South Australia · Complete Guide
The Complete Guide to HomeStart Finance in South Australia
An easy to read guide to how HomeStart helps South Australians buy sooner with a low deposit and no Lenders Mortgage Insurance, and how to plan your exit before you sign.
Saving a 20 percent deposit while you are paying Adelaide rent can feel like running up a down escalator. Every time you get close, prices move again. HomeStart Finance exists to break that loop for South Australians, by lowering the deposit hurdle and removing the cost most low deposit borrowers dread. This guide walks through how HomeStart actually works, who it suits, and how to plan your exit before you even sign.
What is HomeStart Finance?
HomeStart Finance is a South Australian Government backed lender that helps low to middle income earners buy a home with a smaller deposit. Borrowers can buy with a deposit as low as 2 to 3 percent, and HomeStart does not charge Lenders Mortgage Insurance, replacing it with a lower cost Loan Provision Charge.
Because HomeStart is backed by the state government rather than chasing the same borrowers as the major banks, it can say yes to people the big lenders often shade or decline. That includes first home buyers with thin deposits, single income households, and some borrowers receiving stable Centrelink payments. The trade offs are real, and we cover them honestly further down and in the linked deep dive guides.
The full guide: every HomeStart topic in one place
HomeStart is not one product. It is a core home loan with a set of bolt on options that change how much you can borrow and how little deposit you need. The five guides below cover every part of it. Pick the one that matches where you are at, or work through them in order.
1. Eligibility and income
Who qualifies, how Centrelink income is treated, the income limits and credit rules.
Read the eligibility and income guide ›2. Special loan products
The 2 percent Graduate Loan, the Starter Loan and the Shared Equity Option explained.
Explore HomeStart special products ›3. Rates and mechanics
How the Repayment Safeguard works, the charge that replaces LMI, and your borrowing power.
See rates and the Repayment Safeguard ›4. Is it worth it? The catch
An honest review of the trade offs, the owner occupier rules and who it really suits.
Read whether HomeStart is worth it ›5. The exit strategy
How to refinance away to a mainstream bank once your equity grows.
Learn how to refinance out of HomeStart ›Together these five guides form the complete picture, from working out if you qualify, through the products and the real costs, to planning your exit. Each one links back here, so you can always find your way around the full HomeStart guide.
How small a deposit do you really need?
The headline number depends on which HomeStart product you use and whether you are buying an established home or building.
| Pathway | Typical minimum deposit | Best suited to |
|---|---|---|
| Graduate Loan | From 2 percent | Holders of a Certificate III or IV, Diploma, Bachelor degree or higher |
| Low Deposit Loan / HomeStart Home Loan | From around 3 percent | General owner occupier buyers |
| Building or construction | Slightly higher, paid in stages | Buyers building a new home on a fixed price contract |
The single biggest saving for most HomeStart borrowers is not the low deposit. It is that HomeStart does not charge Lenders Mortgage Insurance. On a high deposit loan with a normal lender, LMI can run well into five figures. HomeStart replaces it with a far cheaper Loan Provision Charge.
HomeStart application requirements checklist
Every application is different, but most HomeStart files need the same core building blocks. Have these ready before you apply and the process moves far faster.
- Stable, ongoing income. This can include eligible continuous Centrelink payments, not just a payslip from an employer.
- Identification documents totalling 100 points, such as passport, drivers licence and Medicare card.
- Recent consecutive bank statements showing how you manage money day to day.
- Evidence of your deposit, whether that is genuine savings or a gift from family.
- An owner occupier purchase or build in South Australia. HomeStart is not for pure investment properties.
Wondering how long approval takes? Timeframes depend on the lender, the valuer and how complete your file is, so anyone quoting an exact number of days is guessing. A clean, well prepared application is the single biggest thing in your control. That is where a broker earns their keep.
Not sure which HomeStart pathway fits your situation, or how much you could borrow? A quick chat with a broker who works with HomeStart every week will give you a clear answer. There are no upfront fees for first home buyer broking, because the lender pays the commission.
Speak With An Accredited HomeStart Broker
How to apply: directly or through a broker
You can approach HomeStart directly, or apply through an accredited broker. Going through a broker costs you nothing extra for a standard home loan, since the lender pays the commission, and it means someone independent is checking that HomeStart is genuinely the right fit before you commit. A broker can also line HomeStart up against mainstream options so you can see the real difference for your numbers.
About the author
Ross McFarlane • Licensed Mortgage Broker
Ross is an Adelaide based mortgage broker who has helped South Australians into their first home for nearly 7 years, including through HomeStart Finance low deposit pathways. His focus is making low deposit lending clear and straightforward, so you understand exactly how these loans work before you commit to one.
Credit Representative Number 526725, authorised under Australian Associated Advisers Pty Ltd trading as Keylend, Australian Credit Licence 392169.
Frequently asked questions
What is the minimum deposit for a HomeStart loan?
It depends on the product. The Graduate Loan can start from a 2 percent deposit, while the standard Low Deposit Loan typically starts from around 3 percent. Building a new home usually needs a slightly larger deposit, released in stages. HomeStart does not charge Lenders Mortgage Insurance on these low deposit loans.
What documents do I need for a HomeStart application?
You generally need 100 points of identification, evidence of stable ongoing income such as payslips or Centrelink statements, recent consecutive bank statements, and proof of your deposit funds. The exact list varies by situation, so confirm the current requirements with HomeStart or your broker.
How long does HomeStart take to approve a loan?
Approval timeframes vary with the completeness of your file, valuation turnaround and current demand, so there is no fixed number. The biggest factor you control is how complete and clean your application is when it is lodged.
Can I apply for HomeStart through a mortgage broker?
Yes. You can apply directly to HomeStart or through an accredited broker. For a standard home loan there is no upfront fee to you when you use a broker, because the lender pays the commission.
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See if HomeStart is right for you
Tell us where you are at and we will map out your deposit, your borrowing power and whether HomeStart beats a mainstream loan for your numbers.
General information only. Not financial or credit advice. Eligibility criteria apply.