Step 1 of 6
Where to start: your deposit, your budget and your buying team
Work out what you can actually spend, what the government schemes change, and who you need on your side before you look at a single listing.
9 min read · Written for Australian first home buyers
Almost every first home buyer starts in the wrong place. They open a listings app, fall for a place, then work backwards to see whether they can afford it. That order costs you money, because you end up negotiating for a home you have already decided you want.
Do it the other way around. Fix your number first, get the finance lined up, assemble the small team you need, and only then start looking. This page covers those three things.
Work out your real number
Your budget is not what a bank will lend you. It is the smaller of what a bank will lend you and what you can repay when rates are higher than they are today. Lenders test your application at a buffer above the actual rate for exactly this reason. Apply the same test to yourself.
Three numbers matter, in this order:
- Your deposit, meaning cash you can actually transfer, not equity in a car or money your parents might lend.
- Your borrowing power, which a broker or lender will calculate from income, debts, dependants and living costs.
- Your upfront costs, which sit outside the deposit and surprise almost everybody the first time.
The costs that sit outside the deposit
Budget for these separately. If you spend your whole cash pile on the deposit you will be short at settlement.
| Cost | Rough range | Notes |
|---|---|---|
| Stamp duty | $0 to tens of thousands | Often nil for first home buyers under the state threshold |
| Conveyancer or solicitor | $1,200 - $2,500 | Higher for strata, off-the-plan or complex titles |
| Building and pest inspection | $400 - $900 | Per property inspected, not per purchase |
| Strata report | $200 - $400 | Apartments and townhouses only |
| Lenders mortgage insurance | 1% - 5% of the loan | Waived under the First Home Guarantee |
| Loan and registration fees | $500 - $1,500 | Application, valuation and title registration |
| Moving and immediate repairs | $1,000 - $5,000 | The one everyone forgets |
Ranges are indicative and vary by state, lender and property. Get quotes rather than relying on the middle of a range.
Five per cent or twenty per cent
The traditional answer is twenty per cent, because that avoids lenders mortgage insurance. The practical answer for most first home buyers in 2026 is five per cent, because the First Home Guarantee waives that insurance for eligible buyers.
The scheme changed materially on 1 October 2025. Income caps were removed, the annual limit on places was scrapped, and the property price caps were lifted. Eligibility now extends to people who have not owned Australian property in the past ten years, and to joint applications between friends or siblings rather than couples only.
Property price caps under the guarantee
The guarantee only applies below these caps. The first figure covers capital cities and large regional centres, the second covers the rest of the state.
| State or territory | Capital and large regional | Rest of state |
|---|---|---|
| New South Wales | $900,000 | $750,000 |
| Victoria | $800,000 | $650,000 |
| Queensland | $700,000 | $550,000 |
| Western Australia | $600,000 | $450,000 |
| South Australia | $600,000 | $450,000 |
| Tasmania | $600,000 | $450,000 |
| Australian Capital Territory | $750,000 | |
| Northern Territory | $600,000 | |
Caps are current as at August 2026. Housing Australia publishes a postcode tool, and your lender confirms the cap that applies to a specific address.
The other schemes worth checking
- First Home Owner Grant - a cash grant in most states, usually restricted to new builds
- First Home Super Saver - lets you withdraw voluntary super contributions for a deposit
- State stamp duty concessions - often the largest single saving available to you
- Shared equity schemes - the government takes a stake in exchange for a smaller loan
Stamp duty for first home buyers, by state
| State | Full exemption up to | Concession up to |
|---|---|---|
| New South Wales | $800,000 | $1,000,000 |
| Victoria | $600,000 | $750,000 |
| Queensland | $700,000 | $800,000 |
| Western Australia (Perth and Peel) | $500,000 | $700,000 |
| South Australia | New homes: no duty, no price limit | |
These are the headline settings as at August 2026 and they change with state budgets. Confirm with your state revenue office before you commit to a price bracket, because crossing a threshold by a few thousand dollars can cost you far more than the difference.
Your buying team
Buying a home in Australia takes four roles. Three of them are straightforward to hire. The fourth is the one most first home buyers skip, and it is the one that is genuinely on your side.
- A mortgage broker or lender arranges the money. A broker compares lenders for you; a bank sells you its own products.
- A conveyancer or solicitor handles the legal transfer. Engage one before you make an offer, not after.
- A building and pest inspector checks the physical condition. You pay for this per property.
- Someone advising you on price and negotiation. The seller has a licensed agent working for them. By default you have nobody doing that job for you.
The selling agent is friendly, helpful, and legally acting for the seller. That is not a criticism, it is their job. It just means the only person in the room reading the contract in your interest is whoever you appoint.
A realistic timeline
Searching commonly takes three to twelve months. The part after your offer is accepted is much more predictable.
- Weeks 1 to 4: budget, broker, pre-approval, target suburbs.
- Months 1 to 12: inspections most Saturdays, and a growing sense of what things actually sell for.
- Offer accepted: contract review, finance approval on the specific property, building and pest, strata report.
- Settlement: commonly four to six weeks in New South Wales and Victoria, thirty to sixty days elsewhere, set by the contract.
Common questions
How much deposit do I need for a first home in Australia?
Twenty per cent of the price avoids lenders mortgage insurance. Five per cent is enough under the First Home Guarantee, where the government guarantees the gap and the insurance is waived. On top of the deposit you need cash for stamp duty where it applies, conveyancing, inspections and moving.
Should I get pre-approval before I start looking?
Yes, before you inspect seriously. Pre-approval tells you your ceiling, and at auction it is the difference between bidding and watching. It is not a guarantee of finance, because the lender still has to value and approve the specific property.
Do I pay stamp duty as a first home buyer?
It depends on the state and the price. New South Wales exempts first home buyers up to $800,000 with a concession to $1 million. Victoria exempts up to $600,000 with a concession to $750,000. Queensland is nil to $700,000. Western Australia and South Australia have their own rules. Check your state revenue office, because thresholds move.
What is the First Home Guarantee and has it changed?
It lets eligible buyers purchase with a five per cent deposit without paying lenders mortgage insurance. Since October 2025 the income caps and the annual limit on places have been removed, and the property price caps were raised. Eligibility now includes people who have not owned Australian property in the past ten years.
Where these figures come from
- Housing Australia - unlimited places and higher price caps from 1 October 2025
- Housing Australia - First Home Guarantee
- SBS News - stamp duty exemptions and concessions for first home buyers
Grants, thresholds and duty rates change. Always check the current rules with the relevant state revenue office or Housing Australia before you rely on a number here.
Start with the free price check
Paste a listing and see the likely range against the guide. No account needed, no card.
Information, not legal advice. Confirm with your conveyancer before acting. Read the rest of the guide.