How to Buy Your First Home Faster in Australia (2026)
Buying your first home in Australia can feel overwhelming, but with the right knowledge and strategy, you can enter the market faster than you think. This comprehensive guide breaks down the government schemes, grants, and practical strategies available to first home buyers in 2026—with a focus on real numbers, eligibility criteria, and actionable steps.
The Reality of First Home Buying in 2026
Let's be clear: buying your first home is challenging. Property prices remain high, interest rates are still elevated compared to recent years, and saving a deposit while paying rent is tough. But here's the good news: there are more support schemes available than ever before, and recent changes have made these schemes more accessible.
The key is understanding what you qualify for and how to maximize every dollar you save. This guide focuses on actionable information—no fluff, just the facts you need.
Government Schemes to Help You Buy Faster
1Australian Government 5% Deposit Scheme (Home Guarantee Scheme)
What it is: From October 1, 2025, this scheme allows eligible first home buyers to purchase a home with just a 5% deposit and avoid paying Lenders Mortgage Insurance (LMI).
Major 2025 Changes
- Unlimited places: No more competing for limited spots
- No income caps: Previous income limits ($125k individual / $200k couple) removed
- Higher price caps: Location-based caps increased to reflect current market prices
Eligibility Requirements
- You must not have owned residential property (in full or part) in the past 10 years
- Must be purchasing as an owner-occupier (not an investment)
- Property must be at or below the location's price cap
- Must be an Australian citizen or permanent resident
How Much You Can Save
LMI typically costs between $10,000-$30,000+ depending on your deposit and loan size. This scheme eliminates that cost entirely, saving you thousands and allowing you to enter the market with significantly less upfront capital.
Real Example
Sarah wants to buy a $600,000 home. With a 5% deposit ($30,000), she can purchase through the scheme without paying ~$20,000 in LMI. Without this scheme, she'd need to save $120,000 (20% deposit) to avoid LMI—a difference of 4+ years of additional saving.
2First Home Super Saver Scheme (FHSS)
What it is: A scheme that lets you save for your first home inside your super fund, taking advantage of the lower tax rates on super contributions.
How It Works
- Make voluntary super contributions (before-tax or after-tax) specifically for your first home
- Contribution limits: $15,000 per year, up to $50,000 total across all years
- When you're ready to buy, you can withdraw these contributions (plus earnings) to use as your deposit
The Tax Advantage
Concessional (before-tax) contributions are taxed at just 15% in your super fund instead of your marginal tax rate (which could be 32% or higher). This means you're effectively saving 17%+ more than if you saved in a regular bank account.
Real Example
Jake earns $85,000 (32.5% tax bracket). Over 3 years, he contributes $15,000 annually ($45,000 total) to his super via salary sacrifice. Instead of losing 32.5% to tax ($14,625), he only pays 15% ($6,750), effectively saving him $7,875. Plus, when withdrawn, it's taxed at a lower rate than income tax, creating additional savings.
Important Conditions
- You must be 18 or older when requesting withdrawal
- You must never have owned property in Australia (except in certain financial hardship cases)
- After withdrawing, you have 12 months to sign a contract to purchase or build a home (or face a 20% FHSS tax)
- Must intend to live in the property for at least 6 of the first 12 months
3First Home Owner Grant (Western Australia)
What it is: A $10,000 cash grant for eligible first home buyers purchasing or building a new home in Western Australia.
Eligibility Requirements
- Must be 18 years or older
- Australian citizen or permanent resident
- Purchasing or building a new home only (newly built, off-the-plan, or owner-builder)
- Not means-tested (your income doesn't affect eligibility)
- Property value caps:
- Perth metro: Under $750,000
- North of 26th parallel: Under $1,000,000
- Neither you nor your spouse/partner have previously received the grant or owned residential property in Australia (with some exceptions)
Occupancy Requirement
You must occupy the property for a continuous period of at least 6 months, starting within 12 months of completion.
Note: Other states have different or no FHOG schemes. Check your state's revenue office for current offerings. Many states have phased out cash grants for new homes or only offer grants for regional purchases.
4Stamp Duty Concessions (Western Australia)
Major changes effective March 21, 2025 have significantly increased the thresholds for stamp duty exemptions and concessions in WA.
Established Homes (Perth and Peel)
- $0 stamp duty for homes valued up to $500,000 (increased from $450,000)
- Reduced rate for homes valued between $500,000 and $700,000 (increased from $600,000)
Established Homes (Regional WA)
- $0 stamp duty for homes valued up to $500,000
- Reduced rate for homes valued between $500,000 and $750,000
Vacant Land
- $0 stamp duty for land valued up to $350,000 (increased from $300,000)
- Reduced rate for land valued between $350,000 and $450,000
Off-the-Plan Purchases
Extended until June 30, 2026:
- Full exemption for properties up to $750,000 (increased from $650,000)
- 50% concession for properties between $750,000 and $850,000
Potential Savings
First home buyers purchasing homes under $500,000 can save nearly $18,000 in stamp duty. Around 22,000 first home buyers are expected to benefit from these recent changes.
Note: Each state has different stamp duty concessions. Check your state revenue office for current rates and exemptions. Many states offer substantial concessions for first home buyers.
Combining Multiple Schemes
Here's where it gets powerful: you can often combine multiple schemes to accelerate your home purchase. Let's look at realistic scenarios.
Scenario: Perth First Home Buyer
Emma, 28, earns $75,000/year and wants to buy a new $550,000 townhouse in Perth.
Traditional Path (20% deposit):
- Deposit required: $110,000
- Stamp duty: ~$19,000
- Total upfront: ~$129,000
- Time to save at $1,500/month: ~7 years
Using Available Schemes:
- 5% Deposit Scheme: Only need $27,500 deposit + saves ~$18,000 LMI
- FHSS: Saved $30,000 in super over 2 years with tax benefits (~$3,500 tax saved)
- FHOG (new home): $10,000 grant
- Stamp duty (new home via off-the-plan): $0 (was $19,000)
- Total savings/benefits: ~$50,500
- Time to save deposit: ~1.5 years
Result: Emma enters the market 5.5 years sooner and saves over $50,000 by strategically using available schemes.
Practical Steps to Buy Your First Home Faster
Step 1: Create a Realistic Budget and Savings Plan
Before anything else, you need to know your numbers:
- Track your income and expenses for 2-3 months to understand your cash flow
- Identify areas to cut back (subscriptions, dining out, entertainment)
- Set a savings target: Aim for at least 5% deposit + $5,000-$10,000 for additional costs
- Open a high-interest savings account specifically for your home deposit
- Set up automatic transfers each payday to your savings account
Reality check: If you're renting and finding it difficult to save, you're not alone. Consider:
- Living with family temporarily to maximize savings
- Finding a side income to boost savings rate
- House sharing to reduce rent costs
- Targeting properties at the lower end of your acceptable range
Step 2: Maximize the FHSS Scheme
If you're employed and earning regular income, this is a no-brainer:
- Contact your employer about salary sacrificing up to $15,000/year into super
- Alternatively, make after-tax voluntary contributions and claim a tax deduction
- Track your contributions carefully (you can check via myGov/ATO)
- Apply for a determination through myGov when you're ready to withdraw
Step 3: Get Pre-Approval Early
Don't wait until you've found a property. Get pre-approved 3-6 months before you plan to buy:
- Contact multiple lenders or use a mortgage broker (often free for borrowers)
- Understand your borrowing capacity—use our Borrowing Power Calculator
- Improve your borrowing power by paying off debts and closing unused credit cards
- Ask specifically about the 5% Deposit Scheme and which lenders your broker can access
Borrowing Power Tip
A $10,000 credit card limit can reduce your borrowing capacity by ~$64,000. Before applying for pre-approval, close any unused credit cards and reduce limits on cards you keep. See our detailed guide: How to Increase Borrowing Power
Step 4: Research Properties and Set Realistic Expectations
Your first home doesn't have to be your forever home:
- Consider suburbs further from the CBD where prices are more affordable
- Look at apartments or townhouses instead of houses
- Be open to properties that need cosmetic updates (paint, flooring) but are structurally sound
- Attend open homes to understand what your budget actually gets you
- Use online tools to track median prices in suburbs you're considering
Step 5: Apply for Available Grants and Schemes
Once you've found a property and are under contract, act quickly on applications:
- 5% Deposit Scheme: Your lender handles this application as part of your loan approval
- FHSS: Apply via myGov at least 3-4 weeks before settlement
- FHOG (WA): Apply through your settlement agent or directly via Revenue WA
- Stamp duty concession: Usually automatically applied at settlement if eligible
Step 6: Get Professional Inspections
Don't skip building and pest inspections to save $500-$800. Discovering a $20,000 structural issue after purchase is far worse:
- Always get a building inspection for established homes
- Get a pest inspection, especially for older homes or areas prone to termites
- Review strata reports carefully if buying an apartment (look for special levies or maintenance issues)
- Factor in any necessary repairs when making your offer
Common Mistakes First Home Buyers Make
- ❌ Borrowing the maximum amount: Just because a bank will lend you $700k doesn't mean you should borrow that much. Leave buffer room for rate rises and life changes.
- ❌ Not factoring in ongoing costs: Strata fees, council rates, insurance, maintenance—these add up to thousands per year.
- ❌ Skipping the FHSS: Free money via tax savings. If you're employed, use it.
- ❌ Buying in the wrong location: A 30-minute longer commute might mean a $100k cheaper property. Run the numbers.
- ❌ Not shopping around for loans: A 0.5% interest rate difference can save you tens of thousands over the loan term.
- ❌ Emotional decision-making: Don't fall in love with a property and overpay. Stick to your budget and walk away if needed.
- ❌ Forgetting about stamp duty and other upfront costs: Budget for legal fees ($1,000-$2,000), inspections ($500-$800), and moving costs.
Additional Costs to Budget For
Beyond your deposit, you'll need to budget approximately 3-5% of the purchase price for additional costs:
| Cost | Typical Amount |
|---|---|
| Stamp duty (if applicable) | Varies by state, often $0-$20k+ for first home buyers |
| Legal/conveyancing fees | $1,000 - $2,000 |
| Building & pest inspections | $500 - $800 |
| Lender fees (application, valuation) | $0 - $1,000 (often waived) |
| Moving costs | $500 - $2,000 |
| Initial furniture/setup | $2,000 - $10,000+ |
When Should You Buy?
There's never a "perfect" time to buy, but here are factors to consider in 2026:
Positive Factors:
- Unlimited 5% Deposit Scheme places: No more competing for limited spots
- Increased stamp duty concessions (WA): Save up to $18,000
- Potential rate cuts: RBA may lower rates in 2026, improving affordability
- More balanced market: Property prices have stabilized in many areas
Challenges to Consider:
- Interest rates still elevated: Compared to 2020-2021 lows
- Cost of living pressures: Making it harder to save
- Competition from other buyers: Improved scheme access may increase demand
Bottom line: If you're financially ready (stable income, manageable debt, emergency fund), 2026's improved schemes make it a viable time to buy. Waiting for perfect conditions often means missing opportunities.
Frequently Asked Questions
Can I use the 5% Deposit Scheme and FHSS together?
Yes! The 5% Deposit Scheme relates to how much deposit you need, while FHSS helps you save that deposit more tax-effectively. You can absolutely use both.
Do I qualify as a first home buyer if I owned property 15 years ago?
It depends on the scheme. For the 5% Deposit Scheme (from Oct 2025), you must not have owned property in the past 10 years. For FHSS and most state grants, you generally cannot have owned property ever. Check specific scheme requirements.
Is it better to buy new or established?
This depends on your priorities and location. In WA, new homes qualify for the $10,000 FHOG and potentially $0 stamp duty via off-the-plan concessions. Established homes may be cheaper but don't qualify for the FHOG. Run the numbers for your specific situation.
How long does it take to withdraw FHSS funds?
After you apply for a determination via myGov, the ATO typically processes it within 15-25 business days. Plan ahead and apply at least 3-4 weeks before you need the funds for settlement.
What if I can't save a 5% deposit?
If saving even 5% is challenging, consider: (1) using the FHSS to build your deposit via super over 2-3 years, (2) asking family if they can act as guarantor (they use their property as additional security), or (3) looking at lower-priced properties or different suburbs. Some specialist lenders offer higher LVR loans, but these come with higher costs.
Should I use a mortgage broker or go directly to a bank?
Mortgage brokers are typically free for borrowers (lenders pay them) and can access multiple lenders, including those not available to the public. They can be especially helpful for navigating the 5% Deposit Scheme and finding lenders with favorable assessment criteria. However, do your own research too—brokers may have preferred lenders based on commission structures.
Calculate Your Borrowing Power
Before you start house hunting, find out how much you can actually borrow. Our free calculator shows your borrowing capacity based on your income, expenses, and existing debts.
Check Your Borrowing Power →The Bottom Line
Buying your first home in Australia in 2026 is challenging but absolutely achievable with the right strategy. The key steps are:
- Create a realistic savings plan and stick to it
- Maximize the FHSS for tax-effective savings
- Use the 5% Deposit Scheme to enter the market faster and avoid LMI
- Claim all available grants and concessions (FHOG, stamp duty exemptions)
- Get pre-approved early and understand your borrowing capacity
- Set realistic expectations about location, property type, and price
- Don't rush or make emotional decisions—this is likely your biggest financial commitment
By combining multiple schemes strategically, first home buyers can save $30,000-$50,000+ in upfront costs and enter the market years sooner than via the traditional 20% deposit path. The schemes exist to help you—make sure you use them.
Remember: Your first home is a stepping stone. It doesn't need to be perfect. Focus on getting into the market in a financially sustainable way, build equity, and upgrade later when you're in a stronger position.
Disclaimer: This guide provides general information only and should not be considered financial advice. Eligibility criteria and scheme details can change. Always verify current requirements with official sources (ATO, state revenue offices, Housing Australia) and consider seeking advice from a qualified financial advisor or mortgage broker for your specific situation.
Related Articles
The Hidden Costs of Buying a Home in Australia: Beyond the Deposit
Discover the real costs of buying a home in Australia beyond the deposit. Learn about stamp duty, LMI, legal fees, inspections, ongoing costs, and how much you actually need to budget for your first home purchase in 2026.
From Renting to Buying: Your Complete Guide to Homeownership in Australia
Ready to stop renting and buy your first home? Learn the essential steps, costs, and strategies to transition from renting to homeownership in Australia with our comprehensive guide.