Buying your first home right now feels… confusing.

Prices are high. The rules keep changing. And depending on who you ask, it’s either the worst time to buy, or the best time in years.  

The reality is, the landscape is changing, and first home buyers are in a stronger position than they’ve been in years.

Policy uncertainty around CGT and negative gearing has many investors hesitating, while low-deposit government schemes, expanded eligibility, and new pathways are actively pulling first home buyers in.

And it’s already showing in the numbers:

• Around 1 in 3 first home buyers are now using a government scheme to get in sooner
• Women are leading uptake, making up 54% of buyers using these schemes

So if anything, now’s the time to get clear on your numbers, your options, and what buying a first home could realistically look like for you.

You can start with understanding how much deposit you actually need. This is one of the most common, and most misunderstood questions we hear from first time buyers.

The number you always hear: 20%

You’ve probably heard that you need a 20% deposit to buy a home. And yes, 20% is the magic number that gets you a home loan without paying Lenders Mortgage Insurance (LMI). With 20% you’re borrowing less, which means smaller repayments over time, and you’re more likely to access more competitive interest rates, because lenders see you as a lower-risk borrower.

But here’s the thing: 20% is not the only way to enter the market. For many people, it will take years to save and this delay comes with a trade-off: rising property prices, higher rents, and feeling like the goalpost keeps moving.

This is where low-deposit options are changing the game for many women buying their first home.

You can buy with much less: 5% (sometimes 2%)

Under the expanded First Home Guarantee Scheme, eligible first home buyers can purchase with as little as a 5% deposit, and the government guarantees the remaining 15%, so you don’t pay LMI. As of October 2025, the scheme removed income caps and the annual place limit, meaning all eligible first home buyers can apply.

Some schemes go even lower. If you’re a single parent or eligible carer, the Family Home Guarantee allows entry with just 2% deposit.

So the real question isn’t “do I have 20%?” It’s “do I have enough to responsibly access the scheme that works for me?”

What is LMI and why should you care?

Lenders Mortgage Insurance is one of those costs that don’t get explained well. It’s in insurance you pay that protects the lender (not you) if you default on your loan, and it’s not cheap. On a $600,000 property with a 10% deposit, LMI could run you anywhere from $8,000 to $15,000+, depending on the lender and loan amount.

LMI can be added to your loan, which means you pay interest on it over time, or paid upfront.
Here’s where it gets nuanced: LMI isn’t always the enemy. For some buyers, paying LMI now to get into the market sooner (before prices rise further) can actually make financial sense. But that’s a calculation worth doing with a mortgage broker, not just assuming either way.

The deposit you need vs the deposit you should have

This is the distinction most people miss, and it genuinely matters.

The deposit you need is the minimum required to get a loan approved, as low as 5% in some cases.

The deposit you should have also covers all the extra costs, including:

• Stamp duty – varies by state and property value, and can be $0 (if you’re eligible for a first home buyer exemption or concession) or tens of thousands of dollars. Check your state’s rules. This is not the place to be surprised.
• Conveyancing fees – typically $1,500–$3,000 for a lawyer or conveyancer to handle the legal side of your purchase
• Building and pest inspection – around $400–$700, and absolutely worth it. We cannot stress this enough.
• Loan application fees – some lenders charge these, many don’t
• Moving costs – often the last thing people budget for, and then it stings
• A buffer – ideally 2–3 months of mortgage repayments sitting in reserve after you settle, so you’re not immediately in “emergency mode” if something comes up.

A general rule of thumb: budget an additional 3–5% of the purchase price on top of your deposit for these upfront costs. So on a $600,000 property, you might need $30,000–$50,000 in your deposit plus another $18,000–$30,000 for costs.

This is why having a really clear picture of your numbers before you start seriously house-hunting is so important.  The Penny app helps you manage all your costs and budget in one place.

The First Home Super Saver (FHSS) Scheme: a secret weapon

Another scheme worth looking into is the FHSS Scheme, which lets you make voluntary contributions to your superannuation and then withdraw them (up to $50,000 in total) to use as a home deposit.

Because super contributions are taxed at just 15%, rather than your marginal rate, you save money on tax while you save your deposit. For most people, this is a more tax-effective way to save than a regular bank account.

To be eligible you need to apply to the ATO, your contributions need to have been made specifically under the scheme, and you need to intend to live in the property. A financial adviser can help you set this up properly and make sure you’re getting the most out of it.

So what’s your number?

Here’s a simple way to start working it out:

1. Pick a realistic target purchase price for your income and the area where you’re looking
2. Calculate 5% of that (your minimum deposit under the First Home Guarantee) or 20% (to avoid LMI without a scheme.
3. Add 3–5% for upfront costs
4. Subtract what you have already saved
5. The gap = what you still need to save, and how long it’ll take

If that number feels enormous, don’t panic. That’s what Penny is here for: to help you work through it, find the schemes you might be eligible for, and connect you with a mortgage broker who can give you a clear, personalised picture.

You don’t need to have it all figured out to start. You just need to start.

Find the tools and resources you need to calculate your deposit in the Penny app.
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This article is general information only and not financial advice. For eligibility criteria for government schemes change, always verify current rules at housingaustralia.gov.au and speak with a licensed mortgage broker before making decisions.