First Home Buyer Finance in Australia: Grants, Schemes, Deposits and How to Fund Your First Purchase in 2026

First home buyer finance in Australia combines a low deposit with government support. The main options are the First Home Guarantee (5% deposit, no LMI), Help to Buy shared equity, the First Home Super Saver Scheme (up to $50,000 released), state First Home Owner Grants for new homes, and stamp duty concessions.

Most first home buyers do not struggle because support is missing. They struggle because it is spread across Housing Australia, the ATO and eight state and territory revenue offices, each with its own rules. Miss one rule and you can lose thousands.

This guide is the money roadmap for your first purchase: which schemes exist, how they fit together, how lenders view your deposit, and what you need on top of it. We have deliberately not repeated the pre-approval steps, borrowing capacity maths or loan type comparisons, because our separate guides on those topics cover them in full.

Key Takeaways

• The First Home Guarantee lets eligible buyers purchase with a 5% deposit and no lenders mortgage insurance (LMI), through participating lenders.
• Help to Buy is a shared equity option: the government contributes up to 40% on new homes or 30% on existing homes.
• The First Home Super Saver Scheme lets you release up to $50,000 of voluntary super contributions towards a deposit.
• First Home Owner Grants and stamp duty concessions are set by each state or territory, so amounts, price caps and cut-off dates differ.
• Most supports can be combined, but Help to Buy and the First Home Guarantee cannot be used on the same purchase.
• The deposit is only part of the bill. Budget separately for duty, conveyancing, inspections, fees and moving costs.

Summary Table: First Home Buyer Support at a Glance

What Makes First Home Buyer Finance Different?

First home buyer finance differs because you borrow more of the price, rely on eligibility-based support and face lenders mortgage insurance (LMI) on small deposits. Lenders see a higher loan-to-value ratio as higher risk. Government schemes exist to offset that risk, but each has rules on who qualifies, what you buy and when you claim.

Three things set your situation apart from an upgrader's.

Smaller deposits. You have no equity in an existing home to draw on. Your deposit comes from savings, super, family or a scheme.

Eligibility-based support. Most help is only available if you have never owned property, will live in the home and stay under a price cap. Upgraders and investors rarely qualify.

LMI. When your deposit is under 20% of the price, lenders usually charge LMI. According to ASIC's Moneysmart (https://moneysmart.gov.au/home-loans/lenders-mortgage-insurance), LMI protects the lender, not you, yet you pay the premium. Avoiding or reducing it is one of the biggest savings available to a first home buyer.

For how lenders assess your income and expenses, see our guides on borrowing capacity and the home loan pre-approval process. Here we stay on funding.

Which Federal Schemes Can First Home Buyers Use?

Three federal schemes help first home buyers: the First Home Guarantee (5% deposit without LMI), Help to Buy (government shared equity) and the First Home Super Saver Scheme (releasing voluntary super contributions). Each solves a different problem, so the right one depends on your deposit, income and whether you are buying new or existing.

The First Home Guarantee (5% deposit)

This sits under the Home Guarantee Scheme run by Housing Australia. According to Housing Australia (https://www.housingaustralia.gov.au/), eligible first home buyers can purchase with a deposit as low as 5%. The government guarantees part of the loan, so the lender treats it much like a loan with a 20% deposit and does not charge LMI.

The 2025 expansion matters. It removed the income caps and lifted the property price caps, so many buyers who were previously excluded can now apply. Price caps still apply and vary by location, so check the current caps for your state and for capital city versus regional areas.

You must apply through a participating lender, and you must live in the property as your home. Not every lender participates, which is one reason a broker or finance team earns its keep here.

Help to Buy (shared equity)

Help to Buy works differently. The government becomes a part-owner of your home. According to Housing Australia, the government's equity contribution can be up to 40% for a new home and up to 30% for an existing home, and the buyer needs a deposit as low as 2%.

Because you borrow less, your repayments are smaller. You do not pay rent on the government's share, and you can buy it out over time. The trade-off is that the government shares in the sale proceeds. The scheme has income and property price caps and a limited number of places, so confirm current settings with Housing Australia before you plan around it.

First Home Super Saver Scheme (FHSSS)

The FHSSS lets you save for a deposit inside your super, where contributions may be taxed more lightly than ordinary savings. According to the ATO (https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/first-home-super-saver-scheme), you can release up to $50,000 of voluntary contributions, with a yearly contribution limit that counts towards that total. You also receive deemed earnings on those contributions.

Two practical points. You must request an FHSSS determination and release from the ATO before you sign a contract to buy. And released amounts are taxed, so speak to an accountant about your own position. If you are a couple, each partner can use the scheme separately.

How Do State Grants and Stamp Duty Concessions Work?

State grants and concessions reduce what you pay at purchase. The First Home Owner Grant is a cash payment, mostly for new homes. Stamp duty (transfer duty) concessions cut or remove the tax on eligible purchases. Amounts, price caps and cut-off dates differ in every state and territory, and governments change them, so always check your state revenue office.

First Home Owner Grant (FHOG)

The FHOG is funded by the states and territories. In most jurisdictions it applies to newly built homes, off-the-plan purchases or owner-builds, not established homes. Some states have offered larger grants for a limited window to encourage construction, and those windows close on set dates.

In practice that means the contract date, the home's price and whether it counts as new all decide your eligibility. In Queensland, for example, check the Queensland Revenue Office (https://qro.qld.gov.au/) for the grant in force on your contract date.

Stamp duty concessions and exemptions

Stamp duty is often the largest single government charge on a purchase. Most states reduce it for first home buyers through a full exemption up to a price threshold, then a sliding concession above it. Some states apply different rules to new homes and vacant land.

The numbers change with state budgets. Use your revenue office's online calculator with the actual price you are considering, and run it at several price points. The difference between buying just under and just over a threshold can be large.

How Do You Build a Deposit Lenders Will Accept?

Lenders accept three main sources for a first home deposit: genuine savings, gifted funds and a family guarantee. Genuine savings carry the most weight because they prove repayment ability. Gifts are usually accepted with a signed letter stating no repayment. Guarantees can replace some deposit but put a family member's property at risk.

Genuine savings. A regular saving history in your own account shows discipline. Lender policy varies on how much must be genuine savings and for how long, so ask before you start moving money around. Rent paid on time and a clean account history help your case too.

Gifted funds. Family can gift part of your deposit. Lenders typically want a gift letter confirming the money is not a loan, and some want the funds in your account well ahead of the application. Gifts are not a substitute for savings with every lender, so check the policy.

Family guarantee. A parent or relative uses equity in their own property to secure part of your loan. This can help you avoid LMI with a small deposit. The risk is real: if you default, the guarantor's home can be called upon. Guarantors should get independent legal advice.

Super. The FHSSS above is the only standard way to use super for a first home deposit. Do not withdraw super outside the scheme without professional advice.

What Upfront Costs Come on Top of the Deposit?

Beyond the deposit, budget for stamp duty (unless exempt), conveyancing, building and pest inspections, LMI if you are not using a guarantee, lender fees, insurance and moving costs. Many first home buyers plan for the deposit and forget these. Set aside a separate buffer, because most of these costs fall due before or at settlement.

Use this table as a planning template. Fill in each line with a real quote for your purchase, not a rule of thumb.

One line first home buyers often miss is strata. If you are buying an apartment, levies are a recurring cost lenders consider when assessing what you can afford.

Can You Stack Schemes, and What Goes Wrong?

Most schemes can be combined, but not all. The First Home Guarantee, the First Home Super Saver Scheme, state grants and stamp duty concessions can generally work together. Help to Buy and the First Home Guarantee cannot be used on the same purchase. Confirm each rule with the administering body before you sign a contract.

Illustrative scenario

This is a hypothetical example, not a quote or a client result. Consider a couple buying a new $650,000 townhouse in a state where a first home buyer exemption applies at that price.

• They have a 5% deposit of $32,500, so the loan is $617,500.
• They use the First Home Guarantee through a participating lender, so no LMI is charged.
• The stamp duty exemption means that line is nil. Their saving equals the full duty the state calculator would show for that price.
• Because the home is new, they check whether a First Home Owner Grant applies on their contract date.
• If either partner used the FHSSS, those released funds would count towards the $32,500.

Without the guarantee, a 5% deposit would normally attract an LMI premium. Without the exemption, they would face a duty bill. Together those two items often decide whether the purchase is possible at all.

Common mistakes

• Missing the price cap. Shopping above the cap for your location can disqualify you from the scheme. Set your search ceiling from the lowest cap you plan to use, not from your maximum loan.
• Ignoring occupancy rules. Schemes and grants require you to live in the home, often within a set time of settlement. Buying as an investment, or renting it out early, can trigger repayment of a grant.
• Signing before the FHSSS release. The release request must be made before you sign the contract.
• Assuming every lender participates. Only participating lenders offer the Home Guarantee Scheme.
• Getting the contract date wrong. Grants and concessions often depend on the contract date, not the settlement date.
• Treating a new home like an established one. The FHOG usually needs a newly built home, and the definition of new is narrow.

Your First Home Finance Checklist

Start by confirming eligibility, then set your price range around the lowest scheme cap you intend to use. Next, build and document your deposit, request any FHSSS release, secure finance with a participating lender and budget for upfront costs. Only then sign a contract. The order matters, because some schemes must be arranged before you commit.

1. Check eligibility for the First Home Guarantee, Help to Buy, the FHSSS, the FHOG and your state's stamp duty concession.
2. Choose one federal pathway. Decide between the First Home Guarantee and Help to Buy, since you cannot use both on one purchase.
3. Set your price ceiling from the lowest cap that applies to you, in your state and location.
4. Start FHSSS contributions early if it suits you, and request the release before signing.
5. Document your deposit. Keep savings history, gift letters and any guarantee paperwork ready.
6. Get pre-approval from a lender that participates in your chosen scheme (see our home loan pre-approval process guide).
7. Build a full upfront cost budget using the table above, with real quotes.
8. Run the duty calculator for each property before you make an offer.
9. Confirm the contract date against grant and concession cut-offs.
10. Keep a cash buffer after settlement for repairs and rate changes.

Book a free first home buyer finance consultation with the George & Sons finance team to confirm which schemes you qualify for and map out your deposit. Once you are pre-approved, speak with our buyers advocacy team about finding and negotiating the right property within your caps.

Our View: Let the Scheme Set Your Budget, Not Stretch It

Here is a position we hold firmly. A 5% deposit scheme is a tool for getting into the market sooner. It is not a target you should aim to hit. Buyers who treat the scheme as permission to borrow the maximum often end up with a thin buffer and repayments that leave no room for a rate rise or a leaking hot water system.

The finance team at George & Sons asks every first home buyer the same question first: what repayment can you hold comfortably for years, not just on approval day? From there we work backwards to a price, and check it against the price caps and duty thresholds. That order, caps and comfort first, then the property, avoids most of the mistakes listed above.

The second thing we see undervalued is knowing what you are buying into. In January 2021 we sold the first apartment in a Beenleigh complex for a developer who was openly sceptical about whether an agency of our size could add much. Five years on, we have sold 12 apartments there. We did it by knowing everything about the complex and its body corporate, walking each purchaser through the building, and taking a genuine interest in what they needed.

That approach matters directly to your finance. Strata levies, sinking fund balances and body corporate records affect your running costs and how a lender views the purchase. A first home buyer who has read the strata report before making an offer is making a funded decision, not a hopeful one.

This is also why we offer finance, buyers advocacy and sales under one roof. The person structuring your loan, the person negotiating the purchase and the person who knows the local market can share the same facts. That means fewer surprises between pre-approval and settlement.

References

• Housing Australia, Home Guarantee Scheme and Help to Buy
• Australian Taxation Office, First Home Super Saver Scheme
• ASIC Moneysmart, Lenders mortgage insurance
• Queensland Revenue Office, Transfer duty and First Home Owner Grant information