First Home Buyer Guide Australia 2026

Buying your first home is one of the biggest financial decisions you will ever make. The process can feel overwhelming, but breaking it down into clear steps makes it manageable. This guide walks you through every stage — from saving your deposit to collecting the keys — and highlights the grants, concessions and government schemes available to first home buyers in Australia in 2026.

Step 1: Assess Your Financial Position

Before you start browsing real estate listings, take an honest look at your finances. You need to understand three things: how much deposit you have (or can save), how much you can borrow, and what your ongoing repayments will look like.

As a general rule, aim to save at least 10-20% of your target purchase price, plus an additional 3-5% for buying costs (stamp duty, conveyancing, building inspection, loan fees). On a $600,000 property, that means you need $60,000 to $120,000 for the deposit plus $18,000 to $30,000 for costs, depending on your state's stamp duty concessions.

If that seems daunting, remember that government schemes can significantly reduce the upfront cost. The First Home Guarantee lets you buy with 5% deposit and no LMI, and first home buyer stamp duty exemptions can save tens of thousands in some states.

Step 2: Understand the Grants and Schemes

First Home Owner Grant (FHOG)

The FHOG is a one-off payment from the state or territory government to help first home buyers. It applies to new or substantially renovated homes only — not established properties. The amounts and thresholds as of early 2026:

First Home Guarantee (formerly First Home Loan Deposit Scheme)

This Federal Government scheme, administered by Housing Australia, allows eligible first home buyers to purchase with as little as a 5% deposit without paying Lenders Mortgage Insurance. The government guarantees the difference between your deposit and 20%, so the lender treats your loan as if you had a full 20% deposit.

Places are limited each financial year (35,000 places in 2025-26). Eligibility criteria include income caps (currently $125,000 for singles and $200,000 for couples) and property price caps that vary by location. You must be an Australian citizen aged 18 or over who has never owned property in Australia.

Stamp Duty Concessions

Every state and territory offers some form of stamp duty relief for first home buyers. In NSW, first home buyers pay no stamp duty on properties up to $800,000 (new and existing), with a sliding concession up to $1,000,000. In Victoria, the exemption threshold is $600,000 with concessions to $750,000. These concessions can save you $20,000 to $40,000 in upfront costs.

Step 3: Get Pre-Approved

Pre-approval (also called conditional approval) is a written indication from a lender that they are prepared to lend you a specific amount, subject to conditions. It typically lasts for 90 days and gives you:

• A clear budget to house-hunt with confidence
• Stronger negotiating power — sellers and agents take pre-approved buyers more seriously
• The ability to move quickly when you find the right property, especially at auction
• Early identification of any issues with your application that can be resolved before you find a property

Step 4: Deposit Strategies

Building a deposit is often the biggest hurdle. Here are proven strategies:

• High-interest savings accounts: Dedicated first home buyer savings accounts often offer bonus interest rates.
• First Home Super Saver Scheme (FHSSS): You can voluntarily contribute up to $15,000 per financial year (and $50,000 in total) to your super fund, then withdraw it to buy your first home. Because super contributions are taxed at 15% instead of your marginal rate, you save on tax and earn the fund's return.
• Family guarantees: A parent can use equity in their property to guarantee your deposit portion. You borrow 100% of the purchase price (sometimes plus costs), but the parent's property secures the deposit shortfall. This avoids LMI without needing 20% savings.
• Government assistance: Combine the FHOG, stamp duty concessions and the First Home Guarantee to minimise the savings required.

Step 5: Find Your Property and Make an Offer

Once you have pre-approval, start house-hunting within your budget. Important considerations:

• Always get a building and pest inspection ($400-$600) before committing — this can save you from costly surprises
• At auction, the sale is unconditional once the hammer falls. Ensure your pre-approval is solid and you have done inspections beforehand
• For private treaty sales, you can include conditions (subject to finance, subject to building inspection) that protect you
• Engage a conveyancer or solicitor early — they can review the contract before you sign

Common Mistakes to Avoid

1. Borrowing the maximum: Just because a lender approves you for $700,000 does not mean you should borrow that much. Leave a buffer for rate rises, unexpected expenses and lifestyle changes.
2. Not comparing rates: The difference between 6.0% and 6.3% on a $500,000 loan over 30 years is roughly $27,000 in interest. Always compare across multiple lenders or use a broker.
3. Skipping the building inspection: A $500 inspection can reveal structural issues, termite damage or other defects that could cost tens of thousands to repair.
4. Forgetting ongoing costs: Council rates, strata levies, insurance, maintenance and utilities can add $10,000-$20,000 per year to the cost of home ownership.
5. Not having an emergency fund: Aim to have three to six months of expenses saved after settlement, in case of unexpected events like job loss or major repairs.