3 simple tactics for first homebuyers to help break in

By Cameron Thomson · · 3 min read
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Housing, first home, first home buyers, home savings

With housing affordability feeling more out of reach for first home buyers, many wonder how they can actually get into the housing market. 

It’s no wonder then, that most people are looking for ways in - a pathway, so to speak. Thankfully, if you’re a first home buyer, there are some tactics you can leverage. 

First, does my home loan deposit have to be 20%?

The general rule of thumb is to save up for a 20% deposit, the difference in a typical LVR - loan-to-value ratio. In short, most lenders will give borrowers a loan that’s worth up to 80% of the property’s value. That being said, when house prices are soaring in most of the capital cities, even 20% can feel like an insurmountable amount. 

The question is, do you actually need 20%? If you’re a first home buyer, you might be able to save up only 5% of a home’s value for that initial deposit and some providers offer specialised home loans with this flexibility. 

Keep in mind that with a lower initial deposit that your monthly repayments will be higher than if you had a bigger initial deposit. Make sure to calculate your monthly repayments so that you know you can meet your loan repayments.

Government support for first home buyers

If you’re a first home buyer, you can apply for the government backed First Home Buyers Guarantee (FHBG) which can guarantee a loan as little as 5%. Part of the advantage of the FHBG is that, even with a loan-to-value ratio below 20%, you can be exempt from paying Lenders Mortgage Insurance (LMI).

Also, keep in mind that you may have access to state or territory specific schemes. Some of the schemes you can apply for are:

State/TerritoryWhat it's calledWhat you get
NSWFirst Home Buyer Assistance SchemeYou may get either a reduction or exemption from stamp duty.
ACTHome buyer concession schemeYou can save up to $34,790 (2022 to 2023 numbers).
VictoriaFirst Home Owner Grant$10,000 for new homes bought or built in Victoria valued at $750,000 or less.
QueenslandFirst Home Owner Grant$15,000 grant for building or buying your new home valued at $750,000 or less.
South AustraliaFirst Home Owner Grant$15,000 grant for a new or substantially renovated property worth less than $575,000
Western AustraliaFirst Home Owner Grant$10,000 grant for a new or substantially renovated property.
TasmaniaFirst Home Owner Grant$30,000 for building or newly built property.
Northern TerritoryFirst Home Owner Grant$10,000 for a new home.

Make sure to check that you meet the eligibility requirements and the dates for when these schemes finish. 

Superannuation home saver scheme

Not sure where to put the savings for your home loan deposit? While a high interest savings account is a great option, utilising the tax advantaged environment from your superannuation might be another good option. 

Essentially, the first home super saver (FHSS) scheme allows you to make either before or after tax contributions to your super that sit in your fund and grow until you’re ready to withdraw and pay for that house. 

It’s worth mentioning that there are some terms and conditions, so check that you’re eligible to apply. Also, you’ll be limited to $15,000 worth of contributions every financial year and a total balance of $50,000. On top of this, deposits made through before tax salary sacrifice are taxed at 15 per cent while any after-tax contributions are not taxed. 

Having considered these tactics, are you ready to get your first home loan? Here at Mozo we let you compare between home loan providers so that you can get the loan that works for you.

Home loan comparisons on Mozo

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Last updated 27 July 2024 Important disclosures and comparison rate warning*

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  • Basic Home Loan

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    • LVR 90-95%
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    Interest rate
    7.19 % p.a.
    Variable
    Comparison rate
    7.22 % p.a.
    Initial monthly repayment
    $4,747
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  • OMG Home Loan

    • Owner Occupier
    • Principal & Interest
    • >80% LVR
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    6.29 % p.a.
    Variable
    Comparison rate
    6.32 % p.a.
    Initial monthly repayment
    $4,328
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    BCU Bank’s OMG owner occupied home loan offers a variety of great low rates depending on your deposit. Save with no ongoing annual fees. Access your extra payments when you need to through the redraw facility. Pre-approval valid for 3 months.

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    • LVR 80-95%
    Interest rate
    6.75 % p.a.
    Fixed 3 years
    Comparison rate
    7.09 % p.a.
    Initial monthly repayment
    $4,540
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    Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.

  • Offset Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR 80-95%
    Interest rate
    6.75 % p.a.
    Fixed 3 years
    Comparison rate
    7.30 % p.a.
    Initial monthly repayment
    $4,540
    Go to site

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR 80-95%
    Interest rate
    6.84 % p.a.
    Variable
    Comparison rate
    6.88 % p.a.
    Initial monthly repayment
    $4,582
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    Refinancers or first home buyers pay no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and credit criteria apply.

  • Basic Home Loan

    • Owner Occupier
    • LVR 90-95%
    • Principal & Interest
    Interest rate
    7.19 % p.a.
    Variable
    Comparison rate
    7.22 % p.a.
    Initial monthly repayment
    $4,747
    Go to site

  • Offset Home Loan

    • Owner Occupier
    • LVR 90-95%
    • Principal & Interest
    Interest rate
    7.19 % p.a.
    Variable
    Comparison rate
    7.43 % p.a.
    Initial monthly repayment
    $4,747
    Go to site

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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