Deposits and First Home Schemes
Straight answers on deposits and first home schemes, from how much you really need and avoiding Lenders Mortgage Insurance to the First Home Guarantee, 5 per cent deposits, stamp duty and the costs people forget. Current for 2026.
A 20 per cent deposit avoids Lenders Mortgage Insurance, but eligible first home buyers can often buy with as little as 5 per cent using the First Home Guarantee, which the government expanded from 1 October 2025 by removing income caps and place limits and lifting price caps. Beyond the deposit, budget for stamp duty, legals, inspections, loan fees and other costs. These guides explain each, current for 2026.
Clear answers to common questions about deposits and first home buyer schemes in Australia: how much deposit you actually need, the ways to avoid Lenders Mortgage Insurance, who is eligible for the expanded First Home Guarantee in 2026, whether you can buy with a 5 per cent deposit, how stamp duty is calculated, and the hidden costs of buying. General information current for 2026, with policy figures dated and pointed to official sources.
The deposit is the start, not the whole story
Twenty per cent avoids Lenders Mortgage Insurance, but you can often buy with less using a guarantee or guarantor. Either way, budget for purchase costs on top of the deposit.
Schemes have changed
The First Home Guarantee expanded from 1 October 2025: income caps and place limits removed, price caps lifted. Many buyers who were previously ineligible may now qualify.
Stamp duty is a state cost
Stamp duty is set by each state, so the rules and concessions differ. First home buyers often pay reduced or no duty, especially on new homes or vacant land. Use your state revenue office calculator.
Count every cost
Beyond the deposit and duty, budget for legals, inspections, loan fees, insurance and moving, plus a buffer, so you are not caught short at settlement.
Where to get help
These are general guides. A broker can confirm your deposit options, check scheme eligibility and map the full funds you need, usually at no cost to you.
- A 20 per cent deposit avoids Lenders Mortgage Insurance, but you can often buy with as little as 5 per cent using a guarantee or guarantor.
- The First Home Guarantee expanded from 1 October 2025: income caps and place limits removed and price caps lifted, with the Adelaide cap at 900,000 dollars.
- Stamp duty is a state tax with first home buyer concessions that differ by state, so use your state revenue office calculator.
- Budget for purchase costs on top of the deposit, including legals, inspections, loan fees, insurance and moving.
- Always verify scheme rules with Housing Australia and duty figures with your state revenue office.
Not sure how much deposit you really need?
Answer a few quick questions and we can check your deposit options and scheme eligibility, at no cost and no obligation.
Check Your Options
A few quick questions, no obligation.
What is your goal?
Tell us a bit more about the plan
How do you earn your income?
How is your credit score?
This helps us match you to the right lender from the start.
Last step. Where should we send your options?
Your information is private and we will never share it.
By submitting, you agree to be contacted by one of our team of licensed mortgage brokers. No obligation. No spam.
You're all set.
We've received your details. One of our friendly brokers will reach out within 1 business day to help guide you through your options.
Deposits and First Home Schemes: common questions
How much deposit do I need to buy a house in Australia?
The common benchmark is 20 per cent of the purchase price, because that level usually avoids Lenders Mortgage Insurance. You can often buy with less, sometimes as little as 5 per cent, but a smaller deposit generally means paying Lenders Mortgage Insurance or using a government guarantee or a guarantor. You also need extra funds on top for purchase costs.
How can I avoid Lenders Mortgage Insurance?
The main ways to avoid Lenders Mortgage Insurance are: save a 20 per cent deposit so your loan to value ratio is 80 per cent or less, use an eligible government guarantee that replaces the need for insurance, use a family guarantor who secures part of the loan, or qualify for a profession based waiver that some lenders offer to certain occupations.
What is the eligibility for the First Home Guarantee in 2026?
The First Home Guarantee, now part of the expanded Australian Government scheme administered by Housing Australia, lets eligible first home buyers purchase with as little as a 5 per cent deposit without paying Lenders Mortgage Insurance. From 1 October 2025 the income caps and place limits were removed, and price caps were lifted, for example to 900,000 dollars in Adelaide. You must be a citizen or permanent resident, 18 or over, an owner occupier, and buy within the price cap.
Can I buy a house with a 5 per cent deposit?
Yes, in many cases. Eligible first home buyers can use the First Home Guarantee to buy with a 5 per cent deposit without paying Lenders Mortgage Insurance, because the government guarantees part of the loan. Outside the scheme, some lenders will lend to a 5 per cent deposit but generally charge Lenders Mortgage Insurance. You also need funds for purchase costs on top.
How do I calculate stamp duty when buying a home?
Stamp duty is a state tax, so it is calculated differently in each state and territory, usually on a sliding scale based on the property value. First home buyers often pay reduced or no duty, especially on new homes or vacant land, depending on the state. The reliable way to calculate it is the official calculator on your state revenue office website. This guide uses South Australia as the main example.
What are the hidden costs of buying a home in Australia?
Beyond the deposit, buying a home involves several costs that catch people out: stamp duty where it applies, conveyancing or legal fees, building and pest inspections, loan establishment and valuation fees, Lenders Mortgage Insurance if your deposit is below 20 per cent, moving costs, council and water rate adjustments, and home insurance. Budgeting for these upfront prevents a shortfall at settlement.
General information only. This page provides general information about home loans and is not financial or credit advice, a quote, or a guarantee, and your personal circumstances have not been considered. Lending policies, interest rates, fees and eligibility vary by lender and change over time. Always confirm your own situation with a licensed mortgage broker or lender before acting. Ross McFarlane (Credit Representative 526725) is an authorised Credit Representative of Australian Associated Advisers Pty Ltd t/a Keylend, Australian Credit Licence 392169.