For many first home buyers, the biggest hurdle is not knowing where to start. The truth is, there are three main ways to buy your first home:
Saving up a deposit the traditional way.
Building new and using government grants.
Getting help from parents as guarantors.
Each option comes with benefits and trade-offs. Let’s walk through them so you can decide which one fits your situation best.
💡 Tip: If you’re not sure which path to take, a mortgage broker in Coffs Harbour can guide you through your options, explain what you qualify for, and help you compare lenders side by side.
Option 1 – Saving Your Deposit (The Traditional Way)
Most first-home buyers start by saving. The size of your deposit determines how much risk banks take on, and therefore how competitive your loan will be:
| Deposit Size | What It Means | LMI (Lenders Mortgage Insurance) |
|---|---|---|
| 5% | Possible with some lenders | High LMI costs apply |
| 10% | More lender choice | Smaller LMI fee |
| 20% | The sweet spot | No LMI, lowest rates, best features |
Lifestyle & Challenges
You’ll need a strong savings habit, often cutting back on travel or luxuries.
It can take years, especially in capital cities.
But reaching 20% deposit puts you in the best position long-term.
👉 If you’re in education, certain lenders may offer special lending policies that make it easier to get approved. See our guide to home loans for teachers for more.
Option 2 – Building with Government Support
Building a new home can unlock grants and concessions, helping you buy sooner.
What You Can Access
First Home Owner Grant (FHOG): Up to $10,000 (varies by state).
Stamp Duty Concessions: Savings worth thousands.
Extra Boosts: In some states, low-deposit schemes or shared equity funds.
Lifestyle & Considerations
You’ll likely rent while your home is being built.
Grants only apply to new builds or brand-new homes.
Construction timelines can blow out, so patience is key.
Pros:
Government chips in with free money.
You design a brand-new home.
Energy-efficient homes = lower running costs.
Cons:
Still need a deposit (though smaller thanks to grants).
Must juggle rent + loan interest during the build.
Location may be in outer suburbs where new land is available.
Option 3 – Using Family Support (Guarantor Loans)
arents can use their home’s equity as security for your loan — allowing you to buy with little or no deposit.
Why It’s Popular
Zero deposit needed.
Avoid paying LMI (saving $5k–$12k upfront).
Access banks’ sharpest rates.
Lifestyle & Considerations
Most buyers using this method are young families or professionals wanting to “get in now” rather than wait.
Parents remain legally tied to the loan — if you fall behind, the bank may turn to them.
Works best if your parents have a property with strong equity and low debt.
Pros:
Get into the market years earlier.
Potential to consolidate personal debt into one lower-rate mortgage.
Access competitive loan products usually reserved for low-risk borrowers.
Cons:
Family risk if repayments aren’t made.
Some lenders limit this to certain property types/locations.
First Home Buyer Schemes Across Australia (2025 Guide)
Buying your first home in Australia is a huge milestone — and each state or territory has unique support programs to make it easier. Below, you’ll find updated 2025 figures for grants, concessions, and exemptions — plus tips on how to make the most of them.
First Home Buyers in the ACT
The ACT doesn’t have the old First Home Owner Grant anymore, but the Home Buyer Concession Scheme (HBCS) is very generous.
Concession: Up to $40,000 off stamp duty on eligible properties.
Eligibility: Applies to vacant land, new builds, and established homes. Income thresholds apply, but they’re higher than in previous years, meaning more buyers qualify.
First Home Buyers in New South Wales
NSW remains one of the best states for upfront savings.
Stamp duty exemption: No duty for homes under $850,000 (saving up to $27,000).
Stamp duty concession: Discounted duty on homes priced $850,000 – $1,050,000.
First Home Owner Grant: $15,000 for new builds/off-the-plan homes (existing homes don’t qualify).
First Home Buyers in the Northern Territory
NT leads the way with massive grants for new builds.
Stamp duty: House & Land Package Exemption (HLPE) wipes out duty on eligible builds until 2027.
First Home Owner Grant:
$60,000 if you build or buy a new home
$15,000 for existing homes
First Home Buyers in Queensland
Queensland’s benefits have recently been expanded.
Stamp duty exemption: Full exemption for homes valued under $750,000 (worth up to $28,750 in savings).
Stamp duty concession: Reduced duty for homes up to $850,000.
First Home Owner Grant: Up to $35,000 for new builds valued under $800,000.
First Home Buyers in South Australia
South Australia combines both grants and concessions.
Stamp duty:
Full exemption up to $700,000
Partial concession up to $750,000
First Home Owner Grant: $20,000 if you buy or build a new home under $750,000.
First Home Buyers in Tasmania
Tasmania offers some of the highest stamp duty relief in the country.
Stamp duty: No duty on homes up to $800,000, saving as much as $32,000. Available until 2026.
First Home Owner Grant: $12,500 for new homes or builds.
First Home Buyers in Victoria
Victoria has multiple incentives for first-home buyers.
Stamp duty:
No duty if home is valued up to $650,000 (saves up to $33,000).
Concessions for homes up to $800,000.
First Home Owner Grant: $12,500 for new builds under $750,000.
Homebuyer Fund: Government can contribute up to 30% of the property purchase (ending June 2025).
First Home Buyers in Western Australia
WA’s grant and concessions remain strong for 2025.
Stamp duty:
No duty for homes under $500,000
Discounted rates up to $650,000
First Home Owner Grant: $15,000 for new builds or newly built homes.
National Schemes
On top of state-based incentives, the federal government offers national schemes:
Home Guarantee Scheme (HGS): Buy with as little as 2% – 5% deposit, no LMI.
First Home Super Saver Scheme: Save inside super and withdraw up to $60,000 ($120,000 for couples).
Parental/Guarantor Support: Many first-home buyers use a parent’s equity to avoid LMI and access the best rates.
First-Home Buyer FAQs (Australia, 2025)
The three common paths are:
- Save a deposit (traditional): 5–20% deposit, with 20%+ avoiding Lenders Mortgage Insurance (LMI).
- Build new with government support: Access the First Home Owner Grant (FHOG) and stamp duty concessions on new builds.
- Use family support (guarantor loan): Parents use their home’s equity so you can buy with little/no deposit and avoid LMI.
Deposit size directly affects lender choice and LMI costs:
- 5% – possible with some lenders or federal schemes, but high LMI.
- 10% – more lender options, smaller LMI.
- 20% – best rates, widest choice, and no LMI.
- FHOG: Up to $35,000 depending on state.
- Stamp duty concessions: Waivers or discounts worth thousands.
- Shared equity or low-deposit schemes: Available in some states, plus federal Home Guarantee (2–5% deposits, no LMI).
A guarantor (usually parents) offers part of their home’s equity as loan security, letting you buy with no/low deposit and avoid LMI.
Risks: If you miss repayments, the guarantor is responsible for the guaranteed portion of the debt until the guarantee is released.
- ACT: Home Buyer Concession Scheme – up to $40k off duty.
- NSW: No duty under $850k; concessions up to $1.05m; FHOG $15k (new only).
- NT: FHOG $60k (new) or $15k (existing); HLPE stamp duty relief.
- QLD: No duty up to $750k; FHOG up to $35k (new builds ≤$800k).
- SA: No duty up to $700k; FHOG $20k (new builds ≤$750k).
- TAS: No duty up to $800k (until 2026); FHOG $12.5k (new).
- VIC: No duty up to $650k; concessions to $800k; FHOG $12.5k; Homebuyer Fund (ends June 2025).
- WA: No duty up to $500k; FHOG $15k (new).
Yes, many buyers combine a state FHOG or stamp duty concession with the federal Home Guarantee Scheme. Always check eligibility and property caps before committing.
Most builds take 6–12 months. You’ll likely pay rent plus interest-only on progressive drawdowns. Budget an extra 5–10% for possible delays or variations.
- Proof of ID and residency/citizenship.
- Evidence of genuine savings (3–6 months).
- Income and liability documents.
- Declaration that you haven’t previously owned property.
The federal scheme allows eligible buyers to purchase with just 2–5% deposit and no LMI. Programs include the First Home Guarantee, Regional First Home Buyer Guarantee, and Family Home Guarantee (for single parents).
You can contribute extra money into your super fund, then withdraw up to $60k (or $120k for couples) for your first-home deposit. It offers tax advantages but has strict rules—speak to an accountant first.
- Signing contracts before pre-approval.
- Forgetting about stamp duty, legal and inspection costs.
- Not stress-testing repayments at higher interest rates.
- Overlooking body corporate or contract fine print.
Yes. Options include the federal Home Guarantee Scheme (2–5% deposits), guarantor loans, or building new to access grants. Some lenders also treat consistent rent as “genuine savings.”
Edited in August 2025
