Insights · Property and lending
First home buyers: how much deposit you need and how to get there
The deposit is usually the hardest part of buying a first home. The good news is that you may need less than you think, and there’s more help available in NSW than most first buyers realise.
How much deposit do you actually need?
20% avoids lenders mortgage insurance. Lenders mortgage insurance (LMI) protects the lender, not you, if you borrow more than 80% of the property’s value. It can add thousands, or tens of thousands, to the cost of buying, usually added to the loan. With a 20% deposit, you avoid it with any lender.
Less than 20% is possible. Many lenders will lend up to 90% or 95% of the value if you pay LMI. And government schemes let eligible buyers go lower without it.
Don’t forget the costs on top. Budget for legal or conveyancing fees, building and pest inspections, loan fees, moving costs, and transfer (stamp) duty if you’re not exempt.
Help for first home buyers in NSW
Home Guarantee Scheme. The federal government guarantees part of your loan so you can buy with as little as 5% deposit without paying LMI (2% for eligible single parents under the Family Home Guarantee). The scheme was expanded in October 2025 to remove income caps and place limits, with property price caps that are higher in Sydney [check: confirm current caps before publishing figures].
First Home Buyers Assistance Scheme (NSW). No transfer duty on homes up to $800,000, and reduced duty on homes up to $1 million. Separate thresholds apply to vacant land you’ll build on. On a Western Sydney home, that can save $30,000 or more.
First Home Owner Grant (NSW). A $10,000 grant for buying or building a new home, subject to price caps.
First Home Super Saver Scheme. Make voluntary contributions to super of up to $15,000 a year ($50,000 in total) and withdraw them, with deemed earnings, for your deposit. Salary sacrificed contributions are taxed at 15% going in instead of your marginal rate, which can speed up saving considerably. Ask us to run the numbers for your income.
You may be able to combine several of these. Eligibility rules (citizenship or residency, living in the home, never having owned property) apply to each, so check before you rely on one.
Ways to save faster
Know where your money goes. Three months of bank statements will show more than any budgeting app. Cancel the subscriptions you’ve forgotten about.
Automate it. Have a set amount moved into a separate high-interest account the day you’re paid, before you can spend it.
Show genuine savings. Many lenders want to see at least some of the deposit saved by you over three months or more, not just gifted or borrowed. Regular saving also shows them you can manage repayments.
Clear other debts. Credit card limits count against your borrowing power even if you don’t use them. Reduce limits or close cards you don’t need. Buy now pay later accounts and car loans count too.
Family help. Parents can gift money towards a deposit, or act as guarantor by offering security over their own property for part of your loan. A guarantee can avoid LMI with a small deposit, but it puts their property at risk if you can’t pay, so everyone needs to understand it.
Before you start looking
Get pre-approval so you know your limit before you bid or make an offer, and so you can move quickly. Judge Lending compares loans across a range of lenders, checks which schemes you qualify for, and handles the application through to settlement. If you’re self-employed, your Judge accountant can get your financials lender-ready.
See home loans with Judge Lending, and our guide to understanding different mortgage types.