First Home Buyer Loans

First Home Buyer FAQs

• What is a first home buyer's loan?

  A first home buyer's loan is a mortgage product specifically designed for individuals who are buying their first property. They typically have features and benefits tailored towards people who may not have a large deposit saved up. In Australia, there are several incentives available for first home buyers, including reduced stamp duty and access to the First homeowner Grant.

  Also see our first home buyer's guide for a deeper look into how to buy a home as a first time buyer.

• How do I apply for a first home buyer home loan?

  Applying for a first home buyer's loan typically involves a few key steps. Firstly, you'll need to work out how much you can afford to borrow. This can be done using online home loan calculators or by speaking with a mortgage broker, such as Rapid Finance, who specialises in first home buyer loans.

  Next, you'll need to save for a deposit, if you haven't done so already. The deposit required can vary, but typically it is around 20% of the property's value, although we have access to mortgage products for low deposit home loans.

  Finally, you'll need to apply for the loan. When applying through Rapid Finance, we may assist you with every step of the application process and limit the number of hard checks on your credit file, so that your credit file is protected.

  Also see our first home buyer's guide.

• How much do I need for a home deposit?

  Typically, you will need to save between 10% and 20% of the property’s value for a home deposit. However, the exact amount can vary depending on the lender's requirements, the type of loan, and whether you're willing to pay Lenders Mortgage Insurance (LMI). Depending on where you live in Australia, that amount can vary, due to differences in house prices.

  Check out how much you could borrow for your first home with our borrowing power calculator. Just enter your income and expenses and adjust the interest rate and loan term to see your borrowing power.

• Can I get a home loan with a 10% deposit?

  Yes, it is possible to get a home loan with a 10% deposit in Australia. However, if your deposit is less than 20% of the property value, you will usually need to pay Lenders Mortgage Insurance (LMI). This protects the lender in case you default on the loan.

  When applying through Rapid Finance, we can guide you through all the options available to you.

• Can I use my super for a first home deposit?

  Under the First Home Super Saver Scheme, you can make voluntary contributions into your super fund to save for your first home. You can then apply to release these contributions (along with the earnings) to help you purchase your first home. There are specific criteria and conditions you must meet to use this scheme.

  Here are some of the key conditions and criteria:

  1. Contribution Caps: You can contribute up to $15,000 in any one financial year, and a total of $30,000 across all years.

  2. Type of Contributions: You can only use voluntary contributions made to your superannuation, which includes personal contributions or salary sacrificed amounts.

  3. Withdrawal: When you're ready to buy your first home, you can apply to the Australian Tax Office (ATO) to withdraw these contributions, plus the associated earnings. The withdrawn amount will be taxed at your marginal tax rate, minus a 30% tax offset.

  4. Eligibility Criteria: To be eligible for the FHSSS:

     • You must be at least 18 years old.
     • You cannot have owned property in Australia before (exceptions are available for people who have suffered financial hardship).
     • You must intend to live in the property as your principal place of residence for at least six months in the first 12 months you own it, after it is practical to move in.

  5. First Home Purchase: Once your FHSSS amounts are released, you have up to 12 months to sign a contract to purchase or construct a home. If you need more time, you can apply for a 12-month extension.

  6. One-time Use: You can only apply for and receive a FHSSS release once.

  Remember, laws and regulations may change, so it is important to check the Australian Tax Office website or with your Rapid Finance advisor for the most curr

• What is the first home owner grant?

  The First Home Owner Grant (FHOG) is a government scheme in Australia designed to help first home buyers purchase or build a residential property to live in. The value of the grant and the eligibility criteria vary from state to state.

  • New South Wales (NSW): $10,000 for new homes only, with a price cap of $600,000 for the purchase of new homes and $750,000 for the construction of a new home.

  • Victoria (VIC): $10,000 for new homes in metropolitan areas and $20,000 for new homes in regional areas, with a property value cap of $750,000.

  • Queensland (QLD): $15,000 for buying or building new homes valued less than $750,000.

  • South Australia (SA): $15,000 for the purchase and construction of any new home, with a property value cap of $575,000.

  • Western Australia (WA): $10,000 for new homes, with no cap on the property value, although the grant amount varies depending on the location (north of the 26th parallel).

  • Tasmania (TAS): $10,000 for the purchase or construction of a new home, without any cap on property value.

  • Northern Territory (NT): $10,000 for buying or building new homes, with no cap on the property value.

  • Australian Capital Territory (ACT): No FHOG, but they offer a full stamp duty concession for eligible first home buyers, irrespective of whether the home is new or established.

• Can I use the first home owners grant for a deposit?

  The First Home Owner Grant (FHOG) can be used towards your home deposit, but it's generally not enough to cover the full amount. Depending on the state, the FHOG can range from $10,000 to $20,000. It's important to remember that lenders usually require genuine savings as part of your deposit as well.

  When you apply though Rapid Finance, our finance specialists will review your financial situation and may be able to source a first home loan mortgage which requires only a low deposit or in some cases no deposit on the home loan.

• How can I qualify for the first home owners grant?

  To qualify for the First Home Owners Grant (FHOG) in Australia, you typically need to meet the following criteria:

  • You must be a first-time home buyer. Neither you, nor your spouse or de facto partner should have owned a residential property in Australia before.
  • At least one applicant must be an Australian citizen or permanent resident.
  • The home must be a new or substantially renovated property.
  • You must live in the home as your principal place of residence for a continuous period of at least six months within the first 12 months after completion of the transaction.
  • The value of the home must not exceed the cap limit set by your state or territory.

  Please note, the exact requirements can vary from state to state, so it's important to check the specific criteria in your area.

• Are first home buyers in Australia exempt from stamp duty?

  In some states and territories in Australia, first home buyers may be eligible for stamp duty concessions or exemptions. The criteria vary widely by state, and it often depends on the value of the property.

  • NSW: Full stamp duty exemption for homes up to $650,000, concessions between $650,000-$800,000.
  • VIC: Complete stamp duty exemption for properties up to $600,000, sliding scale concessions for $600,000-$750,000.
  • QLD: Concession available up to $500,000. No exemptions or concessions over $550,000.
  • SA: No specific first home buyer concessions; standard rates apply.
  • WA: Exemption for properties up to $430,000, concessional rate for $430,001-$530,000.
  • TAS: No specific first home buyer concessions; standard rates apply.
  • NT: Full concession under FHOD on initial $500,000, leading to savings up to $23,928.60.
  • ACT: Home Buyer Concession Scheme offers full exemption to eligible first home buyers, irrespective of property value.

   

  Please note that these conditions can change over time and may have additional qualifying criteria.

• How much is the first home owners grant in each state in Australia?

  • New South Wales: $10,000
  • Victoria: $10,000 or $20,000 for new homes in regional Victoria
  • Queensland: $15,000 for homes valued at less than $750,000
  • South Australia: $15,000 for new homes only
  • Western Australia: $10,000
  • Tasmania: $20,000 for new homes
  • Northern Territory: $10,000
  • Australian Capital Territory: $7,000

   

  Please double-check for your state, for the latest figures, as they are subject to change from time to time.