Why First Home Buyers Should Know the Numbers

First home buyers across Victoria are entering the property market in numbers that tell a very particular story about how deposits are being structured and which schemes are doing the heavy lifting.

Understanding where other buyers are starting helps you shape your own strategy, particularly when it comes to deposit size, scheme eligibility, and which concessions might apply in your situation.

How Many First Home Buyers Are Using Low Deposit Schemes

A large proportion of first home buyers are purchasing with deposits below 20%. Since 1 October 2025, the Australian Government 5% Deposit Scheme has operated with no income caps and no annual place limits, making it accessible to a far wider group than previous iterations. Applications are made through participating lenders, not directly to Housing Australia.

In our experience, buyers who meet the scheme's eligibility criteria tend to move faster than those trying to accumulate a full 20% deposit, particularly in Melbourne where the property price cap is $950,000. Consider a buyer who has saved $50,000 in genuine savings. Under the 5% Deposit Scheme, that deposit opens access to properties valued up to $950,000 without paying lenders mortgage insurance. The alternative would be waiting another two to three years to reach a 20% deposit on the same property type, by which time the property value may have shifted.

The scheme also includes a 2% deposit option for eligible single parents or legal guardians, reducing the deposit requirement further. The government guarantee covers the gap between the buyer's deposit and 20% of the property value, removing the need for lenders mortgage insurance while still allowing the buyer to purchase with limited savings.

Stamp Duty Concessions in Victoria and Who Uses Them

Victoria offers a full stamp duty exemption on properties valued up to $600,000 and a sliding scale concession on properties between $600,001 and $750,000. This applies to both new and established homes, provided the property is used as the buyer's principal place of residence.

For buyers purchasing in regional Victoria, this exemption often covers the full purchase price. In greater Melbourne, particularly in growth corridors and outer suburbs, the exemption still applies to a range of entry-level properties including units, townhouses, and some house and land packages.

A buyer purchasing an established unit valued at $580,000 in a suburb like Werribee or Melton would pay no stamp duty, saving around $28,000 in upfront costs. That saving can be redirected toward furnishings, moving costs, or kept as a financial buffer during the first few months of ownership. Buyers purchasing between $600,000 and $750,000 receive a partial concession, with the benefit reducing on a sliding scale until it phases out entirely at $750,001.

Victoria also offers a $10,000 First Home Owner Grant for new homes valued up to $750,000. This grant does not apply to established homes, so buyers purchasing an existing property rely on the stamp duty concession alone. The two concessions can be combined when purchasing a new build within the eligible price range.

What First Home Buyers Are Actually Spending on Deposits

Deposit amounts vary widely depending on the scheme being used, the property type, and the location. Buyers using the 5% Deposit Scheme in Melbourne are typically contributing between $40,000 and $47,500 on properties approaching the $950,000 cap. Regional buyers face lower price caps and correspondingly lower deposit requirements.

Buyers aiming for a 10% deposit without using a government scheme are contributing larger sums, but still avoiding the cost of lenders mortgage insurance if they qualify for certain lender programs. A 10% deposit on a $700,000 property in regional Victoria would require $70,000 in genuine savings, plus additional funds for settlement costs including conveyancing, building and pest inspections, and any necessary insurance.

Gift deposits are commonly used to top up savings, particularly where a buyer has stable income and rental history but has not yet accumulated the full deposit amount. Most lenders accept genuine gifts from immediate family members, provided the gift is accompanied by a signed declaration confirming it does not need to be repaid. This can bring forward a purchase by 12 to 18 months for buyers who are otherwise close to their target deposit.

Help to Buy Take-Up and Why It Remains Limited

Help to Buy became operative in Victoria on 5 December 2025. The scheme allows the Australian Government to contribute up to 40% of the purchase price for a new home or up to 30% for an existing home in exchange for an equivalent equity share. The buyer must contribute a minimum 2% deposit.

Income limits apply: $100,000 for individuals and $160,000 for joint applicants or single parents. Property price caps also apply and vary by location. Help to Buy cannot be combined with the 5% Deposit Scheme, which limits its appeal to buyers who might otherwise qualify for both.

Take-up has been slower than anticipated, largely because the income thresholds exclude dual-income households earning moderate salaries and the equity share structure requires careful consideration of future property value movements and exit terms. Buyers who do use the scheme tend to be single applicants with stable employment who are purchasing in suburbs where the property price cap aligns with the local market.

What First Home Loan Applications Look Like in Practice

Most first home loan applications include a combination of savings history, employment verification, and a clear explanation of how the deposit was accumulated. Lenders assess serviceability based on income, existing debts, and living expenses, then determine how much they are prepared to lend.

Pre-approval is commonly sought before buyers begin attending inspections, particularly in markets where stock turns over quickly. Pre-approval provides a conditional commitment from a lender, subject to property valuation and final checks. It does not lock in a purchase price or guarantee final approval, but it does give buyers confidence about their borrowing capacity before they make an offer.

A typical first home loan application timeline runs between two and four weeks from initial submission to formal approval, depending on the lender, the complexity of the buyer's financial situation, and whether any additional documentation is required. Buyers who are self-employed, have recently changed jobs, or are using gift deposits may face a longer assessment period as lenders verify income and deposit sources more thoroughly.

Why First Home Buyers Should Review All Available Concessions Before Applying

Many buyers assume they are ineligible for government assistance because they earn above a certain threshold or because they are purchasing outside metropolitan Melbourne. The removal of income caps from the 5% Deposit Scheme in October 2025 changed that assumption.

Buyers in regional Victoria also have access to higher property price caps under the scheme and may qualify for both the stamp duty concession and the First Home Owner Grant if purchasing a new build. Regional buyers purchasing in centres like Ballarat, Bendigo, Geelong, or the Latrobe Valley should confirm the applicable caps and concessions before finalising their budget.

Reviewing eligibility early in the process allows buyers to structure their deposit appropriately and avoid over-saving or delaying a purchase unnecessarily. It also ensures that buyers do not miss time-sensitive concessions or scheme changes that may affect their ability to access certain benefits.

Call one of our team or book an appointment at a time that works for you to review your eligibility, confirm which concessions apply to your situation, and structure your home loan application around the most relevant scheme for your circumstances.

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