Australia · First Home Buyer · 2 May 2026

First Home Buyer Australia 2026: The Complete Guide From Saving to Settlement

By Emma Hartley · Updated 2 May 2026

The median Australian home price reached $780,000 in 2026. A 20% deposit is $156,000 — before stamp duty, legal fees, and moving costs. But with first home buyer grants worth up to $30,000, deposit schemes that let you buy with 2–5%, and stamp duty waivers in most states, the real entry point is significantly lower than that headline number suggests. This guide walks you through every stage of the journey, from your first savings goal to the day you collect the keys.

Step 1: How Much You Actually Need to Save

The deposit is only one part of the upfront cash you need. Many first home buyers focus on hitting a deposit target, then discover at settlement that they are short because they did not account for stamp duty, legal fees, building and pest inspections, and lender fees. The total cash required is typically 5–10% above the deposit amount alone.

The standard deposit benchmark is 20% of the purchase price. At 20%, your loan-to-value ratio (LVR) sits at 80%, which means you avoid Lenders Mortgage Insurance (LMI) — a premium that protects the lender (not you) if you default. LMI can add $8,000–$35,000 to your loan depending on the purchase price and LVR. However, government schemes now allow first home buyers to purchase with as little as 2% or 5% deposit without paying LMI, provided you meet eligibility criteria.

Here is a breakdown of the realistic total upfront costs to purchase a $700,000 home in each state in 2026:

State	20% Deposit	Stamp Duty (FHB)	Legal / Conveyancing	Building Inspection	Total Cash Needed
NSW	$140,000	$0 (waived ≤$800K)	$1,500	$550	$142,050
VIC	$140,000	$0 (waived ≤$600K; concession $600K–$750K — approx $8,800)	$1,400	$550	$150,750
QLD	$140,000	$0 (waived ≤$700K)	$1,100	$500	$141,600
WA	$140,000	$0 (waived ≤$450K; concession up to $600K — approx $5,200)	$1,800	$500	$147,500
SA	$140,000	$21,330 (no full waiver at $700K)	$1,200	$500	$163,030
TAS	$140,000	$0 (50% concession applies — approx $9,800)	$1,300	$450	$151,550

Note: Stamp duty thresholds and concessions change. Always verify current rates at your state revenue office. The figures above assume you qualify for first home buyer concessions.

Step 2: Government Schemes Overview

Australia has multiple overlapping first home buyer assistance programs in 2026. Understanding which ones you qualify for — and which can be combined — can save you tens of thousands of dollars.

First Home Guarantee (formerly FHLDS)

The federal government guarantees up to 15% of a first home buyer's loan, meaning you can purchase with a 5% deposit without paying LMI. There are 35,000 places available nationally each financial year. Income caps apply: $125,000 for singles and $200,000 for couples. Property price caps vary by city and region — in Sydney the cap is $900,000, Melbourne $800,000, Brisbane $700,000.

Regional First Home Buyer Guarantee

Similar structure to the First Home Guarantee but applies specifically to regional areas. If you are purchasing in a regional location and have lived or worked there for the preceding 12 months, you may access this scheme with a 5% deposit and no LMI. An additional 10,000 places are allocated each financial year.

Family Home Guarantee

Designed for single parents with dependants. The government guarantees up to 18% of the loan, allowing purchase with just a 2% deposit and no LMI. Income cap is $125,000. 5,000 places are available per financial year. This scheme recognises that single-income households face structurally different challenges in saving a deposit.

First Home Super Saver (FHSS) Scheme

The FHSS allows you to make voluntary contributions to your superannuation fund and later withdraw them (plus associated earnings) for a first home deposit. You can contribute up to $15,000 per financial year and withdraw up to $50,000 total. Because voluntary super contributions are taxed at 15% instead of your marginal rate, a buyer on $90,000 can save approximately $5,000–$9,000 in tax compared with saving in a standard bank account. Applications to release funds must be made through the ATO.

State Grants

Most states offer a First Home Owner Grant (FHOG) for new or substantially renovated properties. Grant amounts range from $10,000 in NSW to $30,000 in Queensland and Tasmania. See our dedicated article on first home buyer grants by state for the full breakdown.

Step 3: Getting Pre-Approval

Pre-approval (also called conditional approval or approval in principle) is a lender's written confirmation of how much they are willing to lend you, subject to final verification of the property and your financial position at the time of purchase. It is not a guarantee — but it is an essential tool that tells you your realistic price range and signals to vendors that you are a serious buyer.

To obtain pre-approval, lenders will assess your income, expenses, employment stability, existing debts (including HECS/HELP balances), and credit score. You will typically need to provide three recent payslips, three months of bank statements, identification documents, and statements for any existing loans or credit cards.

Pre-approval typically takes 1–5 business days and remains valid for 90 days with most lenders (some extend to 6 months). Crucially, if your circumstances change after pre-approval — you change jobs, take out a new car loan, or make multiple additional credit applications — the lender can withdraw approval even after you have exchanged contracts. Do not make any significant financial changes between pre-approval and settlement.

For a detailed walkthrough of the pre-approval process, read our home loan pre-approval guide.

Step 4: The Buying Process

Once you have pre-approval and have found a property you want to purchase, the process differs slightly depending on whether you are buying at auction or via private treaty (private sale).

Private Treaty (Private Sale)

The vendor sets an asking price. You make an offer — either at that price or lower. Once the vendor accepts, contracts are exchanged. In most Australian states, you then have a cooling-off period of 5 business days (in NSW and QLD; 3 days in VIC; SA and WA have different rules). During cooling-off, you can withdraw from the purchase, though a small penalty fee (typically 0.25% of the purchase price) may apply. This window gives you time to complete your building and pest inspection and have your solicitor review the contract. After cooling-off expires and conditions are satisfied, the contract becomes unconditional and settlement is scheduled, typically 30–90 days after exchange.

Auction

Auction is a public bidding process with no cooling-off period. If you are the successful bidder, you are immediately and unconditionally committed to the purchase. You must sign the contract and pay the deposit (typically 10%) on the day. This means your pre-approval, building inspection, and contract review must all be completed before the auction. Never bid at auction without unconditional pre-approval and a reviewed contract. A failed settlement after auction can result in you forfeiting your 10% deposit.

Settlement

Settlement is the day ownership legally transfers to you. Your conveyancer coordinates the exchange of funds and title documents with the vendor's conveyancer. In 2026, nearly all Australian settlements occur electronically through the PEXA platform. On settlement day, your lender releases the loan funds, the vendor's mortgage is discharged, and you receive the title. Your conveyancer will confirm when settlement has completed — after that, the agent releases the keys.

Step 5: Hidden Costs First Home Buyers Miss

Beyond the deposit and stamp duty, a number of additional costs catch first home buyers off guard. Budgeting for these in advance prevents a stressful shortfall at settlement.

Conveyancing / Legal Fees: $900–$2,500 depending on state and complexity. Your conveyancer handles the contract review, title search, and coordinates settlement.
Building and Pest Inspection: $400–$700. Identifies structural defects, pest infestations, and maintenance issues. Money very well spent — a single missed defect can cost $30,000+ to fix.
Lender Fees: Application fees ($0–$600), valuation fee ($0–$300), and mortgage registration fee ($100–$200). Many lenders waive application fees for first home buyers, so shop around.
Council Rates: Approximately $1,000–$3,000 per year depending on location. Your conveyancer will adjust these at settlement so you pay your proportional share for the year.
Strata Fees (Apartments): For units and townhouses in a strata scheme, levies cover building insurance, common area maintenance, and sinking fund contributions. These range from $500 to $5,000+ per quarter. Always obtain and review the strata report before purchasing an apartment.
Home and Contents Insurance: $1,200–$3,500 per year. Your lender will require this to be in place from the date of exchange (not settlement).
Moving Costs: $500–$3,000 depending on distance and volume.
Immediate Repairs and Setup: Even a well-presented home often requires immediate outlays — appliances, window furnishings, painting. Budget $3,000–$10,000 as a contingency.

Step 6: First Home Buyer Mistakes to Avoid

The most costly mistakes first home buyers make are not financial miscalculations — they are process errors that stem from not knowing the rules of the game. The top ones to avoid:

Bidding at auction without unconditional pre-approval. If you win and your finance falls through, you lose your 10% deposit.
Forgetting stamp duty in the budget. Stamp duty adds $0–$45,000 depending on price and state. Even with first home buyer concessions, it can be substantial.
Skipping the building and pest inspection. A $500 inspection can prevent a $50,000 mistake.
Draining all savings for the deposit. You still need cash at settlement for legal fees, rates adjustments, and immediate moving costs. Arrive at settlement with at least $10,000 in reserve.
Not comparing lenders. The difference between the highest and lowest variable rate in the market is typically 0.8–1.2%. On a $600,000 loan, that is $5,000–$7,000 per year.

For the full list of 10 costly mistakes, read our dedicated article on first home buyer mistakes.

All First Home Buyer Guides

This pillar page provides an overview of the entire first home buyer journey. For deep-dive information on each topic, use the links below:

Frequently Asked Questions

Can I use both the First Home Guarantee and a state grant at the same time?: Yes. Federal schemes like the First Home Guarantee operate independently of state-based grants. You can use the First Home Guarantee (5% deposit, no LMI) and also receive a state First Home Owner Grant of $10,000–$30,000 for a new home, provided you meet both sets of eligibility criteria.
What is the minimum deposit needed to buy a house in Australia in 2026?: Under the Family Home Guarantee for eligible single parents, you can buy with a 2% deposit and no LMI. For most first home buyers, the minimum is 5% using the First Home Guarantee. Without any government scheme, most lenders require at least 5% deposit, but you will pay LMI on anything below 20%.
How long does the home buying process take from start to settlement?: From beginning your deposit savings to collecting the keys, most first home buyers take 2–5 years (dominated by the saving phase). Once you begin actively searching for a property with pre-approval in hand, the process from offer to settlement typically takes 2–4 months. Settlement itself (from exchange of contracts) is usually 30–90 days.
Do I need a conveyancer or can I do my own conveyancing?: DIY conveyancing is technically legal in some Australian states, but most lenders require a licensed conveyancer or solicitor as part of the mortgage process. Given that mistakes in conveyancing can result in settlement delays, title defects, or financial loss, the $1,000–$2,000 cost of a professional is strongly recommended.
What happens if my building inspection finds major problems?: If a building and pest inspection reveals significant defects, you have several options: withdraw from the purchase during the cooling-off period (private sale only), renegotiate the price to reflect the cost of repairs, or request the vendor fix the issues before settlement. At auction, you cannot withdraw on this basis, which is why pre-auction inspections are essential.

Written by

Emma Hartley CFP

Certified Financial Planner & Mortgage Specialist

Emma is a CFP based in Brisbane with 9 years of experience in mortgage advice, first home buyer strategy, and retirement planning for Australian households navigating property markets and the age pension system.

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