Buying your first property is one of the most purposeful financial decisions you'll make.
What separates buyers who move forward with clarity from those who stall for years often comes down to knowing which resources actually apply to their situation and how to access them. In NSW, first home buyers have access to government support, deposit schemes, and stamp duty concessions that can reduce both the time needed to save and the upfront costs of purchasing. Yet many buyers spend months researching generic information without connecting it to their specific circumstances or understanding which steps to prioritise.
The most valuable resource is a clear understanding of your borrowing capacity, your deposit options, and the government support you qualify for based on where you're buying and what you earn. Once you have that foundation, every other decision becomes more focused.
First Home Buyer Eligibility and What It Unlocks
Your eligibility for government support depends on your income, your citizenship or residency status, whether you've owned property before, and the purchase price of the home you're buying. In NSW, single buyers earning up to $90,000 or couples earning up to $120,000 can access the Regional First Home Buyer Guarantee if purchasing outside Greater Sydney. For properties within Sydney and other metro areas, the First Home Loan Deposit Scheme allows eligible buyers to purchase with a 5% deposit without paying Lenders Mortgage Insurance.
Consider a buyer earning $85,000 annually who has saved $45,000. If they're looking in the Central Coast region where median house prices sit around $800,000, they could access the Regional First Home Buyer Guarantee with a 5% deposit of $40,000. Without the scheme, that same buyer would need either a 10% deposit plus LMI or wait to save a 20% deposit of $160,000. The difference is measured in years, not months.
Your eligibility also determines your access to stamp duty concessions. First home buyers in NSW pay no stamp duty on properties up to $650,000 and receive concessions on properties up to $800,000. On a $750,000 purchase, the concession saves approximately $27,000 in upfront costs. These aren't small adjustments to your budget. They fundamentally change what becomes affordable and when.
Low Deposit Options Beyond the 20% Standard
You don't need a 20% deposit to apply for a home loan, but you do need to understand what a lower deposit means for your application and your ongoing costs. Most lenders will approve loans with a 10% deposit if you're willing to pay Lenders Mortgage Insurance. LMI protects the lender if you default, and it typically costs between $5,000 and $30,000 depending on your deposit size and loan amount.
With a 5% deposit, your options narrow to government-backed schemes or select lenders who accept higher risk. The First Home Loan Deposit Scheme is the most accessible route. It's not unlimited. There are a set number of places released each financial year, and they're allocated on a first-come basis once you have a contract of sale. Buyers who wait until they've found the perfect property sometimes miss out because places have already been allocated.
You can also use gifted funds for part or all of your deposit, provided the money comes from an immediate family member and you can provide a signed declaration that it's a genuine gift, not a loan that needs to be repaid. Lenders treat gifted deposits differently to savings, so if your entire deposit is gifted, some lenders may require a larger overall deposit or stronger income evidence. In our experience, buyers who combine their own savings with a gift usually present a stronger application than those relying entirely on one source.
Pre-Approval and Why Timing Matters
Pre-approval tells you how much you can borrow before you start looking at properties. It's valid for three to six months depending on the lender, and it gives you certainty when you're ready to make an offer. Without it, you're researching properties you may not be able to afford or missing opportunities because you can't move quickly when you find something suitable.
The application requires proof of your income, your savings history, your current debts, and your living expenses. Lenders want to see genuine savings, which means funds you've accumulated over at least three months rather than a lump sum that appeared in your account recently. If you've been salary sacrificing into the First Home Super Saver Scheme, those contributions count toward your deposit once you withdraw them, but you still need to demonstrate a pattern of regular saving.
Pre-approval doesn't guarantee final approval. If your financial situation changes between pre-approval and settlement, such as changing jobs, taking on new debt, or reducing your income, the lender can withdraw their offer. Buyers sometimes assume pre-approval means the deal is locked in and make financial decisions that put the purchase at risk.
Fixed or Variable Interest Rates for Your First Home Loan
Your interest rate determines your repayments, but the choice between fixed and variable rates depends on how much certainty you need and what you're willing to give up to get it. A fixed interest rate locks in your repayments for one to five years, which makes budgeting straightforward and protects you if rates rise. The limitation is that you lose access to offset accounts and redraw facilities in most cases, and you'll pay break costs if you need to refinance or sell before the fixed period ends.
A variable interest rate moves with the market. Your repayments can increase or decrease, but you usually gain access to an offset account, which reduces the interest you pay on the portion of your loan balance that's offset by your savings. For buyers who maintain a buffer in their account or receive irregular income such as bonuses or commissions, an offset account can save thousands in interest over the life of the loan.
Many buyers split their loan, fixing a portion for certainty and keeping the remainder variable for flexibility. As an example, on a $600,000 loan, you might fix $400,000 at current rates and leave $200,000 variable with an offset account. If you receive a $15,000 work bonus, you can deposit it into the offset without penalty, immediately reducing interest on the variable portion. If rates fall, the variable portion benefits. If rates rise, the fixed portion holds steady.
Building Your First Home Buyer Budget with Real Costs
Your budget needs to account for the purchase price, the deposit, stamp duty or concessions, lender and conveyancer fees, building and pest inspections, and your ongoing repayments plus household costs. Most buyers focus on the deposit and forget that settlement costs can add another $5,000 to $10,000 even after stamp duty concessions are applied.
If you're buying in regional NSW, such as the Hunter region around Newcastle or the Illawarra around Wollongong, your stamp duty concessions and access to the Regional First Home Buyer Guarantee can reduce your upfront costs significantly compared to metro Sydney. A $600,000 property in Wollongong attracts no stamp duty for a first home buyer and can be purchased with a 5% deposit under the guarantee. The same buyer purchasing in Sydney's inner west at $900,000 would need a larger deposit and wouldn't qualify for full stamp duty exemption.
Your ongoing budget should include a buffer for rate rises, maintenance, council rates, strata fees if applicable, and insurance. Buyers who calculate their maximum borrowing capacity and then borrow the full amount often find themselves stretched when rates increase or unexpected costs appear. Borrowing 10% to 15% below your maximum capacity gives you room to absorb changes without financial stress. You can explore what you might be able to borrow and what that looks like across different scenarios using our borrowing capacity tools.
CFC Finance works with first home buyers across NSW to match your circumstances with the right loan structure, the government schemes you're eligible for, and the lenders who will view your application most favourably. We've supported buyers purchasing in Western Sydney suburbs like Penrith and Blacktown, regional centres including Tamworth and Dubbo, and coastal areas from the Central Coast to the South Coast. Every buyer's situation is different, and the resources that matter most depend on where you're buying, what you've saved, and what you earn.
If you're ready to move from research to action, call one of our team or book an appointment at a time that works for you.
Frequently Asked Questions
What deposit do I need as a first home buyer in NSW?
You can purchase with a 5% deposit using the First Home Loan Deposit Scheme or Regional First Home Buyer Guarantee if you meet eligibility criteria. With a 10% deposit, most lenders will approve your loan but you'll pay Lenders Mortgage Insurance. A 20% deposit avoids LMI but takes longer to save.
Do first home buyers in NSW pay stamp duty?
First home buyers pay no stamp duty on properties up to $650,000 and receive concessions on properties up to $800,000. On a $750,000 purchase, the concession saves approximately $27,000 in upfront costs.
Can I use gifted money for my first home deposit?
Yes, you can use funds gifted from immediate family members as part or all of your deposit. The lender will require a signed declaration confirming it's a genuine gift, not a loan. Applications combining your own savings with a gift are usually viewed more favourably than those relying entirely on gifted funds.
Should I fix or keep my interest rate variable on my first home loan?
A fixed rate gives you certainty over repayments for one to five years but limits access to offset accounts and charges break costs if you exit early. A variable rate allows flexibility and offset benefits but your repayments can change. Many buyers split their loan to gain both certainty and flexibility.
What is pre-approval and when should I get it?
Pre-approval confirms how much you can borrow before you start looking at properties. It's valid for three to six months and gives you confidence to make offers quickly. You'll need proof of income, savings, debts, and expenses to apply.
