).
• For established homes, normal duty applies but a First Home Owner Grant of $15,000 may be available for new builds.
• RevenueSA

Tasmania — First Home Owner Duty Concession:

• 50% duty concession on homes up to $750,000 (2024–26 measure, check current end date).
• State Revenue Office of Tasmania

Australian Capital Territory — Home Buyer Concession Scheme:

• Income-tested; for eligible buyers, duty can be reduced or eliminated at certain price thresholds.
• ACT Revenue Office

Northern Territory — Various FHO grants and concessions; check current programs:

• NT Treasury — First Home Owner

Important: these thresholds are bumped at most state budgets and the property must be your principal place of residence (you must move in within 12 months and live there for at least 6–12 months depending on state). Investment purchases are not eligible. Always confirm the current scheme rules with the state revenue office at the time you commit.

Most first home buyers focus exclusively on the deposit and are blindsided by the other two costs at settlement. Plan for all three from day one.

Number 1 — The deposit (the obvious one)

Lender minimum, after federal scheme support:

• 5% deposit under FHG (no LMI). Most common path for eligible borrowers.
• 2% deposit under FamHG for single parents.
• 20% deposit is the conventional no-LMI threshold.
• Below 20% without scheme support: LMI applies. Premium scales with LVR — 95% LVR means a hefty premium ($15k–$30k typical on a $700k purchase).

For a $750,000 purchase under FHG at 5% deposit: deposit needed = $37,500.

Number 2 — Stamp duty (state tax)

Even with first-home concessions, stamp duty often applies above the concession threshold. Use the snapshot in section 4 above — and the moneysmart calculator for your state.

For a $750,000 NSW purchase: stamp duty under the First Home Buyers Assistance Scheme = partial concession (between $800k full exemption and $1m). Roughly $19,000–$22,000 actual duty payable depending on the formula.

Number 3 — Other settlement costs and buffer

Every first home settlement incurs:

• Conveyancer / solicitor: $1,200–$2,500.
• Building and pest inspection (optional but standard): $400–$700.
• Lender application / settlement fees: typically $0–$600 if not waived.
• Mortgage registration & transfer fees: ~$320 combined (state-dependent).
• Council and water rates adjustments at settlement: typically $300–$1,500 depending on date.
• Building insurance: must be in place for settlement, often $1,200–$2,500/year for a freestanding home.
• Strata/owners corp first-quarter levy (units): variable.
• Moving costs: $1,000–$3,000 unless DIY.
• Furniture, appliances, post-settlement essentials: budget $5,000–$15,000 unless you’re moving in fully equipped.

The total picture for a $750,000 NSW first home under FHG

The deposit alone is just under half of what you actually need. The "5% deposit FHG" framing makes it sound like $37,500 is enough — it isn’t. Buyers who plan for $84,000 and end up at $66,300 have a smooth settlement and a comfortable first 12 months. Buyers who plan for $37,500 and discover the rest at settlement panic-borrow.

Genuine savings

Most lenders require at least 5% of the deposit to be genuine savings — money saved over a continuous 3-month period, not a gift, inheritance, or windfall. Some lenders waive this for FHG borrowers; others don’t. Worth confirming early.

Online "borrowing power" calculators are a starting point. The real number is set by the lender’s serviceability assessment, which is more conservative.

How it actually works

Lenders test your capacity to service the loan at the assessment rate, which is the actual rate plus the APRA-required 3.0% serviceability buffer (in place since November 2021).

If today’s actual variable rate is 5.94%, the lender tests serviceability at 8.94%. They calculate your monthly repayment at that rate over the loan term, then check it fits within your monthly income after living expenses and other debts.

The four levers that move borrowing capacity

1. Income — gross income before tax. PAYG salary, bonuses (often shaded — averaged over 1–2 years), commissions, overtime (often excluded unless 12+ months consistent), rental income (typically 70–80% of gross rent counted), and investment income.
2. Living expenses — declared, but lenders cross-check against the HEM benchmark (Household Expenditure Measure). If your declared expenses are below HEM for your household size, the lender may use HEM instead. HEM is updated quarterly by Melbourne Institute on behalf of lenders.
3. Existing debts — every dollar of monthly debt repayment shrinks your capacity. Credit cards are assessed at 3.8% of the limit per month (regardless of balance — yes, even a $0 balance card with a $20k limit reduces your capacity by $760/month worth of "phantom debt"). Personal loans, car loans, BNPL accounts are all counted.
4. HECS-HELP — your HELP balance creates a tax-rate-based annual repayment that lenders must include in the serviceability calculation. A $40,000 HELP debt on a $90,000 income reduces your annual servicing capacity by ~$5,400/year.

The HECS conversation

HECS-HELP is a frequent flashpoint. Two facts every first home buyer should know:

• The repayment schedule is income-based: you pay 1–10% of your gross income each year via your tax (the rate increases with income). ATO HELP repayment thresholds.
• Lenders include it in serviceability, every year you have a balance — even $1.

So a $20,000 HELP debt feels small but materially shrinks your borrowing capacity for as long as it exists. Strategy options:

1. Pay it off entirely before applying — if you have the cash sitting in offset, this is often the highest-leverage move available. A $20k repayment can lift borrowing capacity by $30k–$80k depending on income and other variables.
2. Pay down to the threshold — every $1k reduction in HELP balance shifts the assessment slightly.
3. Just borrow less — for many buyers, this is fine.

Don’t make this decision lightly — there's a tax-time loss-of-deduction angle for some borrowers. Speak to your accountant.

Quick reference — borrowing capacity by income (rough, 2026)

For a single PAYG borrower, no other debts, no HECS, declared living expenses at HEM:

Couples with combined income of $180,000 typically max around $880,000–$1,000,000 in 2026 conditions. Numbers move with rates, lender, and your specific facts. Get a written assessment before you fall for a property.

Phase 1 — Discovery and prep (1–6+ months). You decide you’re buying. We have a free 30-minute conversation, map out scheme eligibility, run a borrowing-capacity estimate, and identify any prep work (HECS pay-down, card limit reductions, FHSSS contributions, paying off a personal loan). No application yet, no credit check.

Phase 2 — Pre-approval (1–3 weeks). You’ve done the prep. We submit a formal pre-approval (also called conditional approval) to a lender. Lender takes 3–10 business days. Pre-approval is typically valid for 90 days (sometimes 60), and confirms a maximum loan amount subject to a satisfactory property valuation. Pre-approval is not unconditional — many people misunderstand this.

Phase 3 — Property hunting (1–9 months). Pre-approval in hand, you inspect properties. When you find one, the building and pest inspection and conveyancer review happen first. Make an offer. If accepted, exchange contracts (with cooling-off period in most states except QLD, where contracts are binding immediately).

Phase 4 — Unconditional approval (1–2 weeks). Property selected, contracts exchanged. The lender assesses the specific property — orders a valuation, checks the contract, finalises credit conditions. Pre-approval converts to unconditional approval.

Phase 5 — Settlement (typically 6 weeks after exchange in most states). Conveyancer prepares the title transfer, checks adjustments, and handles trust money. On settlement day, lender pays the seller, you pay your contribution, the title is transferred, and you collect the keys.

Total timeline

From first conversation to keys, 6–18 months depending on where you are. Buyers who already have a deposit and a reasonably clear file can move from first conversation to settlement in 8–12 weeks if they find a property quickly.

Composites built from real client scenarios with names and numbers altered. Illustrative only.

Case study A — Single buyer, FHG with FHSSS-augmented deposit

The buyer: Anna, age 29, marketing manager. Lives in Sydney’s Inner West, wants to buy a 1-bedroom unit. Income $108,000 PAYG.

The numbers:

• Total savings at first conversation: $48,000 (mostly held outside super).
• HECS balance: $14,000.
• Credit card limit: $12,000 (zero balance, never used).
• Target purchase: $720,000 unit in St Peters / Marrickville.

The strategy (executed over 8 months):

1. Card limit cut from $12,000 to $4,000 — boosted borrowing capacity by ~$22,000.
2. FHSSS contributions — Anna salary-sacrificed $15,000 over 12 months into super, augmenting the deposit by ~$13,500 net of contributions tax (vs ~$10,500 if she’d saved into a normal account at her marginal rate).
3. HECS pay-down — Anna paid $5,000 off HECS using cash savings (down from $14k to $9k). This lifted her annual servicing capacity by ~$1,300 — small but useful.
4. Pre-approval lodged under First Home Guarantee with a participating non-bank lender at 5.84%.

The outcome: Pre-approval at $665,000. Anna found a $695,000 unit, negotiated to $682,000. Total funds-to-complete: $50,800 (5% deposit + stamp duty concession + costs). Paid via existing savings + FHSSS release + a small parental contribution. Settlement 6 weeks after exchange.

Key lesson: Several small structural moves (card cut, FHSSS, HECS chip-down) compounded to unlock a purchase that "didn’t fit" at first measurement. The 8-month prep window mattered — not the deposit alone.

Case study B — Couple, Help to Buy in Melbourne

The buyers: Maya and Tom, ages 31 and 33. Combined income $135,000 (Maya $75k as a teacher, Tom $60k as a chef). Two children under 5, in childcare.

The numbers:

• Combined savings: $45,000.
• Mortgage borrowing capacity assessment under FHG: ~$520,000. Outer-north Melbourne family-suitable houses they wanted started at $620,000.
• Help to Buy assessment: 30% government equity contribution available. Effective loan needed: $434,000 (70% of a $620,000 home).

The strategy: Apply via Help to Buy with a participating lender. Government takes a 30% equity stake; the family services a $434,000 loan instead of $589,000. Servicing comfortable on combined income. Acquired a 4-bedroom home in outer-north Melbourne.

The outcome: Settled at $610,000 in mid-2025. Government holds 30% equity; family owes $427,000 on a 30-year loan. Monthly repayment ~$2,560 vs ~$3,490 if they had taken the full loan — a saving of nearly $1,000/month, which is what made the family budget viable with two kids in childcare.

Trade-off: When they sell or refinance, the government takes 30% of the sale value (or current valuation). If the home grows from $610,000 to $760,000 over 10 years, the government’s share grows from $183,000 to $228,000 — a $45,000 effective cost for the support. Maya and Tom decided that was a fair price for entry now vs continued renting and waiting.

Key lesson: Help to Buy is the right answer when serviceability — not deposit — is the binding constraint. For lower-income families, the smaller mortgage matters more than retaining 100% of the future capital gain.

Case study C — Solo single buyer, NSW, post-October 2025 FHG uncapped

The buyer: Priya, age 34, registered nurse, recently divorced. Income $98,000 PAYG. Lives in Western Sydney.

The numbers:

• Savings: $54,000 (post-settlement of marital property).
• HELP balance: $0 (cleared with marital settlement).
• Other debts: $0.
• Target purchase: $720,000 townhouse in Liverpool / Fairfield.

The strategy: Uses the post-October 2025 uncapped FHG (no quota concerns). Lodges pre-approval with a participating lender at 5.84%. Borrowing capacity comfortably $640,000+.

Outcome: Pre-approved within 7 business days. Found a $702,000 townhouse 5 weeks later. Funds-to-complete:

• 5% deposit: $35,100
• Stamp duty (NSW FHB exemption applied — under $800k): $0
• Other costs: $4,200
• Total: $39,300

Settled with $14,700 buffer remaining. Monthly repayment $4,015 on a $666,900 loan at 5.84% over 30 years — comfortable on her income.

Key lesson: For an eligible buyer in a state with strong stamp duty concessions, the FHG + state stamp duty exemption stack collapses the practical entry barrier dramatically. Priya’s entry from "I’m thinking about buying" to keys took 14 weeks.

1. Falling in love with a property before pre-approval. You can’t make a credible offer; you might bid against yourself in your own head; you’ll panic if your real number comes back lower.

2. Treating online "borrowing power" as a real number. Run a written assessment with a broker before assuming.

3. Not closing or reducing unused credit cards. Each card is assessed at 3.8% of limit per month — unused cards still count.

4. Using BNPL services in the 6 months before applying. Afterpay, Zip, Latitude — every visible BNPL transaction shows up on bank statements and reduces capacity (and triggers extra lender questions).

5. Big lifestyle purchases on cards in the 3 months before application. Lenders read 3 months of bank statements. A $4,000 holiday on the card a month before lodgement looks bad — even if you’ve paid it off.

6. Forgetting genuine savings rules. A gift from family is welcome but must be declared and documented with a statutory declaration that it’s not a loan; lenders may still require 5% genuine savings on top.

7. Ignoring HECS. Every dollar of HELP debt reduces capacity. Sometimes paying it off is the highest-leverage move available. Run the numbers before assuming.

8. Not understanding stamp duty thresholds. Buying at $810,000 in NSW pays full stamp duty. Buying at $799,000 pays zero. Sometimes it’s worth negotiating the price down to a threshold rather than chasing extra features.

9. Assuming pre-approval = approval. Pre-approval is conditional on the specific property’s valuation, the contract, and the lender’s remaining policy checks. Don’t exchange contracts without unconditional approval (or a finance clause).

10. Skipping the building and pest inspection. $500 to confirm that the $700,000 home isn’t a moisture-saturated termite buffet. Always do this.

11. Leaving pre-approval to expire. Pre-approvals are typically 90 days. After that, your file is re-tested and your numbers may have moved (rate changes, salary changes, new debts).

12. Not understanding cooling-off rights. Most states have a 5-business-day cooling-off period after exchange, with a 0.25% forfeit. QLD contracts have no cooling-off in private sales (only at auction). Always have your conveyancer review before signing.

• Australian Government 5% Deposit Scheme — the federal low-deposit pathway.
• Help to Buy (shared equity) — federal shared-equity scheme.
• Family Home Guarantee (single parents) — 2% deposit for eligible single parents.
• ATO — First Home Super Saver Scheme — FHSSS canonical.
• ATO — HELP repayment thresholds — HECS context.
• ASIC MoneySmart — First home buyers — consumer guidance.
• ASIC MoneySmart — Stamp duty calculator — by state.
• State revenue office links for stamp duty (see section 4 above).

Ready to talk?

If you’ve worked through this guide and want to map out your specific situation, the next step is a free 30-minute conversation. Send through your income, savings, any debts, target suburb and price range, and your timeline. Call me on 0400 77 77 55 or send a short enquiry — I'll come back to you on a business day, usually within a few hours.