First Home Buyer Guide Australia: Your Step-by-Step Path to Owning a Home (2026)

Hand stacking coins next to a small house model, representing saving a deposit for a first home in Australia

Last updated: June 2026  |  Reading time: 11 min

A cousin of mine spent the better part of two years bouncing between mortgage broker websites, Reddit threads, and half-finished government fact sheets trying to piece together how first home buying actually works in Australia. By the time she bought, she'd figured most of it out — but admitted she wished someone had just laid out the whole path in order, instead of her discovering each piece separately, usually after already making a decision that turned out to be slightly wrong.

This is that roadmap. It won't replace talking to a mortgage broker, but it'll tell you what to research, in what order, and which government schemes are actually worth your time.

The Seven-Step Path to Your First Home

  1. Work out how much deposit you actually need

    Your deposit determines your Loan-to-Value Ratio (LVR) — the percentage of the property you're borrowing. A 20% deposit avoids Lenders Mortgage Insurance entirely. Less than that, and you're either paying LMI or using a government scheme to avoid it. Most first home buyers start here and work backwards from a target price.

  2. Boost your deposit using the First Home Super Saver scheme

    Before you start grinding away purely in a savings account, look at FHSS. Voluntary super contributions are taxed at just 15% instead of your marginal rate, and you can release up to $50,000 (or $100,000 as a couple) toward your deposit. It takes planning ahead — ideally a few years before you buy — so this is worth understanding early.

    → Read the full FHSS guide

  3. Check if you qualify for the Home Guarantee Scheme

    If a 20% deposit feels years away, the federal Home Guarantee Scheme lets eligible first home buyers purchase with as little as a 5% deposit, with the government guaranteeing the rest — and zero LMI. Places are limited each financial year and there are property price caps depending on location, so check availability early rather than assuming a spot will be open when you're ready.

  4. Understand LMI before you commit to a smaller deposit

    If you're not using a guarantee scheme and you're buying with less than 20% down, Lenders Mortgage Insurance applies — and it can run into the tens of thousands. It protects the bank, not you, and it's non-refundable. Know the real cost before deciding whether paying it makes sense for your situation versus waiting or using a guarantee scheme instead.

    → Read the full LMI guide

  5. Check your state's stamp duty exemptions

    Every state and territory offers some form of stamp duty concession or exemption for first home buyers, usually tied to a property price threshold. In some states this can save you tens of thousands of dollars outright. The rules vary significantly by state, so check your specific state revenue office rather than assuming national rules apply.

  6. Get pre-approval before you start seriously looking

    Pre-approval (also called conditional approval) tells you what a lender is actually willing to lend you, based on your income, expenses, and deposit. It's not a guarantee, but it stops you from falling in love with a property outside your real budget, and it signals to sellers that you're a serious buyer. Most pre-approvals last 90 days, so timing matters — don't get it too early.

  7. Budget for the costs beyond the deposit

    Stamp duty (if not exempt), conveyancing or solicitor fees, building and pest inspections, loan establishment fees, and council rate adjustments all add up. As a rough guide, budget an extra 3-5% of the purchase price on top of your deposit for these combined costs, depending on your state.

Three Ways to Bridge the Deposit Gap

Most first home buyers don't have a full 20% sitting in a savings account. There are three realistic paths to closing that gap, and they're not mutually exclusive.

5%
Home Guarantee Scheme

Government guarantees the remaining 15%. No LMI. Limited places per year, price caps apply by location.

10-15%
Family guarantor loan

A parent offers equity in their own home as extra security, bringing your effective LVR below 80%.

20%
Full deposit + FHSS

Combine personal savings with FHSS contributions taxed at 15% to reach a genuine 20% deposit faster.

10-15%
Pay LMI directly

Sometimes the right call in a fast-moving market — buy now and absorb the LMI cost rather than miss the property.

🏡 First Home Deposit Planner

Work out your deposit target and which pathway fits your situation.

$650,000
$50,000
$1,500 / month

20% deposit target

$130,000

5% deposit target (HGS)

$32,500

Time to 20% deposit

~4.4 years

Time to 5% deposit (HGS)

Already there!

You already have enough for a 5% deposit. The Home Guarantee Scheme could get you into the market now without LMI — check current place availability and price caps for your state.

Estimates only. Doesn't include stamp duty, legal fees, or other purchase costs — budget an additional 3-5% on top of your deposit.

Your Pre-Purchase Checklist

Before you make an offer, make sure you have:

✓ Pre-approval from a lender (valid, not expired)
✓ Confirmed which deposit pathway you're using (FHSS, HGS, guarantor, or standard)
✓ Checked your state's stamp duty exemption thresholds
✓ Budgeted for conveyancing, inspections, and settlement costs (3-5% extra)
✓ Engaged a conveyancer or solicitor (lined up, even if not yet started)
✓ Arranged a building and pest inspection for any property you're serious about
✓ Confirmed your FHSS Determination from the ATO (if using FHSS) — before signing any contract
The one mistake that can't be undone: If you're using FHSS, you must request your Determination from the ATO before signing a purchase contract — not after. Sign first and the ATO will reject your FHSS claim entirely, with no appeal process. This single sequencing error trips up more first home buyers than almost anything else on this list.

A Realistic Timeline

For most first home buyers starting from scratch, a reasonable timeline looks something like this: 12-24 months of focused saving and FHSS contributions, 1-3 months for pre-approval and active property searching, then 30-90 days from accepted offer to settlement, depending on your state and whether the property is established or off the plan.

If you're using the Home Guarantee Scheme with a 5% deposit, the saving phase can shrink dramatically — sometimes down to 6-12 months — but you'll want to confirm scheme availability and your eligibility well before you start seriously house hunting, since places are limited each financial year.

Disclaimer: This article is general information only and does not constitute financial, mortgage, or legal advice. Government scheme availability, price caps, and stamp duty thresholds change frequently and vary by state. Always consult a licensed mortgage broker, financial adviser, or your state revenue office before making property purchase decisions.

Sources: ATO (ato.gov.au), Services Australia (servicesaustralia.gov.au)

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