Buying your first home in Australia is one of the most significant financial decisions you will ever make. The process involves understanding your borrowing capacity, saving a deposit, accessing government support, and navigating lender requirements — all while keeping one eye on a competitive property market. This guide walks you through every stage, with practical, Australian-specific information to help you move forward with confidence.
Understanding Your Financial Position
Before approaching a lender, you need an honest picture of your finances. Lenders assess your gross income, living expenses, existing debts — including HECS-HELP, credit cards, personal loans and buy-now-pay-later balances — and your savings history. A key benchmark used by most Australian lenders is the Household Expenditure Measure (HEM), a minimum living expense figure calculated by the Australian Bureau of Statistics. If your declared monthly expenses fall below HEM, lenders will substitute the HEM figure, which can reduce your borrowing capacity.
Your credit score also matters. Australia has three main credit reporting bodies — Equifax, Experian and Illion — and each generates a score based on your credit history, enquiries, defaults and repayment behaviour. You can access your score for free from each bureau. A score above 700 with no defaults is generally considered strong for home loan applications.
HECS-HELP Reduces Borrowing Power
A $50,000 HECS-HELP balance can reduce your borrowing capacity by $75,000–$100,000, even though repayments are income-contingent. Lenders treat the repayment obligation as a regular liability. Factor this into your planning from the start.
- ✓Gross and net income (all sources)
- ✓Current HECS-HELP balance
- ✓All debts: credit cards, personal loans, car finance, BNPL
- ✓Three to six months of bank statements
- ✓Credit score from Equifax, Experian or Illion (free)
Deposit Requirements and Options in Australia
The standard deposit target in Australia is 20% of the property purchase price, which allows you to avoid Lenders Mortgage Insurance (LMI). However, the majority of first home buyers purchase with less. The First Home Guarantee (administered by Housing Australia) allows eligible buyers to purchase with just 5% deposit — the federal government guarantees the remaining 15% of the loan, eliminating the LMI requirement entirely. The Family Home Guarantee extends this to eligible single parents from 2% deposit.
Beyond the deposit itself, budget for upfront purchase costs: stamp duty or transfer duty (unless you qualify for a first home buyer concession or exemption), conveyancing fees ($1,500–$3,000), building and pest inspection ($400–$800), and lender application fees. In NSW, a first home buyer purchasing a new property at $900,000 could face over $25,000 in purchase costs on top of their deposit — planning for these is critical.
The First Home Super Saver Scheme (FHSS)
The FHSS allows you to make voluntary contributions to your superannuation fund and later withdraw up to $50,000 per person ($100,000 per couple) to put toward your deposit. Because super contributions are taxed at 15% rather than your marginal rate, you save faster. Speak with a financial adviser before contributing.
Government Schemes Available to First Home Buyers in 2026
Australia's first home buyer support landscape includes federal and state-based schemes that, when combined strategically, can significantly reduce upfront costs. The First Home Guarantee (35,000 places per year) and Regional First Home Buyer Guarantee allow eligible buyers to purchase with 5% deposit and no LMI. The First Home Owner Grant (FHOG) provides a one-off cash grant for eligible buyers of new homes — $10,000 in NSW and WA, $30,000 in QLD (until June 2026), $15,000 in SA, and $30,000 in TAS. The ACT has replaced the FHOG with stamp duty concessions.
Stamp duty concessions for first home buyers vary significantly by state. In NSW, new and existing homes up to $800,000 attract no stamp duty; in VIC, the threshold for full exemption is $600,000 (for new homes). Understanding which concessions apply to your situation — new vs established home, your state, the purchase price — can save tens of thousands of dollars.
| State/Territory | FHOG Amount | Stamp Duty Exemption Threshold | Notes |
|---|---|---|---|
| NSW | $10,000 | $800,000 (new & existing) | Concessions to $1,000,000 |
| VIC | $10,000 (regional) | $600,000 (new homes) | Concessions to $750,000 |
| QLD | $30,000 (until Jun 2026) | $700,000 | First Home Concession applies |
| WA | $10,000 | $430,000 | Concessions to $530,000 |
| SA | $15,000 | No exemption | FHOG only |
| TAS | $30,000 | Concessions available | Check current thresholds |
| ACT | No FHOG | Stamp duty abolished | Home Buyer Concession Scheme |
| NT | $10,000 | Concessions available | Check current thresholds |
Frequently Asked Questions
About the Author
Sakib Manzoor
Senior Finance Wellness Expert
Sakib Manzoor is the founder of Secure Finance and brings extensive experience in Australian mortgage broking and financial wellness. Specialising in helping clients achieve their property finance goals through personalised strategies and expert guidance, Sakib is FBAA accredited and committed to providing clear, actionable advice. All content is written to meet Australian regulatory standards and is regularly updated to reflect current market conditions.