First home buyer? Big dream, small deposit

Buying your first home is a huge milestone, and it’s normal for it to feel a bit daunting. There’s a lot to consider and it can be hard to know where to start, but with the right support the process can be simpler and more achievable than you might think.

The recent expansion of the Australian Government 5% Deposit Scheme (formerly the Home Guarantee Scheme) is making it easier for more Aussies to get their foot in the door. But that’s just one piece of the puzzle, there are lots of ways to make your first home a reality, and having the right guidance can make all the difference.

To help answer some of the most common questions first home buyers have, CBA Newsroom spoke with Zain Sumar, a CommBank Home Lending Specialist who’s helped many people take their initial step into the property market.

Do I really need a 20% deposit?

Zain: Nope! That’s one of the biggest myths out there. While a 20% deposit can help you avoid extra costs, it’s not the only way. At CommBank, we see plenty of first-home buyers purchase with less. What matters most is your overall financial position and the support available to you. There are options like:

These can make a big difference and help you get into your own place sooner.

What’s the deal with government help?

Zain: The big one right now is the Australian Government 5% Deposit Scheme. This scheme is designed to help first home buyers purchase a home to live in with as little as a 5% deposit or 2% for eligible single parents, cutting down the time it takes to save. Plus, because the government guarantees part of your loan, you won’t need to pay LMI.

The scheme has just been expanded as well, making it more accessible:

Unlimited spots available: No longer a cap on how many first home buyers can access the scheme.
Higher property price caps: You can buy a wider range of homes.
Income caps removed: More people are eligible, regardless of their income.

To learn more or see if you’re eligible for the government’s scheme, book an appointment with a CommBank Home Lending Specialist – we can guide you through your options and help you get started.

Can I avoid paying stamp duty?

Zain: Stamp duty is a big upfront cost, but many states offer full or partial exemptions for first home buyers. It’s important to note, that these concessions usually phase out above certain property prices. So, you might need to look at smaller properties, like units or semi-detached homes, or less expensive suburbs or towns. These are often priced within the eligibility range for concessions. The rules vary by state, so it’s worth checking. A CommBank Home Lending Specialist can help you figure it out.

Are there other ways I can get into the market sooner without using a government scheme?

Zain: Definitely! While government schemes like the Australian Government 5% Deposit Scheme are fantastic, there are several other strategies that can help you buy your first home faster, even if you don’t have a huge deposit saved.

At CBA we’ve got options, including:

Lenders Mortgage Insurance (LMI): With LMI, you can buy with as little as a 5-10% deposit. LMI is a one-off insurance cost that protects the lender, not you, but it means you don’t have to wait years to save a 20% deposit. The cost can often be added to your loan, so you can get into the market sooner.
Deposit guarantor loans: If you have a family member (often a parent) who’s eligible to help, they can use the equity in their own home to guarantee part of your loan. This can help you secure a home loan with a smaller deposit and may even let you avoid paying LMI altogether.
Buying with others: Teaming up with a friend, partner, or family member can make it easier to get into the market sooner. With CommBank’s Property Share , you can each have your own loan structure and ownership share. This makes it easier to split the cost of a home, while keeping your finances completely separate.

What about my HECS debt, will that impact how much I can borrow?

Zain: Your HELP (or HECS) debt does play a role in how lenders assess your borrowing power, but here’s good news. CommBank has recently updated our policy to make things easier for customers with student debt. If you can repay your HELP debt within 12 months, we will exclude it from your serviceability assessment. If you can repay it within 1 - 5 years, we’ll still include the repayments, but we’ll apply a reduced serviceability buffer. Simply put, this could increase your borrowing power and help you into your first home sooner.

I’m excited but also a bit overwhelmed, what should I focus on to make buying my first home feel more manageable?

Zain: Buying your first home is a big milestone, and it’s okay to feel a mix of excitement and nerves. The best thing you can do is break the process down into smaller steps and speak to a CommBank Home Lending Specialist. Start by getting a clear picture of your budget, learn about the different support options available, and think about what kind of property suits your lifestyle and goals.

Our Home Lending Specialists can answer your questions, explain your options, and guide you through each stage - from your first enquiry to settlement. We’ll help you understand what’s possible for your situation, connect you with tools and resources, and help you to feel confident about your decisions. With the right support, buying your first home can be a smooth and exciting journey.