How To Buy Your First Home Without A 20% Deposit Or The Bank Of Mum and Dad

By Rebecca Mitchell
10th Feb 2023

Two people hugging with view of mountains and sea behind them

Your first home deposit could be the largest single sum you ever have to hand over. And let's face it, it's a struggle to pull together the suggested 20% minimum deposit, which can take literal years of saving. 

With our capital cities now having an average of $1 million for a house, that first 20% deposit is daunting, to say the least.

While there are ways around the 20% deposit rule—such as using a guarantor or receiving a ‘gift'—we don’t all have access to this luxury.

Fortunately, there are a range of incentives and schemes you can tap into to help reduce that initial deposit amount and get yourself in the property market sooner than you think. We've teamed up with Bankwest to help you figure out how to get closer to your home-owning goal.

Chat To An Expert

Before you get started, you might want to chat with a lender or broker to get the full picture of what you need in order before you buy. You don’t have to be ready to buy right away, but it'll help you get thinking about how to get your ducks in a row for when you are ready to start bidding. They can help shed further light on the incentives available to help you get the keys to your new place. 

First Home Guarantee

This national scheme offers a chance to purchase a home with only a 5% deposit. The First Home Guarantee (FHBG) is on offer to folks who earn less than $125,000 per year, or $200,000 if you’re part of a couple. 

There is also an element of competition here, as only 35,000 people can receive the FHGB in the 2022-23 financial year. But, if you get in quickly, this could be your ticket to home ownership.

Utilise Your State’s First Home-Owner Incentives

There are grants, schemes and incentives on state and national levels geared at helping first-time buyers crack into the market. Most will help you make up that initial deposit and get your foot in the door aka shave down the deposit amount you actually have to save.

Let’s break it down by state and territory:


Unlike most other states, the ACT no longer offers a First Home Owner’s Grant (FHOG). It does, however, have the Home Buyer Concession Scheme for those who meet eligibility requirements, including an income threshold.

While this won’t help you with your deposit, the scheme offers a transfer duty exemption or concession for eligible applicants, potentially saving you up to $36,950 off your purchase—win. 


NSW is willing to sling you $10,000 towards the purchase of a new home or property as part of its FHOG. As with all FHOGs, there are eligibility criteria you must meet, including that the property must be either a new build (to the value of $750,000) or a new home that has not been lived-in (to the value of $600,000). 


The NT FHOG also offers $10,000 to buy or build a new home. If you’re a low or middle-income earner, you can also check out the HomeBuild Access scheme which can provide those with even a 2.5% deposit access to a home loan. Both programs are only available for those who meet eligibility criteria.


Queenslanders will be happy to know their First Home Owner’s Grant is a lovely $15,000 towards a new build to the value of  $750,000—that could shave off quite a bit if you intend to purchase your first home in a regional area.


South Australia also has a generous $15,000 First Home Owner’s Grant. However, the value of the desired home can only be up to $575,000 for you to be eligible. 


Good news, Tassie! First homeowners could be eligible for a grant of up to $30,000 if they’re building a new home in the southernmost state. If buying an existing residence, you’re not eligible for the grant, but you may still be able to get a duty concession of 50%, depending on the property and its value. 


The Victorian FHOG offers $10,000 on new builds to the value of $750,000. The state also offers a range of concessions and discounts on stamp duty for first-home buyers, which can help with the overall financial undertaking.


Like most states, WA offers a $10,000 FHOG. Interestingly, the value of the eligible property changes depending on whether it is south of the 26th parallel (capped at $750,000) or north (capped at $1 million). 

Take Advantage Of The First Home Super Saver Scheme

If you’ve made any voluntary superannuation contributions in recent years, you could be sitting on a large chunk of your first home deposit. The First Home Super Saver (FHSS) scheme allows buyers to withdraw voluntary contributions from their super to the value of $50,000. Not a bad sum!

There are a range of conditions to access the FHSS, including only being able to withdraw a maximum of $15,000 from your super per financial year. The $50,000 total limit refers to an accumulative total. Plus, if you use your super to save for your deposit—and your super performs well—you can earn a pretty penny in interest to help get your deposit together faster than in a regular savings account.  

Pay Lender’s Mortgage Insurance

After looking into all the incentives available to you, if you still have less than a 20% deposit, you might want to consider Lender’s Mortgage Insurance. Confused? Essentially, lenders require home loan applicants with less than a 20% deposit to pay Lender’s Mortgage Insurance (LMI).

The 20% deposit benchmark is intended to reassure lenders that you can afford to repay your loan. Without it, lenders may consider you to be too risky and require you to pay mortgage insurance in case you default. 

While the amount of LMI varies depending on your deposit amount and your desired property, it can cost thousands or tens of thousands of dollars. If you have a larger deposit—e.g. 15% versus 5%—the less LMI you will pay. 

While some people want to avoid LMI, it can be financially beneficial for some to cop the fee in order to get into the market faster. The cost of LMI is also typically less than what you would need to make up the full 20% deposit. Plus, if you buy in a high-growth area, it could be worthwhile paying it as the benefits you'll get out of building equity in your home may outweigh to cost of LMI in the long run.

Ready to get your foot in the property market door? For more tips and information on how you can visit the Bankwest website to learn more from the experts. 

Editor’s note: this article was produced in partnership with Bankwest Thank you for supporting the partners who make Urban List possible. To read our editorial policy, click here.

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