Top 10 Resources Every First Home Buyer Needs

Buying your first home means working through deposit requirements, government schemes, lender eligibility rules, and tax concessions that vary by state.

The confusion isn't the number of options. It's knowing which ones apply to your situation and which ones you can combine. Site reliability engineers in particular often face questions around how variable income from bonuses or equity vesting affects deposit requirements and loan applications.

Australian Government 5% Deposit Scheme

The Australian Government 5% Deposit Scheme allows eligible buyers to purchase with a 5% deposit, and single parents or legal guardians can enter with 2%. Housing Australia guarantees the difference between your deposit and 20% of the property value, which removes the need for lenders mortgage insurance.

Applications go through a participating lender panel of 31 lenders. No income caps apply, and there are no annual place limits. Property price caps vary by location: Sydney sits at $1,500,000, Melbourne at $950,000, and Brisbane at $1,000,000. Regional caps were also increased from October last year.

Consider a buyer who has saved a 5% deposit through a combination of salary and vested RSUs. The scheme allows them to move forward without waiting to accumulate the additional 15% that most lenders would otherwise require to avoid LMI. The deposit can include genuine savings, gifted funds from immediate family, or equity from vesting stock, depending on the lender's policy. More detail on how RSUs and bonuses work as genuine savings is covered separately.

Help to Buy Scheme

Help to Buy is an equity-sharing program where the Australian Government contributes up to 40% of the purchase price for a new home or up to 30% for an existing home.

The minimum deposit is 2%. Income limits are $100,000 for individuals and $160,000 for joint applicants or single parents. Property price caps vary by location. The program is available in New South Wales, Victoria, Queensland, South Australia, the Australian Capital Territory, the Northern Territory, and Western Australia. Tasmania has opted out.

You cannot combine Help to Buy with the 5% Deposit Scheme, but you can generally use it alongside state-based grants and stamp duty concessions depending on the jurisdiction. The equity stake held by Housing Australia is proportional to the contribution, so if the government contributes 30% and the property increases in value, they are entitled to 30% of that gain when you sell or refinance.

State-Based Stamp Duty Concessions

Stamp duty concessions reduce or remove transfer duty for eligible first home buyers, and the rules differ sharply between states.

In New South Wales, a full exemption applies to properties up to $800,000, with a sliding concession between $800,000 and $1,000,000. In Victoria, full exemption applies up to $600,000, with concessions phasing out at $750,000. Queensland offers nil transfer duty up to $700,000 on established homes, with a concession extending to $800,000.

South Australia provides a full concession on new homes and vacant land with no price cap. Western Australia recently expanded its concessions to apply up to $700,000 in the Perth Metropolitan and Peel regions and up to $750,000 outside those regions.

The Australian Capital Territory removed both the property value limit and the income threshold from 1 July this year. Eligible buyers are now fully exempt from conveyance duty regardless of the property value or household income, provided they meet the other eligibility requirements.

Tasmania ended its full duty exemption for established homes from 1 July. No equivalent exemption for existing properties is currently in place under Tasmanian law.

First Home Owner Grants

First home owner grants provide a direct cash payment to eligible buyers, but they typically apply only to new homes.

New South Wales, Victoria, and Western Australia each offer $10,000 for new builds. Queensland offers $15,000 for new homes valued under $750,000 for contracts signed from 1 July this year. South Australia also offers $15,000 with no property price cap for contracts entered into from June last year. Tasmania offers $20,000 for new homes from 1 July, subject to assent.

The Northern Territory offers the HomeGrown Territory Grant of $50,000 for new homes for contracts signed by 30 September next year. This is the largest state-based grant currently available.

The grants do not apply to established homes in most jurisdictions. They are paid after settlement and can be used to reduce your loan balance or cover immediate post-settlement costs. More information on buying your first home and how these grants fit into your overall deposit structure is covered on our site.

Pre-Approval and Application Process

Pre-approval confirms your borrowing capacity before you start searching for a property.

Lenders assess your income, expenses, existing debts, and deposit to determine how much they are willing to lend. Pre-approval is conditional on the property you choose and on your financial circumstances remaining unchanged. It typically lasts 90 days, though some lenders offer longer.

For site reliability engineers with income that includes base salary, bonuses, and equity, lenders treat each component differently. Base salary is straightforward. Bonuses are usually assessed at 50% to 80% of the average over the past two years, depending on the lender. Vested equity is treated as genuine savings or additional deposit, but unvested equity is not counted.

The application process involves providing payslips, tax returns, bank statements, and evidence of your deposit source. If you are using the 5% Deposit Scheme or Help to Buy, the application goes through a participating lender who coordinates with Housing Australia on your behalf. You cannot apply directly to Housing Australia. Getting loan pre-approval is covered in more detail elsewhere.

Fixed and Variable Interest Rate Options

Your interest rate structure affects both repayments and flexibility.

A fixed interest rate locks in your rate for a set period, usually one to five years. Repayments remain constant during that period, which makes budgeting more predictable. However, fixed loans typically have restrictions on extra repayments, limited offset account access, and break costs if you exit early.

A variable interest rate moves with the market. Repayments change when the lender adjusts rates, but you retain full access to offset accounts, unlimited extra repayments, and the ability to refinance without break costs.

Many first home buyers split their loan, fixing a portion for stability and leaving the rest variable for flexibility. A 50/50 split is common, but the exact ratio depends on your risk tolerance and cash flow. Getting a lower interest rate once your loan is established is something worth reviewing regularly.

Offset Accounts and Redraw Facilities

An offset account is a transaction account linked to your home loan. The balance in the offset account reduces the loan balance on which interest is calculated.

If your loan balance is $500,000 and your offset account holds $50,000, you only pay interest on $450,000. The offset balance remains fully accessible, which makes it a flexible tool for managing cash flow.

A redraw facility allows you to withdraw extra repayments you have made on your loan. Not all lenders offer redraw on all loan products, and some impose limits on the number of withdrawals or charge fees.

Offset accounts are more flexible than redraw because the funds are held separately and are not subject to lender approval for access. If your income includes irregular bonuses or vesting schedules, an offset account allows you to park funds and reduce interest without locking them into the loan.

Low Deposit Options and Lenders Mortgage Insurance

Lenders mortgage insurance is a one-time premium charged when your deposit is below 20%. LMI protects the lender if you default, not you.

The cost varies based on your deposit size and loan amount. A 5% deposit typically attracts a higher LMI premium than a 10% deposit. The premium can be added to your loan balance rather than paid upfront.

The 5% Deposit Scheme removes the need for LMI by using a government guarantee in place of the insurance. Some lenders also offer LMI waivers for certain professions, though eligibility criteria vary. Low deposit loans for tech industry workers and no LMI loans for tech industry workers are both covered separately.

First Home Super Saver Scheme

The First Home Super Saver Scheme allows you to make voluntary contributions to your superannuation fund and later withdraw those contributions, along with associated earnings, to use as a deposit.

You can contribute up to $15,000 per financial year, with a total cap of $50,000 per person. Contributions are taxed at the concessional superannuation rate of 15%, which is lower than most marginal income tax rates. When you withdraw the funds, they are taxed again, but the combined tax is usually still lower than if you had saved the same amount outside super.

The scheme works well if you are planning to buy in the next few years and can afford to make additional super contributions. It does not work if you need access to your deposit immediately. The withdrawal must be used for a deposit on a property you intend to occupy as your principal place of residence. Timing matters, because you need to allow for processing and approval from the Australian Taxation Office before settlement.

Combining Federal and State Schemes

You can usually combine the 5% Deposit Scheme with state-based stamp duty concessions and first home owner grants.

In a scenario where a buyer uses the 5% Deposit Scheme to purchase a new home in Queensland, they can also claim the $15,000 first home owner grant and benefit from the stamp duty concession on new builds. The schemes operate independently, so eligibility for one does not prevent access to the others.

Help to Buy cannot be combined with the 5% Deposit Scheme, but it can be used alongside state grants and concessions in most jurisdictions. The restriction exists because both programs involve Commonwealth guarantees or equity contributions, and combining them would create overlapping exposure.

Restrictions vary by jurisdiction and program, so checking eligibility for each scheme before proceeding is necessary. The 5% Deposit Scheme for tech industry workers page covers the federal program in more detail, and the Help to Buy Scheme page does the same for the equity-sharing option.

Call one of our team or book an appointment at a time that works for you. We work with site reliability engineers regularly and understand how bonuses, equity, and variable income affect loan applications and deposit requirements.

Frequently Asked Questions