The Reserve Bank cash rate sits at 4.6%, its highest since 2011, and the RBA has hiked rates four times in 2026 alone. Average mortgages have doubled in size since 2011. Yet mortgage brokers arranged a record 81.6% of all new home loans in June 2026, and the Australian government has rolled out an unprecedented suite of schemes designed to get first-home buyers into the market. Here’s what you actually need to know.
Disclosure: Some links on this page are affiliate links. If you make a purchase through them, Britwealth may earn a commission at no extra cost to you. We only include products and services that are relevant to the topic.
This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
Those four numbers tell the story of a market pulling in different directions. Borrowing is expensive, but the way Australians buy homes has shifted decisively toward brokers, and the government is putting real money on the table for first-home buyers. Meanwhile, more than 2,100 bank branches have closed since 2017 — almost 40% of metropolitan branches and about 35% of regional ones — which means the old walk-in-and-ask approach to home loans is vanishing. If you’re trying to decide whether this is your moment, you’re not wrong to feel conflicted. The answer depends less on the market and more on your own readiness, and that starts with understanding what’s actually changed. For a broader view of where the cycle might be heading, Australia’s property cycle timing guide offers useful context.
What’s at Stake in This Market
The obvious risk is overextending at a time when the cash rate is at a 13-year high and the RBA has shown it’s willing to keep hiking. Four rate rises in 2026 alone, with another possible in early November, means anyone borrowing near their limit is exposed. The less obvious risk is the opposite: waiting too long and watching the window on government support close, or getting priced out as construction costs eventually stabilise and demand rebounds.
What makes this moment unusual is the scale of government intervention. The Australian Government 5% Deposit Scheme has, since October 2025, operated with no cap on places and no income limits. Eligible first-home buyers can purchase with a 5% deposit without paying lenders mortgage insurance, with the government guaranteeing up to 15% of the property value. That’s a structural change, not a temporary incentive. The Help to Buy shared-equity scheme, which commenced 5 December 2025, goes even further — the government contributes up to 40% of the purchase price for a new home or up to 30% for an existing home, in exchange for an equity stake. You need a minimum 2% deposit, and there are 10,000 places per year, but for anyone who qualifies, it fundamentally changes the affordability equation.
On the construction side, there’s a quieter story that could matter just as much. China’s timber processors are operating with significant overcapacity — Chinese plywood exports rose 21% in the first half of the year as mills chased buyers abroad. Australia imported 254,065 cubic metres of laminated veneer lumber in 2025-26 at the lowest average import price in five years, and 656,014 cubic metres of plywood at similarly low prices. For anyone building or buying a new home, lower material costs could take some inflationary pressure off construction at a time when every dollar counts. But that’s a slow-moving benefit, not an immediate discount on the homes you’re looking at today.
The real stake is whether you can enter the market on terms that leave you room to breathe. That means knowing your numbers before you start shopping, understanding which schemes apply to you, and being honest about what you can actually afford. If you’re buying solo, the single buyer’s affordability guide covers the specific challenges of going it alone.
Where Buyers Slip Up
The most common mistakes in this market aren’t new, but the consequences are bigger when rates are high and every dollar of borrowing costs more.
Not checking borrowing power before you look
Pre-approval is free with most lenders and typically valid for three to six months. It tells you what a lender is likely to lend, subject to final approval, and it signals to vendors that you’re serious. Without it, you’re guessing. And guessing wrong means falling in love with a property you can’t afford, or worse, signing a contract and then discovering the loan won’t stack up.
Underestimating the costs beyond the deposit
A 20% deposit is the standard target to avoid lenders mortgage insurance — on an $800,000 property, that’s $160,000. But the deposit is only part of the picture. Budget 3–5% of the purchase price on top for stamp duty, conveyancing ($1,000–$2,500), building and pest inspections ($400–$800), loan application fees, and moving costs. Stamp duty alone typically runs around 3–4% of the purchase price, though many states offer concessions or exemptions for first-home buyers. The gap between what you’ve saved and what you actually need at settlement catches a lot of people.
Applying for pre-approval with multiple lenders at once
Every application leaves a mark on your credit file. A cluster of applications in a short window can dent your score, which is the opposite of what you want when a lender is assessing your reliability. A mortgage broker can match you to the right lender in one go, which avoids the scattergun approach. Since mid-2021, licensed brokers have been bound by a legal best-interest duty — they must act in your interest, offer several options, and make sure you understand what those options mean.
Skipping the building and pest inspection
Inspections cost money, but they’re cheap compared to discovering termite damage or structural issues after settlement. A flagged issue can also be used to negotiate a lower price or get the vendor to make repairs before the sale goes through. In a market where every dollar matters, skipping this step to save a few hundred dollars is false economy.
Not understanding how the schemes stack
The First Home Owner Grant, the 5% Deposit Scheme, Help to Buy, the First Home Super Saver Scheme, and state-based stamp duty concessions can all be used in combination, but the rules vary by state and by scheme. Help to Buy cannot be combined with the 5% Deposit Scheme, for example, but either can be used alongside the FHOG and stamp duty concessions. The details matter, and they change. Checking the latest eligibility criteria before you commit is the only safe move. If you’re struggling to decode what agents are actually telling you, decoding real estate agent language can help cut through the spin.
What You Actually Need to Know
The headline takeaway is that the barrier to entry has never been lower for eligible first-home buyers, but the ongoing cost of borrowing has never been higher in recent memory. Those two forces pull against each other, and which one wins depends entirely on your personal finances, your job security, and how long you plan to stay in the property.
The Schemes That Can Change Your Numbers
The government support available right now is more extensive than anything we’ve seen in the past decade. But each scheme has its own rules, price caps, and eligibility criteria, and they interact differently depending on where you live and what you’re buying.
First Home Owner Grant (FHOG)
This is a one-off payment funded by each state and territory, introduced in July 2000 to offset the GST effect on home ownership. It generally applies to new homes, off-the-plan purchases, or substantially renovated homes — not established properties. The amounts vary significantly by state: New South Wales offers up to $10,000, Victoria up to $10,000, Queensland up to $15,000, Tasmania $20,000, Western Australia up to $10,000, South Australia up to $15,000, and the Northern Territory offers $50,000 for new homes under the HomeGrown Territory Grant (contracts signed by 30 September 2027). The Australian Capital Territory replaced its FHOG in 2019 with the Home Buyer Concession Scheme and has abolished stamp duty for all first-home buyers, subject to final implementation.
First Home Super Saver Scheme (FHSS)
Introduced in July 2017, this scheme lets you make voluntary super contributions to save for your first home, then release those contributions when you’re ready to buy. You can contribute up to $15,000 per financial year and access up to $50,000 of eligible contributions per person — up to $100,000 for a couple. You need to request an FHSS determination from the ATO before signing a property contract, and funds typically arrive in 15–25 business days. You must intend to live in the property for at least six months within the first 12 months of ownership.
Australian Government 5% Deposit Scheme
Since 1 October 2025, this scheme has no cap on places and no income limits. Eligible first-home buyers can purchase with a 5% deposit without paying LMI, with the government guaranteeing up to 15% of the property value. You must be at least 18, an Australian citizen or permanent resident, and intend to live in the property as your principal place of residence. Property price caps apply and vary by location. The table below shows the current caps.
→ Scroll right to see all columns
| State/Territory | Capital city & regional centre | Rest of state |
|---|---|---|
| NSW | $1,500,000 | $800,000 |
| VIC | $950,000 | $650,000 |
| QLD | $1,000,000 | $700,000 |
| WA | $850,000 | $600,000 |
| SA | $900,000 | $500,000 |
| TAS | $700,000 | $550,000 |
| ACT | $1,000,000 | N/A |
| NT | Darwin: $750,000 | $600,000 |
Help to Buy (Shared Equity)
Commenced 5 December 2025 and available through participating lenders including CommBank and Bank Australia. The government contributes up to 40% of the purchase price for a new home or up to 30% for an existing home, in exchange for an equity stake. You need a minimum 2% deposit, must be an Australian citizen earning up to $103,000 as an individual or $165,000 as a couple or single parent, and cannot currently own another property. There are 10,000 places per year. Help to Buy has its own property price caps, which differ from the 5% Deposit Scheme in some areas — for example, the NSW Help to Buy cap is $1,300,000 compared to $1,500,000 under the 5% Deposit Scheme. You cannot combine Help to Buy with the 5% Deposit Scheme, but you can use it alongside the FHOG and state stamp duty concessions.
Stamp Duty Concessions
Stamp duty is a state tax on the transfer of property ownership and can be one of the largest upfront costs for first-home buyers. Many states and territories offer partial concessions or full exemptions for eligible first-home buyers. The savings depend on the property value and your location. As a general guide, stamp duty runs around 3–4% of the purchase price, but that varies significantly. The ACT has abolished stamp duty for all first-home buyers, and NSW offers a full exemption for properties under $800,000 under the First Home Buyers Assistance Scheme.
Frequently Asked Questions
What’s the minimum deposit I actually need? ▾
Can I use the 5% Deposit Scheme and Help to Buy together? ▾
How long does pre-approval last? ▾
Should I use a mortgage broker or go direct to a bank? ▾
What hidden costs should I budget for beyond the deposit? ▾
Your Readiness Matters More Than Market Timing
The honest answer to whether now is the time to buy is that it depends on your numbers, not the news cycle. Interest rates are high and may go higher, but the government support available right now — particularly the 5% Deposit Scheme with no caps or income limits — is genuinely unprecedented. Construction costs are showing signs of easing, which could help if you’re buying new, but that’s a slow-moving benefit. The record shift toward mortgage brokers reflects a market where getting the right loan structure matters more than ever, and the best-interest duty means brokers have to put your interests first.
What hasn’t changed is the basic discipline: know what you can borrow, understand the full cost of buying, check your eligibility for every scheme you might qualify for, and leave yourself enough financial room that a rate rise or two won’t tip you over. If you can do those things, the current market offers opportunities that didn’t exist a few years ago. If you can’t, waiting until your own finances are in better shape is the smarter play, regardless of what the cash rate is doing.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read Neighbourhood Secrets: Unlocking Suburb Potential Before You Buy.
Sources and Further Reading
The Single Buyer’s Guide: Finding a Home You Can Actually Afford in Australia — Practical advice for solo buyers navigating the market on one income.
The Secret Language of Aussie Real Estate Agents — How to read between the lines of property listings and agent speak.
Mortgage & Finance Association of Australia (2026). Mortgage broker market share reaches record 81.6%. 🔗
Mortgage & Finance Association of Australia (2025). New report captures the growing role of brokers across Australia. 🔗
Australian Government. Australian Government 5% Deposit Scheme — property price caps. 🔗
Australian Government. Help to Buy Scheme. 🔗
Australian Taxation Office. First Home Super Saver Scheme. 🔗
Wood Central (2026). China timber overcapacity — what it means for Australia. 🔗
The Conversation (2026). A record 82% of Australian home loans now rely on mortgage brokers — why. 🔗
NestPath (2026). How to buy a house in Australia — step-by-step guide. 🔗
Aussie Home Loans (2026). 11 tips for buying a home. 🔗
Aussie Home Loans (2026). First home buyer guide — government grants and concessions. 🔗
