What Are the First Home Buyer Resources You Need?

Banks don't make it obvious where to start, and most first home buyers waste weeks sorting through generic advice that doesn't apply to their situation.

The resources you need depend on your deposit size, where you're buying, and whether you're considering a new build or an established property. Getting clarity on those three factors upfront lets you cut through the noise and focus on the schemes, concessions, and loan structures that actually matter for you.

Understanding the Australian Government 5% Deposit Scheme

The Australian Government 5% Deposit Scheme lets eligible buyers purchase with a 5% deposit without paying lenders mortgage insurance. Housing Australia guarantees the difference between your deposit and 20% of the property value, and there are no income caps or annual place limits. Applications go through a panel of 31 participating lenders, not directly through Housing Australia.

Property price caps vary by location. In Sydney, the cap is $1,500,000. Melbourne sits at $950,000, and Brisbane is $1,000,000. Regional caps also increased from October last year, so if you're buying outside a capital city, check the current threshold for your area.

Consider a buyer purchasing in Kogarah with savings of $50,000. At a 5% deposit under the scheme, they can access properties up to $1,000,000 without needing to find an additional $150,000 to reach 20%. That $50,000 covers the deposit, with funds left for settlement costs. The alternative would be a 10% deposit with lenders mortgage insurance, which typically adds several thousand dollars to the upfront cost. The scheme removes that expense entirely and broadens the range of properties within reach.

The scheme works alongside state-based stamp duty concessions. In New South Wales, buyers benefit from full transfer duty exemption on properties up to $800,000 and a sliding concession up to $1,000,000. Combining the federal deposit scheme with the NSW stamp duty concession can reduce upfront costs by tens of thousands of dollars compared to a conventional loan structure.

First Home Buyer Grants Across States and Territories

Grants are available for buyers of new homes, not established properties, in most jurisdictions. The amounts and eligibility criteria differ depending on where you're buying.

In New South Wales, the First Home Owner Grant is $10,000 for new builds or substantially renovated homes, with a purchase cap of $600,000 or a combined land and build cap of $750,000. Victoria and Western Australia also offer $10,000 grants for new homes, with Victoria capping eligibility at $750,000 and Western Australia at $750,000 south of the 26th parallel.

Queensland reduced its grant from $30,000 to $15,000 for contracts signed from 1 July this year. South Australia offers $15,000 with no property price cap for eligible contracts entered into after June last year. Tasmania increased its grant to $20,000 for new homes from 1 July, subject to assent. The Northern Territory offers a $50,000 HomeGrown Territory Grant for new homes, the highest in the country, available until September next year.

If you're planning a house and land package or a new apartment, the grant reduces the cash you need at settlement. For buyers stretching to meet deposit requirements, that $10,000 to $50,000 can mean the difference between going ahead now or waiting another year to save.

Stamp Duty Concessions and When They Apply

Stamp duty concessions apply differently depending on whether you're buying new or established and which state or territory you're in. The concessions can save you more than the grants in many cases, particularly in higher-value markets.

In New South Wales, full transfer duty exemption applies to properties up to $800,000, with a sliding concession up to $1,000,000. South Australia removed the price cap entirely for new homes and vacant land from May last year, meaning no transfer duty applies regardless of the property value. Queensland offers nil transfer duty up to $700,000 on established homes, with a concession extending to $800,000, and full concessions on new builds with no price cap from May last year.

Victoria provides full stamp duty exemption on properties up to $600,000, with a concession phasing out at $750,000. The Australian Capital Territory removed both the property value limit and the income threshold from 1 July this year, meaning eligible buyers now pay no conveyance duty regardless of the property price or their household income.

In a scenario where a buyer is purchasing an established home in Kogarah at $850,000, the NSW concession reduces stamp duty to around $9,490 instead of the standard $33,990. That $24,500 saving doesn't need to come out of savings or be added to the loan. The same property bought without the concession would either require a significantly larger deposit or push the buyer into a higher loan-to-value ratio, increasing costs elsewhere.

Low Deposit Options and How Lenders Mortgage Insurance Works

Buying with less than 20% deposit typically triggers lenders mortgage insurance unless you're using a government guarantee scheme. LMI protects the lender if you default, and the cost increases as your deposit decreases. On a property purchased at the current Kogarah median, LMI for a 10% deposit loan can add $8,000 to $12,000 to your upfront costs, depending on the lender and the size of the loan.

The Australian Government 5% Deposit Scheme removes LMI entirely, but it's not the only low deposit option. Some lenders offer guarantor loans, where a parent or close relative uses equity in their own property to support your application. The guarantor's property acts as additional security, allowing you to borrow more than 80% of the property value without paying LMI. The guarantor isn't responsible for your repayments, but their property is at risk if you default.

Another option is a gift deposit. Some lenders accept funds gifted by a parent or family member as part or all of your deposit, provided the gift is documented with a statutory declaration confirming it's not a loan. The amount that can be gifted and whether it counts as genuine savings depends on the lender's policy. In our experience, buyers who combine a small amount of their own savings with a gifted deposit often qualify for better loan terms than those relying entirely on LMI.

Fixed Versus Variable Interest Rates for First Home Buyers

Your interest rate structure affects repayments, flexibility, and long-term cost. A variable interest rate moves with the market, meaning your repayments can increase or decrease over time. Most variable loans include an offset account, which lets you park savings in a linked transaction account to reduce the interest charged on your loan balance. If you have $20,000 sitting in an offset account and owe $500,000, you only pay interest on $480,000.

A fixed interest rate locks in your repayment amount for a set period, typically one to five years. The rate won't change during that time, which provides certainty if you're on a tight budget. However, fixed loans usually don't include offset accounts, and breaking the loan early can trigger significant costs. If you decide to sell or refinance before the fixed term ends, you may owe thousands in break fees, particularly if rates have dropped since you fixed.

Some buyers split their loan, fixing part and leaving the rest variable. This approach provides partial protection against rate rises while keeping access to features like offset and redraw. Redraw lets you access extra repayments you've made above the minimum, though some lenders restrict how often you can redraw or charge fees for it. Fixed rate expiry is worth considering before you lock in, particularly if your circumstances might change in the next few years.

Building Your First Home Buyer Budget With Upfront and Ongoing Costs

Your budget needs to account for more than the deposit. Settlement costs include legal fees, building and pest inspections, loan application fees, and potentially lenders mortgage insurance if you're not using a government guarantee. Buyers also need to budget for council rates, strata fees if purchasing an apartment, insurance, and ongoing maintenance once they move in.

Most lenders require evidence of genuine savings, meaning funds held in your account for at least three months. The amount varies by lender, but it's typically 5% of the property value. Gifted deposits and first home saver accounts can contribute to this figure, but they're treated differently depending on the lender's policy.

Consider a buyer with $60,000 saved purchasing at Kogarah's current median under the 5% deposit scheme. The deposit takes $50,000 (assuming a property value around $1,000,000). Legal and inspection costs add another $3,000 to $4,000. Loan establishment fees vary but typically sit between $600 and $1,200. That leaves a buffer of around $5,000 for unexpected costs at settlement. If that same buyer were purchasing with a 10% deposit outside the government scheme, they would need closer to $115,000 to $120,000 to cover the deposit, LMI, and settlement costs.

Ongoing costs also matter. A $500,000 loan at current variable rates costs roughly $3,000 to $3,300 per month in repayments. Add $200 to $300 per month for strata fees if buying an apartment, another $150 to $200 for council rates, and insurance at around $80 to $120 per month. Buyers stretching their deposit to the limit sometimes overlook these recurring expenses, which can add $500 to $600 per month on top of the loan repayment.

Getting Pre-Approval and Applying for a Home Loan

Pre-approval tells you how much you can borrow before you start looking at properties. It's not a guarantee, but it gives you a clear budget and shows sellers you're in a position to proceed. Most lenders assess your income, expenses, existing debts, and credit history to determine your borrowing capacity.

The process involves submitting payslips, tax returns, bank statements, and proof of savings. Lenders also check your credit file, so any defaults, late payments, or multiple credit applications in a short period can affect your outcome. Pre-approval typically lasts three to six months, depending on the lender.

Once you've found a property and signed the contract, you move to formal approval. The lender orders a valuation to confirm the property is worth what you're paying. If the valuation comes in lower than the purchase price, you may need to increase your deposit or renegotiate with the seller. In our experience, this happens more often with off-the-plan purchases or properties in areas where recent sales data is limited.

Banks often push their own products without comparing what's available across the market. A broker working in your interest will assess multiple lenders, compare interest rate discounts, offset features, and fees, and structure the home loan application to match your circumstances. That might mean using a lender with better policy for gifted deposits, or one that doesn't penalise buyers with irregular income patterns.

Buying your first home involves more moving parts than most people expect, but the right resources put you in control of the process rather than reacting to it. Call one of our team or book an appointment at a time that works for you.

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