First-Home Buyer Guide Australia 2026
How to Buy Your First Home in 2026 with a Smaller Deposit
February is a common time for new buyers to start planning after the summer break. If you’re thinking about buying your first home this year, this article is written in straightforward English to help you understand what grants and schemes are available, how much deposit you really need, and the step-by-step process to secure your first mortgage.
“First-Home Buyer Grants and Schemes Available in 2026”
Australia has a range of government support programs designed to help first-time buyers enter the housing market sooner. These incentives can make a real difference to how much you need to save and how quickly you can settle into your first home.
1. Federal Government Home Guarantee Scheme (5% Deposit)
One of the biggest changes for 2026 is the expanded Home Guarantee Scheme. This allows eligible first-home buyers to purchase a home with as little as 5% deposit and no Lenders Mortgage Insurance (LMI) – a cost that can otherwise be thousands of dollars. The government guarantees the remaining 15%, so lenders see less risk.
From 1 October 2025 onwards, this scheme has:
No income caps – available to most first-home buyers
No limits on places – unlimited spots
Property price caps that vary by state and city (e.g., up to ~$1.5M in Sydney, ~950K in Melbourne).
This is real support that lets buyers get into the market with a much smaller deposit and avoid high mortgage insurance costs.
2. First Home Super Saver Scheme (FHSSS)
The FHSSS lets you save for your deposit inside your super, where contributions are taxed more favourably. You can then withdraw these savings (plus applicable earnings) to put towards your first home deposit, giving you tax savings and a faster way to save.
3. Shared Equity – Help to Buy Scheme
Under the Help to Buy shared equity scheme, the Australian Government may contribute up to 30% of an existing home or 40% of a newly built home, provided you save at least a 2% deposit. This reduces the size of the loan you need, but the government shares in any gain or loss on your home’s value.
4. State-Based Grants and Concessions
Many states offer additional incentives, such as:
First Home Owner Grant (FHOG) of up to $10,000 for new homes
Stamp duty exemptions or concessions for eligible buyers
These vary by state and property type. Always check your specific state revenue office for the latest details.
“How Much Deposit Do You Really Need in Australia?”
There’s a common misconception that you must save 20% of the property price before buying. In today’s market, that isn’t always the case.
Minimum Deposit Options:
5% with the Home Guarantee Scheme (no LMI) – a popular pathway.
2% with Help to Buy if eligible.
For traditional loans without government support, lenders may offer loans with 10-15% deposit, but usually with LMI.
Real world example:
On a $700,000 property:
5% deposit = $35,000
Stamp duty, legal fees, inspections and other costs = typically a few thousand dollars more
A good rule of thumb is to aim to save more than the minimum (e.g., 7-10%) so you have a cash buffer and cover upfront costs.
Time to save a deposit:
Research has shown that saving a traditional 20% deposit can take several years in major cities – for example, in some cases over 4–6 years for couples aged 25–34. That’s why the government’s low deposit schemes are so valuable – they help you get into the market sooner.
“Step-by-Step Guide to Getting Your First Mortgage”
Buying your first home can feel overwhelming. Below is a simple roadmap to help you understand the process.
1. Work Out Your Budget and Savings
Before anything else, review your finances:
How much can you save each month?
Do you have enough for the minimum deposit + other costs (legal, inspection, stamp duty)?
Include a buffer for unexpected expenses.
This is where a trusted mortgage broker can help you plan realistically based on your personal situation.
2. Check Government Schemes You Qualify For
Find out which incentives you’re eligible for. A mortgage broker like ASK Financials can check all current schemes, including:
Home Guarantee Scheme (5% deposit)
FHSSS
Help to Buy shared equity
State grants and exemptions.
You can stack government support where eligible – meaning you could claim more than one incentive to reduce costs.
3. Get Pre-Approval
Once you know your budget and the schemes you may use, talk to a broker about pre-approval. Pre-approval gives you a conditional indication from a lender on how much you can borrow. It strengthens your position when making offers on a property.
After observing a rise in the number of applicants for buying their very first home, many lenders doing pre-approvals for the 5% depositing system are no longer offering these services - at least while supply lasts. This situation demonstrates how critical it is to plan your first home purchase early and get excellent advice before making any decisions about purchasing your first home!
4. Find Your Property
With pre-approval in hand, start house hunting. Consider:
Location and lifestyle needs
Property type and long-term value
Future growth potential
It’s often worth seeing multiple properties before choosing.
5. Approval and Settlement
After lender approval, the loan moves to settlement. Your broker keeps you updated at every stage, and once settlement occurs, you get the keys and become a homeowner.
What First-Home Buyers Should Keep in Mind
Start planning early: February is a great time to set goals after summer.
Save more than the minimum: Cash buffers protect you from stress later.
Seek expert advice: Mortgage brokers help navigate complex choices and paperwork.
Stay informed: Government schemes change over time – a broker can keep you updated.
If you’re thinking about buying your first home, the team atASK Financials – Australia’s trusted mortgage experts can guide you from planning to settlement. You can also book a free consultation with us to understand your next steps. Follow us on LinkedIn and Instagram.
