Buying your first home in Australia can feel overwhelming, especially when you hear terms like grants, schemes, and stamp duty thrown around like everyone already knows what they mean. The good news? You do not have to figure it all out on your own.
The first home buyers scheme is designed to help everyday Australians like you get a foot in the door of the property market sooner than you might think possible. Whether you are saving for a deposit, unsure about eligibility, or simply want to understand what support is actually available, this guide has got you covered.
In this complete walkthrough, we will break down exactly how the first home buyers scheme works, who qualifies, how to apply, and what other government incentives you can stack alongside it. We will keep things simple and jargon-free, so even if this is the first time you have seriously looked into buying property, you will walk away feeling confident and informed.
Let’s get started and turn that dream of owning your first home into a very real plan.
What Is the First Home Buyers Scheme?
Here’s something that surprises a lot of people: there is actually no single program called the “first home buyers scheme” in Australia. The term gets used everywhere, but it’s really an umbrella phrase that covers three separate federal programs, each designed to tackle a different barrier to home ownership. You can use them independently, or in some cases, stack them together for even greater benefit.
The three programs are the 5% Deposit Scheme (also known as the First Home Guarantee), the Help to Buy Scheme, and the First Home Super Saver Scheme (FHSSS).
The 5% Deposit Scheme lets eligible buyers purchase with just a 5% deposit without paying Lenders Mortgage Insurance. The Help to Buy Scheme is a shared equity arrangement where the government co-buys a portion of your home alongside you, reducing how much you need to borrow. The FHSSS works differently again, allowing you to save for a deposit inside your superannuation fund and withdraw those savings at a lower tax rate. Each solves a different piece of the affordability puzzle, which is why understanding all three matters.
The numbers tell you just how much traction these programs have gained. More than 230,000 Australians have used the Home Guarantee Scheme since it launched in January 2020, and it now supports 1 in 3 first home buyers nationally. That’s a dramatic shift from its first full year, when it reached just 1 in 10 buyers. You can get the full picture of all three programs at firsthomebuyers.gov.au, the official Australian Government portal.
October 2025 marked the most significant policy overhaul since the scheme began. Income caps were removed entirely, annual place limits were lifted, and property price caps were raised across most locations. The changes, detailed by both Treasury and the Law Society Journal, opened the door for a much broader group of buyers to qualify.
To put a face to these numbers, the average first home buyer in 2026 is 33 years old, borrowing around $480,000, and putting down a deposit of roughly 16%. That sits well below the traditional 20% threshold most people assume is mandatory, and it reflects just how much the scheme is reshaping the path into home ownership.
The 5% Deposit Scheme: How It Works in 2026
Of all the programs sitting under the first home buyers scheme umbrella, the Australian Government 5% Deposit Scheme (officially called the First Home Guarantee) tends to get the most attention, and for good reason. It tackles one of the biggest hurdles for new buyers head-on: the deposit.
What the Scheme Actually Does
Here is the core idea. Normally, if you buy a home with less than a 20% deposit, your lender requires you to pay Lenders Mortgage Insurance (LMI). LMI protects the lender, not you, and it can cost anywhere from $10,000 to $30,000 or more depending on your loan size. Under the 5% Deposit Scheme, the government acts as a guarantor for the gap between your deposit and the 20% threshold, which means your lender no longer needs LMI. You keep that money in your pocket. For someone borrowing around the average first home buyer loan of $480,000, that is a significant saving before you have even made your first repayment.
The scheme is administered by Housing Australia and delivered through approximately 30 participating lenders. Not every bank or mortgage provider offers it, so checking whether your lender is on the approved list is an important first step. You can find the full detail on eligible lenders and current property price caps through Housing Australia’s official announcement.
The October 2025 Expansion Changed Almost Everything
Before October 2025, the scheme had income limits: $125,000 per year for individuals and $200,000 for joint applicants. Those limits are now completely gone. As of 1 October 2025, your income is no longer a factor. If you meet the other eligibility criteria, you can access the scheme regardless of what you earn. Alongside removing income caps, the government also lifted the annual place limits entirely. Previously, only 50,000 guarantees were available each year, and in 2024-25, 46,022 of those places were snapped up, a 92% utilisation rate, with some streams filling completely. Now the scheme is uncapped, meaning you do not have to race to secure a spot before allocations run out.
Two Streams to Know About
The scheme operates through two distinct pathways, and understanding which one applies to you matters.
The General Stream requires a minimum 5% deposit and is open to genuine first home buyers or anyone who has not owned property in Australia within the past 10 years. You must intend to live in the property as an owner-occupier. This stream suits most people who have been renting and are entering the market for the first time, or re-entering after a significant gap.
The Single Parent Stream is more generous. It requires only a 2% minimum deposit and is available to single parents or legal guardians who have at least one dependent child. Importantly, you do not need to be a first home buyer to access this stream. If you previously owned a home and are now a single parent looking to buy again, you may still qualify. This stream was designed with real-life circumstances in mind, and the lower deposit threshold reflects the financial pressures many single-parent households face.
What You Can Buy
The scheme covers a broader range of property types than many people expect. Eligible purchases include established houses, townhouses, and apartments, as well as house and land packages, off-the-plan purchases, and vacant land where you intend to build. That flexibility is worth noting, particularly if you are considering a new build or cannot find an established property within your budget. You can explore a full breakdown of eligible property types and how the scheme applies to different purchase structures via Mozo’s scheme guide.
The 90-Day Pre-Approval Window
Once you receive pre-approval under the scheme, you have 90 days to find a property and sign a contract. This is a firm planning deadline, not a guideline. If your 90 days expire before you exchange contracts, your pre-approval lapses and you would need to reapply. Given how competitive the property market has become in some cities, it is worth treating this window seriously. Have your target suburbs and property type sorted before you apply, so you are not scrambling once the clock starts.
Price Caps Remain a Real Constraint
The scheme’s property price caps were raised in October 2025, but they remain a practical limitation for buyers in high-growth markets. Caps vary by location, covering capital cities, regional centres, and other areas differently. The challenge is that median house prices in Brisbane, Perth, and Adelaide each rose more than 12% in the year to March 2026, pushing some properties in those markets above the applicable cap. If a property’s purchase price exceeds the cap for your location, it is simply not eligible under the scheme, regardless of your deposit size or income. Apartments tend to sit more comfortably within caps across most cities, which is one reason many first home buyers using this scheme are looking closely at units alongside houses.
Help to Buy Scheme: Shared Equity Explained
The Help to Buy Scheme is the newest addition to Australia’s federal housing support programs, and honestly, it’s the one that causes the most confusion. Applications opened from 5 December 2025 in participating states and territories, which means it’s been available for a relatively short time. If you haven’t heard much about it yet, that’s completely understandable. It works quite differently from the 5% Deposit Scheme covered earlier, so it’s worth taking a proper look at how the shared equity model actually functions in practice.
How the Shared Equity Model Works
Rather than simply guaranteeing part of your loan, the government actually co-purchases the property with you under Help to Buy. The federal government can contribute up to 40% of the purchase price on a newly built home, or up to 30% on an existing home. Your minimum deposit drops to just 2%, and you only need a home loan covering the remaining portion of the purchase price. This significantly reduces both your upfront savings requirement and your ongoing monthly repayments.
To put that in concrete terms: if you’re buying an $800,000 existing home, the government could contribute $240,000 (30%), you’d put in $16,000 as your 2% deposit, and your loan would cover the remaining $544,000. You make repayments only on the $544,000, not the full $800,000. That’s a meaningful difference in your monthly budget. You can read through the full eligibility details on the Australian Government Help to Buy Scheme page if you want to explore the specifics further.
Scheme Places Are Limited
Unlike the 5% Deposit Scheme, which was expanded to become uncapped from October 2025, Help to Buy operates with firm limits. The scheme supports a total of 40,000 Australian households, with 10,000 places available each year. That’s a considerably smaller pool of support, so if this scheme suits your situation, moving quickly when places open is worth considering. Demand for first home buyer support has surged significantly since late 2025, so these annual allocations are unlikely to go unused.
Income Caps Apply Here
This is one of the clearest differences between Help to Buy and the 5% Deposit Scheme. Help to Buy is income-tested. To be eligible, your annual taxable income needs to sit at or below $100,000 if you’re applying as an individual, or $160,000 if you’re a single parent or applying jointly with someone else. These figures are assessed based on your most recent ATO Notice of Assessment. If your income sits above these thresholds, Help to Buy simply won’t be available to you, whereas the expanded 5% Deposit Scheme removed income caps entirely last October.
Not Every State Is Participating
Here’s something that catches buyers off guard: not all states have passed the enabling legislation required to participate in Help to Buy. The intergovernmental agreement is in force federally, but individual state participation depends on each state passing its own legislation. This means your eligibility can vary based purely on where you plan to buy. Before you factor this scheme into your purchasing strategy, confirm your state’s current participation status through the official government scheme information.
The Capital Gains Trade-Off
The most important long-term consideration with Help to Buy is understanding what happens when you sell or buy out the government’s equity share. Because the government holds a stake in your property, any capital gains are shared proportionally when you eventually sell or refinance out of the scheme. If your home rises significantly in value, the government’s repayment amount rises with it, calculated on the property’s value at the time of repayment, not the original contribution. In a rising market, that could mean repaying considerably more than the government initially contributed in dollar terms. It’s not a reason to avoid the scheme outright, but it is a financial reality that deserves careful thought before you commit.
First Home Super Saver Scheme (FHSSS): Using Super for Your Deposit
Here’s a scheme that most first home buyers overlook, even though it can meaningfully boost your deposit if you start early enough. The First Home Super Saver Scheme (FHSSS) lets you make voluntary contributions into your existing superannuation fund and then withdraw those contributions, plus associated earnings, when you’re ready to buy. Think of it as using your super account as a turbo-charged savings account for your deposit, rather than just leaving extra money sitting in a regular bank account earning minimal interest.
How the Contribution Limits Work
The numbers are straightforward once you break them down. You can contribute up to $15,000 per financial year in voluntary contributions that count toward the scheme, and the lifetime withdrawal cap is $50,000 per person. That means if you contribute the maximum each year, you can hit the cap in roughly three to four years. The key word here is “start early.” Someone who begins contributing at 28 or 29 can comfortably reach the $50,000 limit before they’re actively house hunting, giving them a solid deposit booster ready to go when they need it. You can check the ATO’s official FHSSS guidance to understand exactly how contributions are tracked and calculated.
The Tax Advantage That Makes It Worth Doing
This is where the FHSSS gets genuinely compelling. When you make concessional (pre-tax) contributions via salary sacrifice, those contributions are taxed at just 15% inside super, which is lower than most people’s marginal income tax rate. If you’re earning $85,000 a year, your marginal rate sits at 32.5%. By routing your savings through super instead of a regular savings account, you’re paying significantly less tax on that money as it accumulates. The ATO puts it simply: less tax equals more savings. On top of that, when you withdraw your funds, assessable amounts attract a 30% tax offset, which reduces your tax bill further at withdrawal time.
How the ATO Process Works
The FHSSS is administered entirely by the Australian Taxation Office, not your lender or any state government body. Before you can access your funds, you need to apply for an FHSS determination through your myGov account. This determination tells you exactly how much you’re eligible to withdraw. Crucially, you must receive this determination before settlement on your property. It’s not something you can leave until the last minute, so build this step into your purchase timeline well in advance. You can find the full eligibility criteria and application process at firsthomebuyers.gov.au.
Combining FHSSS With a Partner
One of the most underrated features of this scheme is how it works for couples. Each eligible person has their own $50,000 lifetime withdrawal cap, so if both you and your partner qualify and have been contributing, you could potentially access up to $100,000 combined from super toward your shared deposit. That’s a significant sum when you’re trying to hit a 10% or 20% deposit target on a property worth $600,000 or more.
It’s important to be clear about what the FHSSS is and isn’t. It won’t replace your full deposit on its own; it works best as one piece of a broader savings strategy alongside regular savings and, potentially, other government schemes like the 5% Deposit Scheme covered earlier. Also note that not every super fund supports FHSSS contributions equally, so confirm the details with your fund before you start contributing.
How to Stack Multiple Schemes at Once
Now that you understand each scheme individually, the real opportunity is in combining them smartly. Used together, these programs can dramatically reduce how much you need upfront and what you pay over the life of your loan. But stacking schemes requires some planning, and not every combination is allowed.
The FHSSS and the 5% Deposit Scheme: A Powerful Combo
This is probably the most useful pairing available to first home buyers right now. The FHSSS lets you build up to $50,000 in savings inside your super at a lower tax rate, and when you’re ready to buy, you withdraw those funds and put them toward your deposit. The 5% Deposit Scheme then steps in to guarantee the gap between your deposit and 20% of the property value, meaning you skip Lenders Mortgage Insurance entirely. So in practice, your FHSSS savings can cover all or most of your 5% deposit requirement, and the government guarantee handles the rest. That’s two federal programs working together to solve the two biggest upfront cost problems: saving the deposit and avoiding LMI.
State Grants Can Often Be Added on Top
Your state or territory may also offer a First Home Owner Grant (FHOG) and stamp duty concessions, and the good news is these generally can be stacked on top of federal schemes. A state grant doesn’t disqualify you from the 5% Deposit Scheme or the FHSSS. That said, state programs have their own eligibility rules around property type, purchase price, and whether the home is new or established, and those rules vary quite a bit depending on where you live. You’ll need to check your state revenue office separately because assuming you qualify for everything at once can lead to disappointment later in the process.
The One Combination That Doesn’t Work
Help to Buy and the 5% Deposit Scheme cannot be used on the same purchase. They’re structurally different programs: Help to Buy involves the government taking an actual equity stake in your property, while the 5% Deposit Scheme provides a guarantee behind the scenes without any government ownership. Because Help to Buy requires only a 2% deposit and covers up to 40% of a new build’s purchase price, it can be more powerful for buyers with smaller deposits and lower incomes, but it also comes with income caps and is only available in states that have passed enabling legislation. If you’re weighing the two, the right answer depends on your income, how much deposit you’ve saved, and what’s available in your state.
Getting the Order Right
Sequencing matters more than most people realise. If you’re combining the FHSSS with the 5% Deposit Scheme, you need to submit your FHSSS release request to the ATO before you formally apply for finance, because lenders will want to see your deposit funds. The ATO typically takes several weeks to process these requests, so building that lead time into your plan is important. Once your FHSSS funds are on their way, you can move into pre-approval under the 5% Deposit Scheme. State grant applications usually run alongside your finance approval stage rather than before it.
Why a Broker Makes a Real Difference Here
Not every lender participates in every scheme, and some lenders aren’t set up to handle applications that combine multiple programs at once. Working with a mortgage broker who knows the approved lender panels for each scheme means you’re not spending weeks applying to lenders who can’t actually help you. The MFAA highlights how the Home Guarantee Scheme continues to evolve, and brokers who stay across these changes are genuinely valuable when your application involves more than one moving part. A good broker won’t just find you a rate; they’ll map out which lenders can accommodate your full combination of schemes and keep your timeline on track.
Comparing Approved Scheme Lenders: What to Look For
Once you’ve confirmed you’re eligible for the 5% Deposit Scheme, the next decision matters more than most buyers realise: which lender you actually apply through.
Not every bank or lender in Australia is approved to offer the scheme. Access to the government guarantee flows exclusively through Housing Australia-approved Participating Lenders, and if your chosen lender isn’t on that list, the guarantee simply isn’t available to you through them. This makes lender selection a genuinely critical step, not something you can leave until after you’ve fallen in love with a property.
The Guarantee Is the Same, But the Loans Are Not
Here’s the part that trips people up. The government guarantee works the same way regardless of which approved lender you use. What changes dramatically is the home loan sitting underneath that guarantee. Approved lenders range from the major banks through to regional banks, customer-owned institutions, and non-bank lenders. Each of them sets their own interest rates, fees, offset account features, and borrowing capacity assessments independently.
That means two buyers using the exact same scheme, with the same deposit and the same income, can end up with very different loans depending on which approved lender they choose. The difference in interest paid over a 30-year loan can run into tens of thousands of dollars.
What to Actually Compare
When you’re assessing approved lenders side by side, here are the factors worth focusing on:
- Comparison rate, not just the advertised rate. The advertised rate looks attractive, but the comparison rate folds in fees and charges to give you a more accurate picture of what the loan actually costs.
- Offset accounts and redraw facilities. Not every scheme-approved lender includes an offset account on their low-deposit products. An offset account can reduce the interest you pay every single month, so its presence or absence is a big deal over the life of a loan.
- How borrowing capacity is calculated. Lenders apply different serviceability buffers and income assessment methods. The same applicant can receive a meaningfully higher or lower maximum loan amount depending on which approved lender they approach.
- Fees. Application fees, ongoing account-keeping fees, and discharge fees all vary. These can add up to thousands of dollars across the loan term.
- Cashback offers. Some lenders periodically run cashback incentives for new borrowers. Availability shifts frequently, so it’s worth checking what’s current at the time you apply.
The Shift Toward Approved Lenders Is Already Happening
Following the October 2025 scheme expansion, which removed income caps and lifted annual place limits, FHB demand at approved scheme lenders surged by +16.4% compared to the prior period. At the same time, demand at non-approved lenders dropped -6.5%. Buyers are voting with their feet, and they’re clearly choosing to concentrate their mortgage applications with lenders who can actually deliver the guarantee.
The federal government has also directed Housing Australia to actively promote diversity within the approved lender panel, including smaller regional banks and customer-owned institutions. That’s worth paying attention to, because the most competitive rate for your situation might not come from a major bank at all.
Compare Without Triggering Multiple Credit Enquiries
One practical problem with shopping around is that approaching multiple lenders directly can result in multiple credit enquiries on your file, which can affect your credit score. Ratebuster’s home loan comparison tool lists rates and features from a range of scheme-approved lenders in one place, so you can compare options side by side before committing to a formal application. It’s a straightforward way to do your homework without the credit footprint of knocking on five different bank doors.
What the Scheme Actually Saves You: Worked Repayment Examples
Let’s put real numbers to all of this, because the savings only become convincing when you can see them in dollars.
LMI Savings: The Immediate Win
Using the 2026 average first home buyer loan of $480,000 as a starting point, picture a buyer purchasing a $506,000 property with a 5% deposit of around $25,300. Without the scheme, that loan-to-value ratio would trigger Lenders Mortgage Insurance, typically costing somewhere between $15,000 and $20,000 on a loan of that size. That’s not a small number. It’s a cost the lender passes directly to you, and it doesn’t reduce your loan or build your equity. The scheme eliminates it entirely, effectively handing you that money back before you’ve even made your first repayment.
Monthly Repayments: 5% Deposit vs 20% Deposit
Here’s where buyers often get surprised. Taking that same $480,750 loan at a representative rate of 6.2% over 30 years, your estimated monthly repayment sits at around $2,940. A buyer with a full 20% deposit borrowing $404,000 at the same rate pays around $2,760 per month. That’s a difference of roughly $180 each month.
The real question isn’t whether $180 matters. It’s how long it would take you to save an extra $76,000 in deposit while rents keep rising and property prices potentially keep climbing. For most buyers, the maths favours entering the market earlier rather than waiting for a theoretically lower repayment.
FHSSS Tax Savings: Building Your Deposit Smarter
If you’ve been using the First Home Super Saver Scheme alongside the 5% Deposit Scheme, the numbers stack up further. Contributing $15,000 per year for three years and withdrawing the maximum $50,000 (inclusive of deemed earnings) at the 15% contributions tax rate, rather than your standard 32.5% marginal rate, produces a tax saving of approximately $8,750 over the savings period. That’s nearly $9,000 more in your deposit purely from redirecting how you save.
Help to Buy: The Biggest Loan Reduction
The Help to Buy numbers are the most dramatic of all. On a $600,000 new home, a buyer using a 5% deposit alone would borrow around $570,000. With the government contributing 40% equity, that loan shrinks to approximately $348,000, a reduction of $222,000 in principal. Lower principal means lower monthly repayments and stronger serviceability with lenders. It’s a material shift in what you can afford.
Every one of these scenarios changes based on your income, savings timeline, and the lender you choose. Use Ratebuster’s borrowing capacity calculator to plug in your own numbers, or explore the First Home Buyer Calculator to model repayments, LMI costs, and scheme eligibility side by side before you commit to a direction.
Co-Buying Under the First Home Buyers Scheme
Co-buying a first home has become the norm rather than the exception. Around 60% of first home buyers in 2026 are purchasing with someone else, whether that’s a partner, a close friend, or a sibling. It makes obvious sense given where property prices sit, and the good news is that Australia’s federal schemes are built to accommodate joint applicants.
Eligibility Rules for Joint Applicants
Under the 5% Deposit Scheme (First Home Guarantee), joint applications are fully supported, but there’s an important catch. Every applicant on the loan must individually meet the first home buyer criteria. If one person in your co-buying pair has previously owned residential property in Australia within the last 10 years under the General Stream, the entire application may be disqualified. This isn’t a minor technicality; it catches a lot of couples and friends who assume only one person’s history matters. Both do.
Under the Help to Buy Scheme, co-applicants face an income threshold of up to $165,000 combined (check the current figure at Help to Buy Scheme 2026: Income Caps, Eligibility, 2% Deposit before applying, as this figure has been subject to some variation across sources). The practical implication is straightforward: two applicants each earning around $80,000 would sit comfortably under that ceiling, while two applicants each earning $85,000 or more may not qualify depending on the operative cap at the time of application.
Ownership Structure: A Decision Worth Getting Right
How you hold the property legally is a separate question from how you split costs day to day, and it matters more than most buyers realise. Joint tenancy means both owners hold an equal, undivided share; if one owner dies, their share automatically passes to the survivor. Tenants in common allows unequal ownership splits and lets each person leave their share to whoever they choose in their will. The implications for capital gains tax, estate planning, and future borrowing capacity differ meaningfully between the two structures. Taking legal advice from a conveyancer before settlement is genuinely important here, not just a box-ticking exercise.
Co-Ownership Agreements for Friends and Siblings
If you’re buying with someone you’re not in a romantic relationship with, a co-ownership agreement drafted by a solicitor is worth every cent.This document should explain what happens when one party wants to sell, how both parties share responsibility for mortgage defaults, and how one person can buy out the other.
Without it, disputes can become expensive and genuinely complicated.
Regional vs. Metro Buying: Price Caps and Location Strategy
Where you choose to buy has a direct impact on whether the scheme actually works for you. Around one-third of first home buyers in 2026 are now searching outside their local area to find properties within reach, and of those, 81.9% are relocating within their state while 7.1% are making an interstate move. Affordability pressure is genuinely reshaping where people are willing to put down roots.
The 5% Deposit Scheme
applies tiered property price caps based on location, and understanding those tiers matters before you start seriously inspecting properties. Capital city and designated regional centre purchases attract higher caps, while “other areas” (broadly, rural and smaller regional towns) sit under lower caps. After the October 2025 expansion, New South Wales buyers in metro and major regional centres can purchase up to $1,500,000 under the scheme, while Queensland buyers in Brisbane can go up to $1,000,000. However, with Brisbane and Adelaide both recording median price growth above 12% in the year to March 2026, eligible stock in some suburbs is already thinning out, even at the higher caps.
Regional purchases
can actually work in your favour when it comes to grant stacking. Many states offer enhanced First Home Owner Grants or stamp duty concessions specifically for new builds in regional locations, meaning a buyer purchasing a house-and-land package in a regional town could layer a state grant on top of the federal guarantee. This is worth researching through your state’s revenue office before committing to a location.
One more thing worth noting: demand for lower-value loans (the bottom 25% of mortgage sizes nationally) grew +11.8% between October 2025 and March 2026, which directly reflects this regional and outer-suburb shift in action.
Lender availability in regional areas deserves its own attention. Not every approved scheme lender applies the same serviceability standards to smaller towns, rural-residential properties, or non-standard builds. Some lenders on the approved panel are cautious about properties in thin markets where valuations are harder to benchmark. Before you apply, it is worth confirming which lenders are actively approving loans in your target postcode, because a scheme pre-approval at one lender does not guarantee another will value the property at the same level.
How to Apply for the First Home Buyers Scheme
Knowing which scheme suits you is one thing. Actually getting through the application process is another. Here is a clear, step-by-step breakdown of how to apply, so you know exactly what to do and in what order.
Step 1: Confirm Your Eligibility
Before you do anything else, check that you actually qualify. Eligibility rules differ across the 5% Deposit Scheme, Help to Buy, and the FHSSS, so you need to confirm the specific criteria for whichever stream you are applying under. The official eligibility checker at firsthomebuyers.gov.au is a solid starting point, and Ratebuster’s scheme guide can help you cross-reference your situation before you speak to a lender. Key things to verify include your citizenship or residency status, whether you have previously owned Australian property, and, for Help to Buy, whether your income sits within the applicable cap.
Step 2: Apply to the ATO for an FHSSS Determination (If Using Super)
If you plan to use super savings as part of your deposit, this step must happen before you start searching for a property. The ATO needs to issue a formal determination confirming how much you are eligible to release, and this process can take up to 15 to 20 business days. Do not skip ahead to the property search while you are waiting, because you cannot sign a contract before the determination is in place. Apply through your myGov account via the ATO portal.
Step 3: Choose an Approved Lender and Get Pre-Approval
Only participating lenders can offer the 5% Deposit Scheme guarantee, so your lender choice matters. Once you receive pre-approval, you have a 90-day window to find a property and sign a contract. Rates and loan features differ across approved lenders, so it pays to compare before you commit. Ratebuster’s lender comparison tool is a useful way to review your options side by side without having to approach multiple lenders individually.
Step 4: Search Within Your Price Cap
Every location has a specific property price cap under the 5% Deposit Scheme. If the property you want exceeds that cap, the government guarantee does not apply. At that point, you would need to negotiate the purchase price down, look at alternative properties, or proceed with a standard loan and pay LMI. Check the current cap for your target suburb before you fall in love with a listing.
Step 5: Apply for Your State Grant or Stamp Duty Concession
Federal scheme applications and state-based grants run as separate processes, but they happen at roughly the same time. Your lender or conveyancer will typically lodge any applicable First Home Owner Grant or stamp duty concession application on your behalf as part of the settlement paperwork. Make sure you flag this early so nothing gets missed before settlement day.
Step 6: Sign the Contract and Proceed to Settlement
Once you have found a property within your price cap and within your 90-day pre-approval window, you sign the contract of sale and move toward settlement. Your lender handles all of the Housing Australia guarantee paperwork on your behalf, so you do not need to manage that process directly. The key is staying within your pre-approval timeframe and keeping your lender updated if anything changes during the property search.
Frequently Asked Questions
Can I use the 5% Deposit Scheme if I earn a high income?
Yes, absolutely. As of 1 October 2025, income caps were completely removed from the 5% Deposit Scheme. Previously, individual applicants were capped at $125,000 and joint applicants at $200,000 per year. Those limits no longer apply. As long as you meet the citizenship, residency, and prior ownership criteria, your income is no longer a barrier. One important distinction: the Help to Buy Scheme still has income caps of $103,000 for individuals and $165,000 for joint applicants, so the two schemes work differently on this point.
What happens if I cannot find a property within 90 days of pre-approval?
Your scheme pre-approval lapses and you will need to reapply. This is worth taking seriously. In competitive capital city markets, properties move quickly, and a 90-day window can pass faster than you expect. The moment your pre-approval comes through, treat your property search as urgent. Prepare your checklist, research your target suburbs and act quickly when the right property comes onto the market.
Does the 5% Deposit Scheme affect how much I can borrow?
The scheme itself does not change your borrowing capacity at all. Lenders still assess your income, living expenses, and existing debts the same way they would for any home loan application. What changes is the size of your loan. A 5% deposit on a $700,000 property means borrowing $665,000 rather than the $560,000 you would borrow with a 20% deposit. Larger loan, larger repayments. The scheme removes the LMI cost, but it does not reduce what you owe the lender.
Can a permanent resident use the first home buyers scheme?
Permanent residents are eligible for the 5% Deposit Scheme. New Zealand citizens holding a special category visa may also qualify. Temporary visa holders are generally not eligible. The Help to Buy Scheme applies stricter eligibility rules, requiring every applicant to hold Australian citizenship and excluding permanent residents.
Is the Help to Buy Scheme available in my state?
The Help to Buy Scheme opened nationally from 5 December 2025, but full participation depends on each state and territory passing its own enabling legislation. The intergovernmental agreement is in force, but the legislative status varies by state. Before applying, check the current participation status directly with Housing Australia or through an approved scheme lender to confirm your state is fully operational.
Can I use the first home buyers scheme to buy an investment property?
No. All three federal schemes, the 5% Deposit Scheme, Help to Buy, and the First Home Super Saver Scheme, are restricted to owner-occupiers only. The property must be your principal place of residence, and you are required to move in within a specified timeframe after settlement. Under Help to Buy, the owner-occupier obligation continues for the entire duration of your participation in the scheme. If you purchase as an investor, you will not be eligible for any of these programs.
Key Takeaways for First Home Buyers
The October 2025 expansion changed everything for first home buyers. No income caps, unlimited scheme places, and higher property price caps mean the barrier to entry is lower than it has ever been. Demand at approved lenders surged 16.4% between October 2025 and March 2026, which tells you that buyers are paying attention.
The most powerful move available to most buyers is combining the FHSSS, the 5% Deposit Scheme, and a state grant together. The sequencing matters, though. Always secure your ATO determination first before applying for the scheme or signing a contract.
Lender choice is just as important as scheme eligibility. Rates and loan features vary meaningfully across approved lenders, and even a small rate difference on a $480,000 loan compounds into thousands of dollars over a 30-year term.
Ratebuster’s home loan comparison tool lets you filter specifically by scheme-approved lenders and compare current rates side by side, so you can find the most competitive option for your situation before you commit to an application.
Conclusion
Buying your first home in Australia does not have to feel out of reach. Combine the First Home Buyers Scheme with grants and stamp duty concessions to significantly reduce your upfront costs.
Eligibility requirements are straightforward, the application process is manageable, and stacking multiple incentives together can save you thousands of dollars.
Here is what to take away: know your eligibility, understand which schemes apply in your state, and never leave free government money on the table.
Your next step is simple. Speak with a mortgage broker or visit your state revenue office to confirm what you qualify for today. The property ladder is closer than you think, and the right support is already there waiting for you. Your first home is not just a dream; it is a goal with a clear path forward. Now go take the first step.
