The Complete First Home Buyer Guide for Australians (2026)

Buying your first home is one of the biggest financial moves you will ever make. It should feel exciting. Instead, most first home buyers I talk to are stressed and worried they are going to get it wrong.

Here is the good news for 2026: the rules just shifted in your favour. From 1 October 2025 the government scrapped the income limits and the yearly cap on places for its 5% deposit scheme, and lifted the price caps in every state. More first home buyers can now get in with a small deposit and skip Lenders Mortgage Insurance entirely. This guide walks you through exactly what you qualify for and what to do first.

The textbook answer is 20%. That is the level where you avoid Lenders Mortgage Insurance (LMI). The reality is most first home buyers do not have 20%, and thanks to the government schemes you often do not need it.

Here is how the deposit tiers actually work:

5% deposit: Available through the First Home Guarantee. Eligible buyers purchase with a 5% deposit and pay no LMI, because the government guarantees the rest. Since 1 October 2025 there are no income caps and no limit on places, so far more buyers qualify than before.

10% deposit: Outside the scheme you will pay LMI, which gets added to your loan. On a $600k purchase that is roughly $10,000 to $15,000. Not ideal, but it can get you into the market sooner.

20% deposit: No LMI, and access to the widest range of lenders and rates. Worth targeting if you can get there without missing the market.

The right deposit depends on your market, your timeline and your income. It is not one size fits all, and for many first home buyers the 5% scheme is now the obvious path.

The First Home Guarantee (FHBG) is the scheme most first home buyers should look at first. It lets you buy with a 5% deposit and no LMI. The lender treats your 5% as if it were a 20% deposit, and the government guarantees the gap. On a $700,000 purchase, skipping LMI can save you well over $20,000.

From 1 October 2025 the scheme was expanded significantly:

No income caps. The old limits of $125,000 for singles and $200,000 for couples are gone. Higher earners can now qualify.

No limit on places. The scheme used to run out of spots each year. Now every eligible buyer who has saved a 5% deposit can apply.

Higher price caps. The maximum purchase price was lifted in every state so the scheme keeps pace with the market.

Regional buyers included. The separate Regional First Home Buyer Guarantee was folded into the one scheme.

To be eligible you need to be an Australian citizen or permanent resident, at least 18, buying as an owner-occupier with a 5% deposit, and you must not have owned property in Australia in the past 10 years.

The price cap depends on where you buy. These are the caps that apply from 1 October 2025 for the capital city and large regional centres, with a lower cap for the rest of each state:

NSW: $1.5 million in Sydney and the regional centres of Newcastle, Lake Macquarie and the Illawarra. $800,000 for the rest of NSW.

VIC: $950,000 in Melbourne and Geelong. $650,000 elsewhere.

QLD: $1 million in Brisbane, the Gold Coast and the Sunshine Coast. $700,000 for the rest of the state.

WA: $850,000 in Perth, $600,000 elsewhere.

SA: $900,000 in Adelaide, $500,000 elsewhere.

TAS: $700,000 in Hobart, $550,000 elsewhere.

ACT: $1 million. NT: $600,000.

Caps are set by postcode, so neighbouring suburbs can sit either side of the line. I will check the exact cap for the address you are looking at before you make an offer.

Family Home Guarantee. If you are a single parent or single legal guardian with at least one dependent child, you can buy with just a 2% deposit and no LMI. From 1 October 2025 this stream also has no income cap and no limit on places. You do not have to be a first home buyer, as long as you do not own any other property once your new home settles.

First Home Owner Grant (FHOG). A cash grant from your state or territory for buying or building a new home. It ranges from $10,000 up to $30,000 depending on where you are, and is generally not available for established homes. The amounts and deadlines differ a lot between states.

Stamp duty concessions. Most states waive or reduce stamp duty for first home buyers, and this is often the biggest saving of all. In NSW, for example, eligible first home buyers pay no stamp duty up to $800,000 and a reduced rate between $800,000 and $1 million.

Help to Buy. The federal shared-equity scheme, where the government takes an equity share to shrink the size of your loan, is also rolling out. It suits some buyers and not others, so it is worth asking about.

Stacking the First Home Guarantee with a stamp duty concession and a state grant can be worth tens of thousands. I have had clients save more than $40,000 by structuring the purchase correctly. I have written a detailed grant guide for each state, linked below.

Pre-approval (also called conditional approval or approval in principle) is a lender's indication that they'd be willing to lend you up to a certain amount, subject to finding a suitable property.

You want pre-approval before you start attending open homes for a few reasons:

First, you know your actual budget. Not the number you hope for but the number a lender will actually back.

Second, you can move quickly when you find the right property. In competitive markets, sellers often prefer buyers with finance sorted.

Third, you spot any issues before they become problems. If there's something in your credit history or income documentation that needs fixing, better to know now than when you're under contract.

Pre-approval typically takes 3 to 5 business days once I have your documents. It's usually valid for 90 days, then you renew it if needed.

The list sounds long but most people have everything already:

For PAYG employees: two recent payslips, last two years of tax returns (or ATO income statements), three months of bank statements, photo ID, and details of any existing debts.

For self-employed: last two years of personal and business tax returns, ATO notices of assessment, business financial statements, and bank statements.

The cleaner your documentation, the faster the approval. Lenders want to see steady income, genuine savings history, and no unexplained large deposits or withdrawals.

Settlement is the day you officially become the owner. Your lawyer or conveyancer handles the paperwork. The lender transfers the funds to the seller's account. You get the keys.

In the lead-up to settlement, your broker and solicitor will work together to make sure everything is coordinated. The main things on your side: ensure your building and contents insurance is in place from the date of settlement (most lenders require this), and have your identification ready.

Settlement day is usually anticlimactic. You often don't need to be there in person. You just get a call or text saying it's done, and then you go pick up the keys.

Most first home buyers overcomplicate it. The process is straightforward when you have the right people in your corner. A good broker costs you nothing, saves you hours of research, and makes sure you end up with the right loan rather than whatever your bank happens to offer that day.

If you are thinking about buying in the next six to twelve months, the best first step is a conversation. We will work out your borrowing capacity, look at what schemes you qualify for, and map out a realistic path to your front door.

Book a free chat and let's get you moving.

This is general information, not financial or tax advice. Grant rules, price caps and deadlines change, so get advice specific to your situation before you act. Matty Teague, Mortgage Broker, Powered by Flint. Credit Representative 573962, Flint Group Pty Ltd ACL 488313.