How Much Deposit Do You Need for Your First Home in NSW?

Saving a 20% deposit can take years. For many first home buyers in NSW, government support means you may be able to buy sooner with as little as 5% saved. Here is how the main schemes work and how they can fit together.

Why 20% is the number you keep hearing

Lenders usually see a 20% deposit as the safe line. Borrow more than 80% of the property's value and most lenders add Lenders Mortgage Insurance (LMI). LMI protects the lender, not you, and it can add thousands of dollars to your costs.

On a $900,000 home, 20% is $180,000 before stamp duty and other costs. That is why the schemes below matter.

The Australian Government 5% Deposit Scheme

Under this scheme (formerly the First Home Guarantee), eligible buyers can purchase with a 5% deposit and no LMI. The government guarantees part of the loan to the lender instead.

Since 1 October 2025 the scheme has no income caps and no limit on places. In NSW, the $1.5 million cap applies to Sydney and the designated regional centres of Central Coast, Coffs Harbour–Grafton, Illawarra, Mid North Coast, Richmond–Tweed, Newcastle and Lake Macquarie. The cap is $800,000 in other NSW areas. Buyers should confirm the applicable cap using the official postcode tool and their participating lender.

To be eligible, you generally need to be 18 or over, buying a home to live in, and either a first home buyer or someone who hasn't owned property in Australia in the last 10 years. Every applicant must be an Australian citizen or permanent resident, and you need at least 5% in savings.

The scheme's eligibility rules and property price caps are set centrally by the Australian Government. Participating lenders also apply their own lending and credit criteria, so meeting the scheme rules does not guarantee loan approval. You can find the official scheme details at firsthomebuyers.gov.au.

Single parents and legal guardians may be able to use the Family Home Guarantee, which allows a deposit from 2%.

Stamp duty savings in NSW

Stamp duty is often the biggest upfront cost after your deposit. The NSW First Home Buyers Assistance Scheme can remove or reduce it:

• New or existing homes: no stamp duty up to $800,000, and a reduced rate up to $1,000,000
• Vacant land to build on: no stamp duty up to $350,000, and a reduced rate up to $450,000

At least one buyer must be an Australian citizen or permanent resident. You must move in within 12 months of settlement and live there for at least 12 continuous months.

The First Home Owner Grant for new homes

If you are buying or building a brand-new home, the NSW First Home Owner Grant (FHOG) provides $10,000. Property value caps apply: $600,000 for buying a new home, and $750,000 for building or a house-and-land package. Established homes are not eligible.

How the schemes can work together

These schemes are separate, so some buyers can use more than one. For example, an eligible buyer of a new home in Western Sydney might combine a 5% deposit under the federal scheme with a stamp duty exemption and the $10,000 grant.

Whether that works for you depends on the property price, whether it is new or established, and your own circumstances.

Other ways to reduce what you need upfront

• LMI waivers: some lenders waive LMI for certain professions, such as some medical, legal and accounting roles.
• Family guarantee: a family member may be able to use equity in their own home as extra security.
• Genuine savings: most lenders want to see savings built up over time, so start a regular savings habit early.

What to do next

Rules and caps change, and each lender applies them differently. A Flatmart adviser can help assess which schemes you may be eligible for, estimate your upfront costs and compare suitable loan options, subject to the relevant scheme and lender requirements.

Last reviewed: October 2026

This article provides general information only and does not take into account your objectives, financial situation or needs. Scheme details are current as at October 2026 and may change.