Saving for a first home deposit sounds simple on the surface, but for most first home buyers it quickly becomes confusing:

• How much do I actually need?
• What counts as a deposit?
• Can grants or schemes reduce what I need to save?

This guide explains what a deposit actually is, how much you might need, the government schemes and grants that can help first home buyers across Australia (specifically in Victoria), and common deposit mistakes that delay approvals.

What Is a Deposit?

A deposit is the amount you contribute towards buying a property before the bank lends the rest. This is often referred to as funds to complete.

There are two different things people mean when they say “deposit”:

Contract Deposit

If you buy a home for $600,000, the contract will usually require a 10% deposit which is $60,000. If you’re using the Australian Government 5% Deposit Scheme, you may be able to negotiate a lower contract deposit. Your broker and conveyancer can guide you on what’s possible.

Funds to Complete (Total Contribution)

This refers to the total amount of your contribution to the purchase of your home.

You’ll often hear, “You’ll only need a 5% deposit to buy with a government grant or scheme” which is not entirely accurate and a bit misleading. There are other costs and fees that you need to contribute to complete the purchase of your home. These costs include stamp duty (if applicable), government transfer and mortgage registration fees, conveyancing, building and pest inspections plus moving costs. We’ll refer to the amount you need to contribute as your “deposit plus costs.”

How Much Do First Home Buyers Actually Need?

There’s no one number, but many buyers fall into these categories:

20% deposit + costs

This is the traditional benchmark. 20% helps you avoid paying Lenders Mortgage Insurance (LMI) without a scheme or grant. 🔗 What is LMI? Click here.

5% deposit + costs

You may be able to buy with a lower deposit and avoid LMI through the Australian Government’s 5% Deposit Scheme. 🔗 Read official Australian Government 5% Deposit Scheme info here.

2% deposit + costs | single parents or guardians

If eligible, the Australian Government 5% Deposit Scheme allows single parents or legal guardians to purchase with as little as 2% deposit, without Lenders Mortgage Insurance. This is a government guarantee (not shared equity) and you still own the property.
🔗 Read more info here.

What Can Count Towards Your Deposit?

A deposit / “funds to complete” can include:

• Money you’ve saved
• Existing cash in your accounts
• A gift from family or friends
• Proceeds from selling an asset such as a car
• Funds withdrawn under the First Home Super Saver Scheme (FHSS)

🔗 Read official FHSS details

The deposit amount matters, but so does the story behind the money. Understanding this early helps you avoid moving funds around in ways that can complicate an application later.

Genuine Savings

This is one of the biggest “wait, what?” moments for first home buyers.

Genuine savings is the part of your funds that shows you have been able to save consistently over time, based on the lender’s policy. This matters more often with low deposit lending, and policies differ between lenders.

A quick recap on genuine savings can be found in the previous article by clicking here.

Grants & Schemes That Can Help First Home Buyers in 2026

FEDERAL GOVERNMENT SCHEMES

Government support for first home buyers has expanded significantly in 2025–26. Here’s a breakdown of the main federal schemes that can help you buy sooner with smaller deposits or equity support. Always check official sources for eligibility and up to date details.

1. Australian Government 5% Deposit Scheme

This is the core federal program designed to help more Australians buy a home sooner with a low deposit and no Lenders Mortgage Insurance (LMI). The scheme includes two distinct eligibility pathways:

5% deposit – First Home Buyers

For eligible first home buyers who have not owned property in Australia in the last 10 years. You must be an Australian citizen or permanent resident and plan to live in the home. Applies to both existing and new homes, subject to property price caps. 🔗 Read more info here.

2% deposit – Single Parents or Legal Guardians

For eligible single parents or single legal guardians with at least one dependent child. You do not need to be a first home buyer, but must intend to live in the home. Applies to both existing and new homes, also subject to property price caps and eligibility depends on your personal circumstances and participating lenders. 🔗 Read official 2% deposit info here.

2. Help to Buy Scheme

This shared equity initiative assists eligible buyers who are short of the deposit needed to buy a home that meets their needs. Under Help to Buy:

• The government can contribute up to 40% of the purchase price for new homes and 30% for existing homes as a shared equity contribution, reducing how much you need to borrow.
• You must have saved a minimum 2% deposit and meet other eligibility criteria including being an Australian citizen aged 18+ and planning to live in the home.
• Property price and income caps apply and can vary by state and circumstance, so check the official scheme page for further details. 🔗 Read official Help to Buy Scheme details

This scheme is useful if you’ve saved some deposit but still need help bridging the gap to a home you want to buy. Shared equity can reduce your borrowing needs and repayments.

Shared equity means the government holds an equity interest in your home. You own the title, and the government share moves with property value changes.

3. First Home Super Saver Scheme | FHSS

The FHSS allows eligible first home buyers to withdraw voluntary super contributions (plus associated earnings) of up to $50,000 to use as part of their deposit. This helps many buyers grow their deposit faster because super contributions are taxed at a lower rate inside super. 🔗 Read official FHSS details

You can combine FHSS with the 5% Deposit Scheme or Help to Buy to strengthen your funds toward a purchase.

STATE GOVERNMENT GRANT | VICTORIA

4. State First Home Owner Grants & Stamp Duty Concessions

In addition to federal support, state governments offer their own incentives. For example, in Victoria you can access:

• A $10,000 First Home Owner Grant when buying or building a new home under certain conditions.
• Stamp duty exemptions or concessions on properties under a certain price threshold.

🔗 Read official Victorian First Home Owner Grant details info here.

🔗 Read official Victorian stamp duty concessions info here.

State incentives can stack with federal schemes, further reducing upfront costs, another reason to talk early with your broker about eligibility.

If you’re looking for shared equity in 2026, you must now use the Federal ‘Help to Buy’ scheme, as the Victorian Homebuyer Fund (VHF), the state-based 25% equity scheme, closed to new applications in September 2025.

How a Broker Helps

Navigating the 2026 landscape requires requires a strategy to align differing government rules. Your broker plays a key role in:

Navigating the “Cap Gap”: Because Federal price caps are higher than State Grant thresholds, we calculate the exact funds to complete (deposit + costs) you need. Buying at $800k instead of $750k could cost you an extra $40,000 in upfront taxes, we make sure there are no surprises.

• Income vs. Equity Strategy: While the Guarantee schemes no longer have income limits, the Help to Buy scheme still does. A broker will analyse your taxable income to see if you qualify for the shared equity model, which could significantly lower your monthly repayments.
• Factoring Genuine Savings: Even with a government guarantee, banks still want to see a history of savings. We help you present your “story” to the lender, ensuring that gifts, FHSS withdrawals, or asset sales are documented so your application isn’t stalled.
• Managing the Transition: We ensure you are applying for the correct current Federal alternatives and managing the paperwork with participating lenders.
• Clarifying Scheme Caps vs. Bank Serviceability: While Guarantee schemes don’t have income caps, lenders still assess serviceability — whether your income is sufficient to meet the loan repayments now and into the future, after allowing for your living costs, existing commitments, and required lender buffers. We review both scheme eligibility and bank serviceability early, so you understand both what the scheme allows and what a bank will approve before committing to a price range.

In most cases, your broker will manage the entire application process including working with lenders who participate in government schemes, and advising you on the right timing, paperwork, and steps. If a grant or scheme is available to you, they’ll make sure you’re set up to take full advantage of it.

📌 Disclaimer

This article was written on 23 January 2026. Scheme names, eligibility rules, property price caps and lender policies can change. Always check with your broker and official government sources before making decisions.