First Home Buyer Loans: Everything You Need to Know in 2025
Buying your first home is a major milestone — and one of life's biggest financial decisions. Between saving for a deposit, navigating government grants, and comparing home loans, it's easy to feel overwhelmed. This guide is here to make things simple.
Getting started
Whether you're just starting to plan or actively searching for a property, we'll walk you through everything you need to know about first home buyer loans in 2025 — especially if you're buying in NSW. With the right guidance, you could be holding your keys sooner than you think.
First Home Buyer Benefits
Government Grants
Access up to $10,000 in grants plus stamp duty exemptions and concessions available in NSW.
Low Deposit Options
Buy with as little as 5% deposit through the First Home Guarantee and avoid LMI.
LMI Protection
Skip Lenders Mortgage Insurance costs and save thousands on your home purchase.
Guided Process
Step-by-step support from pre-approval to settlement with expert first home buyer guidance.
What Is a First Home Buyer Loan?
A first home buyer loan is a type of home loan tailored for Australians purchasing their first residential property. While the process is similar to a standard loan, first-time buyers often have access to special support — including government grants, stamp duty concessions, and low-deposit schemes.
Many lenders also offer flexible loan options or reduced fees for first-home buyers, helping you get into the market sooner with less upfront cost.
Who Qualifies as a First Home Buyer?
You're generally considered a first home buyer if:
- You've never owned residential property in Australia
- You plan to live in the property (not just rent it out)
- You're an Australian citizen or permanent resident
If you're buying with a partner, both applicants typically need to meet these criteria to access grants and schemes. However, some programs may allow individual eligibility — so it's worth checking your specific situation.
Even if your partner previously owned property, you may still qualify for some benefits if you're buying alone.
Grants and Schemes for First Home Buyers in NSW
There's good news if you're buying in New South Wales — a range of support programs can help reduce your upfront costs and get you into a home faster.
First Home Owner Grant (FHOG) NSW
- Provides a $10,000 grant for buying or building a new home
- Available for properties up to $600,000 (or $750,000 for house-and-land packages)
- Only applies to new builds or substantially renovated homes
Stamp Duty Exemptions and Concessions
- No stamp duty on homes under $800,000
- Discounted rates for properties valued up to $1 million
- Applies to both new and existing homes (as of 2025 changes)
First Home Guarantee (National Scheme)
- Buy with just a 5% deposit
- No need to pay Lenders Mortgage Insurance (LMI)
- Limited spaces available through participating lenders
Warning: These schemes have eligibility criteria and limited availability. Applying early in the financial year can increase your chances.
How Much Deposit Do You Need?
Traditionally, lenders have preferred a 20% deposit. But as a first-home buyer, you have more flexibility — especially with government support.
It's now possible to buy with as little as 5% deposit, especially if you're eligible for the First Home Guarantee or using a guarantor loan. However, a lower deposit often comes with higher repayments or additional insurance unless you qualify for an exemption.
Example deposit breakdowns:
| Property Price | 5% Deposit | 20% Deposit |
|---|---|---|
| $600,000 | $30,000 | $120,000 |
| $750,000 | $37,500 | $150,000 |
| $900,000 | $45,000 | $180,000 |
Aim to save more than just the deposit. Upfront costs like legal fees, inspections, and moving expenses can add several thousand dollars.
What Is LMI and How Can You Avoid It?
Lenders Mortgage Insurance (LMI) is a one-off fee charged when you borrow more than 80% of the property's value. It protects the lender if you default on your loan — but it doesn't benefit you directly.
LMI can cost anywhere from $10,000 to $30,000+, depending on the size of your loan and deposit.
Ways to avoid LMI:
- Save a 20% deposit
- Apply for the First Home Guarantee
- Use a family member as a guarantor
Even if you can't avoid LMI entirely, a broker can help you minimise the cost or find alternative paths.
Step-by-Step: The First Home Buying Process
Here's a simple breakdown of the process from planning to settlement:
1. Set Your Budget and Start Saving
Use a borrowing calculator to estimate what you can afford. Then create a savings plan, aiming for at least a 5–10% deposit.
2. Get Pre-Approved
A pre-approval shows sellers you're serious and gives you a clear idea of your borrowing limit. It's usually valid for 3–6 months.
3. Apply for Grants and Schemes
Once you've found a property, your broker or lender can help you apply for any eligible grants or support programs.
4. Find the Right Property
Stay within your budget and consider location, property condition, and long-term growth. Don't forget to factor in stamp duty (unless exempt) and other purchase costs.
5. Finalise Your Loan and Settle
Once your offer is accepted, your lender will process final approval and prepare for settlement. You'll sign your contract, pay your deposit, and get ready to move in.
Example: A young couple in Parramatta used the First Home Guarantee to buy a $720,000 townhouse with just $36,000 deposit and saved over $14,000 by avoiding LMI.
Tips for First Home Buyers in 2025
- Check your credit score and clear any outstanding debts
- Understand all your costs — including legal fees, building reports, and moving expenses
- Don't just compare interest rates; look at fees, features, and total loan cost
- Use an offset account to reduce interest over time
- Consider getting advice from a broker — they'll help you compare loans and navigate the process
Many buyers forget about costs like pest inspections or strata reports. Budgeting for these early helps avoid nasty surprises later.
How Stryve Can Help You Buy Your First Home
At Stryve, we specialise in guiding first-home buyers through every step of the journey. Whether you're still saving or ready to buy, we can help you:
- Understand your borrowing power
- Compare home loans from over 30 lenders
- Apply for eligible grants and schemes
- Avoid costly mistakes like unnecessary LMI
- Support you all the way to settlement
We know what banks are looking for — and how to make your application stand out.
Frequently Asked Questions
Do I need a 20% deposit to buy my first home?
No — you can buy with as little as 5% if you're eligible for the First Home Guarantee or use a guarantor.
How much can I borrow as a first-home buyer?
That depends on your income, debts, credit history, and deposit. A broker can help you calculate this accurately.
Can I buy with someone else?
Yes — buying with a partner or family member can increase your borrowing power. Just be aware that both parties must meet eligibility criteria for grants.
Is it better to use a bank or a broker?
A broker compares multiple lenders and can help you access better deals — especially if you're new to the process.
How long does the loan approval process take?
Pre-approval can take 1–3 days. Full approval usually takes 1–2 weeks once you've found a property.
Ready to Take the First Step?
Buying your first home doesn't have to be confusing. At Stryve, we're here to simplify the process and help you feel confident from day one.
Book a free consult with one of our friendly brokers today — and let's talk about how you could buy with just a 5% deposit.