First Home Buyer · Free Guide · Clear Path Home Loan

Your First Home, Done Right.

Most first home buyers start by looking at properties. That's backwards. Here's what you actually need to understand first — before you speak to anyone.

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Last reviewed: April 2026

Quick Answer

How much deposit do I really need to buy my first home in Australia?

You can buy your first home in Australia with as little as a 5% deposit under the First Home Guarantee — no LMI required. A 20% deposit avoids LMI altogether; below 20% LMI typically adds $5,000–$30,000 to your loan. Borrowing capacity is usually 5–6× gross household income, but every lender calculates it differently. Get pre-approval before inspecting properties — it defines your real budget and makes you credible to sellers. Budget $20K–$40K extra for stamp duty, conveyancing and inspection costs.

5% minimum deposit via First Home Guarantee (income caps: $125K single / $200K couple)
20% deposit avoids LMI entirely
Pre-approval before property search — not after
Budget $20K–$40K extra for stamp duty, conveyancing, inspections

Minimum deposit via First Home Guarantee — no LMI required

$10K

First Home Owner Grant in NSW for new homes up to $600K

72hrs

Typical time to get conditional pre-approval with good preparation

Your deposit — and where it comes from

Lenders look at where your deposit came from, not just the amount. A genuine savings history — regular deposits over 3–6 months — is essential. A lump sum gift alone won't satisfy most lenders.

Lenders Mortgage Insurance (LMI) — what it actually is

LMI protects the lender, not you, if you can't repay the loan. It applies when your deposit is below 20%. It can cost $5,000–$30,000 and is usually added to your loan balance rather than paid upfront.

The First Home Guarantee Scheme

The government guarantees up to 15% of your loan so you only need a 5% deposit without paying LMI. Income caps apply — singles under $125,000, couples under $200,000. Limited places are available each financial year.

Borrowing capacity — the real number

Lenders assess your income, expenses, existing debts, credit cards and dependants. The 5–6× income rule is a rough guide only. Use our free calculator on the homepage to get a personalised estimate.

Pre-approval — why it matters

Pre-approval means a lender has conditionally agreed to lend you a specific amount. It doesn't guarantee final approval but it tells you your budget, makes you credible to sellers, and lets you move fast when you find the right property.

Stamp duty and other upfront costs

Beyond the deposit, factor in stamp duty (varies by state and property value), conveyancing fees ($1,500–$3,000), building and pest inspection ($500–$800), and loan application fees. In NSW, first home buyers are exempt from stamp duty on homes up to $800,000.

Common mistakes

What people get wrong

❌

Looking at properties before sorting finance

Most buyers fall in love with a property before knowing their real budget. Get pre-approval first — it tells you your actual limit and makes you a credible buyer the moment you find the right place.

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Not checking First Home Guarantee eligibility

Many buyers assume they won't qualify. Income caps are $125,000 for singles and $200,000 for couples — covering the majority of working Australians. Many miss out simply by not checking.

❌

Ignoring credit card limits

Every $10,000 of credit card limit reduces your borrowing capacity by $40,000–$50,000 — even if you never use the card. Cancel unused cards at least 3 months before applying.

❌

Saving the exact 20% and no more

Many buyers save exactly 20% and forget stamp duty, conveyancing, inspection fees, and moving costs. Budget for an additional $20,000–$40,000 on top of your deposit for a typical Sydney purchase.

💡 The most important thing to know

Get your borrowing capacity clear before you start looking at properties. Use our free calculator on the homepage to get an instant estimate — no credit check, no commitment required.

Common questions

Frequently asked questions

A minimum of 5% is possible under the First Home Guarantee. 10–20% gives you more lender choice. 20% avoids LMI entirely. Your ideal deposit depends on your situation and how long it would take to save more versus what property prices might do in that time.

A formal pre-approval application does leave a small mark on your credit file. However, talking to us and a specialist before any formal application won't affect your score at all. We always advise before anything is submitted.

The First Home Owner Grant (FHOG) is a state government cash grant for eligible first home buyers purchasing or building a new home. In NSW it's $10,000 for new homes up to $600,000. It's separate from the First Home Guarantee and can be used alongside it.

Yes — through the First Home Super Saver Scheme (FHSS), eligible first home buyers can withdraw voluntary super contributions made after 1 July 2017. Up to $50,000 in total contributions can be withdrawn. This is worth exploring if you've been making voluntary super contributions.

Once formally approved, settlement typically occurs 4–6 weeks later. The full process from first speaking to a specialist to settlement usually takes 6–12 weeks depending on property and lender. Having your documents ready is the single biggest factor in speed.

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Everything above is general information. When you’re ready to act on your situation, a vetted home loan specialist comparing 30–60 lenders will model your exact numbers — free to you, no cost and no obligation.

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