Everything You Need to Know About First Time Buyer Resources

Buying your first home in Victoria means understanding which support programs you qualify for and how to combine them.

The Victorian Government offers a $10,000 First Home Owner Grant for new homes valued up to $750,000, plus stamp duty relief that can save you anywhere from $8,000 to over $30,000 depending on your purchase price. At a federal level, the Australian Government 5% Deposit Scheme removes the need for lenders mortgage insurance when you're buying with a smaller deposit. Understanding how these programs work together, what each one requires, and which lenders participate makes the difference between hoping you can afford a home and knowing exactly what you need to do next.

The Victorian First Home Owner Grant and Who Qualifies

The Victorian First Home Owner Grant provides $10,000 to eligible buyers purchasing or building a new home valued up to $750,000. The grant applies only to new builds, not established properties. You must be at least 18 years old, an Australian citizen or permanent resident, and you cannot have previously received a first home owner grant in any Australian state or territory. The property must be your principal place of residence for at least 12 continuous months, starting within 12 months of settlement or completion.

If you're buying land to build on, the combined value of the land and construction contract must fall under the $750,000 cap. In our experience, buyers purchasing house and land packages often apply for the grant at the time they sign the building contract rather than waiting until completion. Your solicitor or conveyancer lodges the application on your behalf through the State Revenue Office.

Victorian Stamp Duty Concessions for First Home Buyers

Victoria offers full stamp duty exemption on properties valued up to $600,000 and a sliding concession on homes between $600,001 and $750,000. Above $750,000, standard transfer duty rates apply. The concession is available on both new and established homes, provided the property will be your principal place of residence.

Consider a buyer purchasing an established home in Ballarat at $650,000. Without the concession, transfer duty would be around $34,000. With the first home buyer exemption covering the range up to $600,000, they would pay duty only on the portion between $600,001 and $650,000, reducing the total payable to roughly $2,500. That difference of over $31,000 becomes part of their deposit or renovation budget.

The off-the-plan concession is also available for eligible contracts signed on or before 31 October 2026. Under this arrangement, duty is calculated only on the land value at the date of contract, not the completed property value. This applies to strata or community title properties that are not yet titled or substantially completed at contract date, and the concession is available to a broader group of buyers, not only those purchasing their first home.

How the Australian Government 5% Deposit Scheme Works

The Australian Government 5% Deposit Scheme allows eligible first home buyers to purchase with a 5% deposit without paying lenders mortgage insurance. Housing Australia guarantees the difference between your deposit and the 20% threshold that lenders typically require. No income caps apply, and there are no annual place limits.

In Melbourne, the property price cap is $950,000. In regional Victoria, the cap is $650,000. Applications are made through one of 31 participating lenders, which include three major banks and 28 non-major lenders. You cannot apply directly to Housing Australia.

Victorian buyers often combine the 5% Deposit Scheme with the state's stamp duty concession. As an example, a buyer purchasing a new townhouse in Geelong at $600,000 with a 5% deposit would need $30,000 upfront, plus costs. They pay no stamp duty due to the Victorian concession and no lenders mortgage insurance due to the federal scheme. The $10,000 First Home Owner Grant can be applied at settlement, effectively reducing the amount they need to bring to the table.

Using the First Home Super Saver Scheme to Build Your Deposit

The First Home Super Saver Scheme lets you make voluntary contributions into your superannuation fund and then withdraw up to $50,000 of those contributions, plus earnings, to use toward your first home deposit. You can contribute up to $15,000 per financial year, and the contributions are taxed at the concessional rate of 15% rather than your marginal income tax rate.

When you withdraw the funds, you pay a withdrawal tax, but the overall tax treatment is still more favourable than saving the same amount in a standard bank account. Withdrawals are made through the Australian Taxation Office, not your super fund, and you must request a determination before you can access the money. Once released, the funds can be used for your deposit, stamp duty, or settlement costs. The scheme works well in combination with other state and federal programs and doesn't restrict which property you can purchase, provided it meets the general first home buyer residency requirements.

Choosing Between Fixed and Variable Interest Rates

When you apply for a home loan, you'll choose between a fixed interest rate, a variable interest rate, or a combination of both. A fixed rate locks in your repayment amount for a set period, typically one to five years. A variable rate moves with the market, which means your repayments can rise or fall depending on broader economic conditions.

Fixed rates provide certainty. You know exactly what you'll pay each fortnight or month, which makes budgeting more predictable during the first few years of ownership. Variable rates often come with features such as an offset account or redraw facility, which let you reduce the interest you pay by parking savings in a linked account or accessing extra repayments when needed. Fixed rate loans typically do not include these features, and breaking a fixed rate contract before the term ends can result in significant break costs.

Many buyers split their loan, fixing a portion for stability and keeping the remainder variable for flexibility. Your mortgage broker can model different scenarios based on your income, expenses, and how much certainty you need in your repayments.

What Pre-Approval Tells You Before You Start Looking

Pre-approval confirms how much a lender is willing to lend you before you start making offers. The lender assesses your income, expenses, existing debts, and credit history, then issues a conditional approval valid for three to six months, depending on the lender. Pre-approval is not a guarantee, but it gives you a realistic borrowing limit and demonstrates to sellers and agents that you're a serious buyer.

Pre-approval also identifies any issues with your application that you can address before you find a property. If your credit file shows a missed payment from two years ago, you'll know about it during pre-approval rather than discovering it after you've made an offer. Lenders may ask for payslips, tax returns, bank statements, and proof of your deposit source during the pre-approval process. Once you're conditionally approved, you can search within your confirmed budget rather than guessing what you might qualify for.

Accessing Help to Buy in Victoria

Help to Buy is the Australian Government's shared equity program, operative from 5 December 2025. Housing Australia contributes up to 30% of the purchase price for an established home or up to 40% for a new home in exchange for an equivalent equity share. You need a minimum 2% deposit to participate.

Income limits apply. Individuals must earn no more than $100,000 per year, and joint applicants or single parents must earn no more than $160,000 combined. In Melbourne, the property price cap is $950,000. In regional Victoria, the cap is $650,000. You cannot combine Help to Buy with the 5% Deposit Scheme, but you can use it alongside Victoria's stamp duty concessions and the First Home Owner Grant if you're buying a new home.

Help to Buy suits buyers who can afford repayments on a smaller loan but don't have a large deposit saved. The government's equity share means you borrow less from a lender, which reduces your loan repayments. When you sell or refinance, the government receives its proportional share of any capital gain or loss. Applications are made through participating lenders, and the number of places is capped each financial year.

Common Questions About Lenders Mortgage Insurance and How to Avoid It

Lenders mortgage insurance protects the lender, not you, if you default on your loan. It's typically required when your deposit is less than 20% of the property value. The cost varies depending on your deposit size and loan amount but can range from a few thousand dollars to over $20,000 on higher-value properties.

The 5% Deposit Scheme removes the need for lenders mortgage insurance because Housing Australia guarantees the gap between your deposit and the 20% threshold. Some lenders also offer LMI waivers for certain professions, such as medical practitioners, accountants, and legal professionals. These waivers let you borrow with a smaller deposit without paying insurance, though eligibility criteria and loan limits vary by lender. If you're not eligible for the 5% Deposit Scheme or a professional waiver, building your deposit to 20% remains the most direct way to avoid the cost of lenders mortgage insurance altogether.

Call one of our team or book an appointment at a time that works for you. We'll walk through which programs you qualify for, what your borrowing capacity looks like, and how to structure your application so you're ready to move when you find the right property.

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