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The different ways first home buyers can buy a home in Australia 

Many first home buyers assume there is only one path into the property market. Save a large deposit, apply for a standard home loan, and hope your income stretches far enough. That is one way to buy a home, but it is not the only one. Depending on your income, your savings, your family situation and whether you are buying alone or with someone else, there are several different paths worth understanding before you decide which one fits you. 

Buying with a standard home loan and deposit 

This is the traditional route. You save a deposit, usually aiming for 20% of the purchase price to avoid lenders mortgage insurance (LMI), and apply for a home loan through a bank or broker. If you have less than 20% saved, you can still buy. You will generally pay LMI, which protects the lender if you default, not you. 

This path gives you full ownership from day one and the most flexibility over which lender and loan type you choose. It usually takes the longest to prepare for, since a 20% deposit on an average home can take years to save. 

Buying with a 5% deposit through the First Home Guarantee 

The First Home Guarantee lets eligible first home buyers purchase with a deposit as low as 5%, without paying LMI. The government guarantees the difference between your deposit and the standard 20%, so the lender is protected and you avoid a cost that can otherwise add tens of thousands of dollars to your loan. 

More than 320,000 people have become homeowners through this scheme and similar predecessors since 2020, and demand has remained strong through 2026 even as other buyer groups have pulled back from the market. Properties are eligible up to price caps that vary by region, and eligibility is now open to buyers regardless of income after caps were removed in October 2025. You can find more on this in the Penny app if you want to check whether your income, property and location qualify. 

Buying with a shared equity loan through Help to Buy 

Help to Buy is a federal shared equity scheme. The government contributes up to 40% of the purchase price for a new home, or 30% for an existing home, in exchange for taking that share of equity in your property. This can reduce your deposit to as little as 2% and lower your monthly repayments, since you are only borrowing against your own share of the home. 

To be eligible, you generally need to earn no more than $103,000 as an individual or $165,000 as a couple or single parent, be an Australian citizen aged 18 or over, and not currently own property. Property price caps apply and vary significantly by state, from around $600,000 in parts of Western Australia and the Northern Territory to $1,300,000 in Sydney and regional New South Wales centres. 

You repay the government’s share over time, either through voluntary payments or when you sell. Almost seven in ten Help to Buy participants have been single applicants, and the median deposit among buyers using the scheme has been around $30,000. You can find more on this in the Penny app, including how the equity repayment works. 

State grants and stamp duty concessions 

Alongside the federal schemes above, every state and territory runs its own First Home Owner Grant and stamp duty concessions, and these can generally be combined with a federal scheme like the First Home Guarantee or Help to Buy. The details differ significantly depending on where you live and whether you are buying a new or established home. 

As a general guide, Queensland currently offers the largest cash grant at $30,000 for new homes up to $750,000, while Tasmania also offers $30,000 with no price cap. New South Wales and Victoria both offer $10,000 grants for new homes, alongside separate stamp duty exemptions for buyers under set price thresholds. The ACT does not offer a cash grant but provides a duty concession through its Home Buyer Concession Scheme instead. Most First Home Owner Grants apply only to new homes, not established properties, while stamp duty concessions are often available on both. 

Because these schemes change from budget to budget, it is worth checking your state or territory revenue office directly for the current amount and price cap before you rely on a specific figure. You can find a state-by-state breakdown in the Penny app. 

Buying with help from family 

A family guarantee, sometimes called a guarantor loan, lets a parent or close family member use the equity in their own home as additional security for your loan. This can allow you to borrow up to 100% of the purchase price without paying LMI, because the lender has extra security beyond your own deposit. 

This path depends entirely on having a family member willing and able to offer their property as security, and it carries real risk for them if you are unable to make repayments. It is worth having a clear conversation, and ideally getting independent legal advice, before you go down this path together. 

Buying with someone other than a partner 

Buying with a sibling, a friend, or another family member is becoming a more common way for single-income buyers to enter the market. Combining two incomes and two deposits increases your borrowing capacity and can make a wider range of properties realistic. This path requires a written agreement covering what happens if one person wants to sell, refinance, or can no longer afford their share, since informal arrangements can become complicated if circumstances change. 

Rentvesting 

Rentvesting means buying an investment property in a location you can afford, often outside the area you actually want to live in, while continuing to rent where you prefer to be. This lets you get onto the property ladder and start building equity sooner, without needing to compromise on your current lifestyle or commute. It comes with the responsibilities of being a landlord, and you will not get the first home buyer grants or exemptions that apply when you buy a property to live in yourself. 

Boosting your deposit first 

The First Home Super Saver Scheme is not a separate way to buy, but it can make any of the paths above more achievable. It lets you make voluntary contributions into your superannuation and withdraw them later, along with associated earnings, to put towards your first home deposit. Because super contributions are taxed concessionally, this can help you build a deposit faster than saving in a standard bank account. You can find more on how much you can contribute and withdraw in the Penny app. 

Thinking through the right path for you 

None of these paths is automatically the best choice. The right one depends on a few honest answers about your own situation: 

  • How much have you actually saved, and how soon do you want to buy?  A smaller deposit narrows you toward the First Home Guarantee or Help to Buy rather than the traditional 20% route. 
  • Are you buying alone or could you buy with someone else? A co-buyer or a family guarantee can materially change what is realistic, but only if everyone involved understands the commitment. 
  • Do you want full ownership from day one, or are lower repayments more valuable right now? This is the core trade-off with a shared equity scheme like Help to Buy. 
  • Are you set on living in the property, or open to rentvesting first? If location and lifestyle matter more than owning where you live, rentvesting might get you into the market sooner. 
  • Have you checked what your state offers on top of the federal schemes? Grants and stamp duty concessions can change the numbers significantly and are easy to overlook. 

Working through these questions honestly is a more useful starting point than picking a path based on what worked for a friend or family member, since your income, deposit and goals are your own. 

Find your path in the Penny app 

The Penny app is built to help you work through exactly this decision, matching your income, savings and goals against the schemes and paths available to you right now. If you are not sure where you stand, open the app and start with your numbers rather than guessing which option fits. 

This article is general information only and does not take into account your personal financial situation. It is not financial advice. Consider speaking with a licensed mortgage broker or financial adviser before deciding how to structure your home purchase. 

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