First home buyers · Australia-wide, online

Buying your first home? Start here.

I'll walk you through it the same way I walk clients through it, and the numbers come last, when they'll actually make sense.

"It's not complicated, but you just need to understand the mechanics."

Jai Raynor · Mortgage broker

Five short parts ↓

Part 1

What the bank actually cares about

At the end of the day there are two questions: do you have the money, and can you afford the loan?

Gate 1

The money

Do you have the deposit, and the costs on top?

Gate 2

The loan

Can you afford it, the way the bank measures it?

You can have all the deposit in the world, but without the income to service the loan, it doesn't matter.

Some buyers are deposit-limited. Some are servicing-limited. Some are both. The whole game is working out which part is actually stopping you, then attacking that.

Deposit-limited Servicing-limited Both

Tap the one that sounds most like you. I'll point you at the right first step at the end.

Right, let's start with the deposit.

Part 2 · Gate 1

The deposit equation, and where LMI comes in

A $650,000 property illustrative only

a 95% loan ($617,500)

▲ above 80% LVR, LMI territory your 5% gap ▲

The gap (5% of price)$32,500

Stamp duty (varies by state) $17,350may be $0

Lenders Mortgage Insuranceoften added to the loan

Legals and other costs$3,000

Cash you may actually need $52,850$35,500

LMI usually isn't paid in cash upfront, and Part 3 is about the ways to avoid it entirely.

● The threshold effect: at this price, first home buyers in most states pay reduced or even zero duty. Go over your state's threshold and the full amount snaps back. Same property, same 5% gap, very different cash needed.

1. LVR is how the bank measures risk. If you stop paying, the bank's way of getting its money back is selling the property. The bigger the loan against the property's value (the loan-to-value ratio), the more risk they carry. That's where the old you-need-20% wisdom comes from.

2. Cross 80% LVR and LMI appears. LMI is insurance that protects the lender, not you. It's the price of them taking on a higher-risk loan, and it can add thousands to the cost of buying with a small deposit. That striped zone on the bar is where it applies. Hold this thought, because it explains everything in Part 3.

3. Your deposit is not the cash you need. The real number is the cost to complete: the gap between what the bank lends and the full cost of buying. Stamp duty and fees sit on top of the price, and stamp duty swings hardest. Land under your state's first home buyer threshold and it can drop toward zero.

Cash you may need $52,850$35,500

Your turn: put your own numbers in.

Try the cost to complete calculator

Keep reading: 5% deposit vs cash to complete · Hidden costs buyers forget · LVR bands and your rate

Part 3 · Gate 1

Three ways to solve the deposit equation

The reason I explained LMI first is that it makes sense of all of this. Each of these pathways is really someone stepping in to carry that risk for you, so the LMI cost, or the 20% rule, stops being your problem.

1. Government assistance

the government carries the risk

5% Deposit Scheme. The government guarantees the gap above your 5%, so LMI may not apply. Trade-offs exist: fewer lenders, and you might refinance out later.

Help to Buy. Shared equity from a 2% deposit. The government co-buys a share, so you only service the rest. The one scheme that helps both gates. Income caps and other eligibility rules apply. The Help to Buy calculator checks the income cap for you.

State grants and duty concessions. Every state and territory has its own grants and stamp duty breaks. That's the threshold effect from Part 2.

And a booster that stacks under all of the above

FHSS. A tax-advantaged way to save the deposit through super.

Worked example: Queensland

First Home Owner Grant (new homes up to $750,000)$30,000

Transfer duty on new builds (from 1 May 2025)$0, no price cap

First home concession, established homesunder $800,000

Potential duty saving, depending on priceup to about $24,525

Eligibility, residency rules and price caps apply, and every state draws its own lines. Figures verified July 2026.

See the grants and schemes for your state →

2. Professional LMI waivers

the lender carries the risk

Some lenders waive LMI entirely for certain professions: doctors, nurses, allied health, and some legal and accounting roles, letting you borrow up to 90 to 95% with no LMI and no government scheme needed.

Why? The lender's own data says these borrowers are lower risk, so they carry the risk themselves. It's the same LMI logic, just with the lender stepping in instead of the government.

Who may be eligible

Each lender keeps its own list of eligible professions, income floors and LVR limits, and the lists differ a lot between lenders. That's exactly the kind of policy detail a broker checks across the market for you.

Check the LMI waiver guides by profession →

3. Family guarantors

your family carries the risk

A family member offers part of their own property's equity as extra security. That can take your LVR under 80% with little or no cash deposit, so LMI never enters the picture.

A guarantor helps when you don't have the money. It doesn't help if you can't afford the loan.

How it works, and the risk

Usually parents, and their equity is genuinely at risk if things go wrong, so it's a family conversation before it's a finance one. Most guarantees are released once you've built enough equity. Full explainer on the blog.

Read the family guarantee explainer →

So the deposit can be solved. But notice what none of these fix.

With one partial exception, Help to Buy, every pathway above answers the money question. None of them fully answer whether you can afford the loan. That's the second gate, and it's where we go next.

Part 4 · Gate 2

Can you afford the loan, as the bank measures it?

Your borrowing capacity

No number shown on purpose. Yours depends on your circumstances.

── what you feel you could afford

what the bank may say, lifting as levers close

The real question in a strategy session: which problem are we attacking, the servicing problem or the deposit problem?

1. The buffer. The bank tests you at a higher rate than the one advertised. That's why feeling you can afford it and hearing no from the bank can both be true at the same time.

2. Expenses have a floor. Everyone who applies for a loan becomes a savings guru overnight. Banks know it, so they assess a minimum living cost no matter what you declare. Cancelling a streaming service isn't the lever people think it is.

3. Income type matters. PAYG, self-employed and casual income are treated differently, and differently again between lenders. Two people on the same money can have very different capacity.

The hopeful part: capacity isn't fixed. There are many levers, and part of a broker's job is pricing each one in borrowing-capacity dollars. Here is a general idea of the kinds of things we might look at. Watch the bar as each one lands:

✓ Closing or paying out a car lease

✓ Lowering a credit card limit

✓ Reviewing how lenders treat HECS and other commitments, because policy differs between lenders

✓ A partner moving to permanent hours

Capacity

There are more, and some are personal. That's a conversation, not a webpage.

This gate is personal. No calculator can be the whole answer. The easiest way to get your answer is a strategy session, where we run this exact exercise on your numbers.

Book a strategy session

Or ask on r/AskAnAussieBroker · read Jai's answers
Keep reading: Why capacity varies between brokers · Self-employed income

Part 5 · Both gates together

You now know the mechanics.

You've just covered the same ground I cover in a real strategy session. The session is where it gets personal. About an hour together, with your actual income, debts and deposit on the table.

We work out which gate is holding you back, list every lever, price each one in borrowing capacity dollars, and you choose which to pull. You leave with a roadmap and homework, not a sales close.

Book a strategy session

It starts with a quick chat so we can make sure a session is worth your time.

Not ready to talk? Put your numbers in the cost to complete calculator, take the eGuide (PDF) with you, or keep reading on the blog.