First Home Buyer Total Cost in 2026: What You Actually Need With a 5% Deposit
On a $750,000 first home using the Australian Government 5% Deposit Scheme, you need roughly $41,400 to $50,400 in cash. Not $150,000.
That's the deposit plus every other cost that lands between the contract and the first mortgage payment. The scheme removed the two biggest barriers on 1 October 2025 when places became unlimited and income caps were scrapped, so the arithmetic below now applies to a lot more people than it did a year ago.
| Cost at settlement, $750,000 purchase | Low | High |
|---|---|---|
| Deposit (5%) | $37,500 | $37,500 |
| Lenders mortgage insurance | $0 (waived) | $0 (waived) |
| Stamp duty (FHB concession) | $0 | varies by state |
| Conveyancing or solicitor | $1,200 | $2,500 |
| Building and pest inspection | $500 | $900 |
| Loan application and settlement fees | $0 | $800 |
| Council and water rate adjustments | $300 | $1,200 |
| Home and contents insurance, year 1 | $800 | $2,000 |
| Removalists | $600 | $2,500 |
| Connections, locks, immediate essentials | $500 | $3,000 |
| Total cash needed | $41,400 | $50,400 |
Assumes a first home buyer stamp duty concession applies in full. If it doesn't, add your state's duty on top.
Get your state's duty in the Stamp Duty Calculator, check what LMI would cost without the scheme in the LMI Calculator, see what a lender would approve in the Borrowing Capacity Calculator, and test the repayment in the Home Loan Repayment Calculator.
What changed on 1 October 2025
The Home Guarantee Scheme was renamed the Australian Government 5% Deposit Scheme, and three limits came off at once.
- Places are unlimited. No more racing to secure one of a fixed number of spots each financial year.
- Income caps are gone. Higher earners can now use it.
- Price caps went up across every stream.
The mechanism is unchanged. You put in 5%, the government guarantees up to 15% of the property value to your lender, and you skip lenders mortgage insurance entirely. You still borrow 95%. The guarantee protects the bank, not you.
Property price caps by state
| State or territory | Capital city and regional centre cap |
|---|---|
| NSW | $1,500,000 |
| VIC | $950,000 |
| QLD | $1,000,000 |
| WA | $850,000 |
| SA | $900,000 |
| TAS | $700,000 |
| ACT | $1,000,000 |
| NT | $600,000 |
Regional centres include Illawarra, Newcastle and Lake Macquarie in NSW, Geelong in Victoria, and the Gold Coast and Sunshine Coast in Queensland. Everywhere else in each state sits under a lower cap, so check the postcode tool on the Housing Australia site before you get attached to a listing.
What the small deposit costs you
The scheme saves you the LMI premium. It doesn't make the loan smaller, and that's where the real money is.
| $750,000 purchase | 5% deposit | 20% deposit |
|---|---|---|
| Cash for deposit | $37,500 | $150,000 |
| Loan | $712,500 | $600,000 |
| LMI without the scheme | ~$21,000 | $0 |
| Repayment at 6%, 30 yr | $4,272/mo | $3,597/mo |
| Interest over 30 years | $825,000 | $695,000 |
The smaller deposit costs $674 more per month and roughly $243,000 more in interest across 30 years. That's the trade. You buy years earlier and pay for the privilege.
Whether that's a good deal depends on what the property does and what rent would have cost you in the meantime. The Rent vs Buy Calculator is the right place to argue it out with yourself.
Stamp duty is the wildcard
It's the single largest variable in the table above, and it's entirely dependent on where you're buying.
NSW exempts first home buyers under $800,000 with a concession up to $1 million. Victoria exempts under $600,000 with a concession to $750,000. Queensland, WA, SA, Tasmania, the ACT and NT each run their own thresholds and their own rules about new versus established homes.
Get the number for your state and price point rather than assuming. Start with the Stamp Duty Calculator, or go straight to your state page: NSW, VIC, QLD, SA, WA. Then confirm against your state revenue office, because these thresholds change with every budget.
The costs that catch people at settlement
Rate adjustments
The seller has usually pre-paid council and water rates for the quarter. You reimburse them for the portion after settlement. It's small, it's unavoidable, and almost nobody budgets for it. Typically $300 to $1,200.
Insurance starts earlier than you think
In most states you're responsible for the building from exchange of contracts, not from settlement. That means paying the first year's premium weeks before you have keys.
The payday gap
You move in on a Friday, the first mortgage payment hits within a month, and you've just spent everything on settlement. Keep $3,000 to $5,000 back that you refuse to spend on furniture. Set it up in the Savings Goal Calculator as a separate target from the deposit.
Can you actually service the loan?
Getting the cash together is step one. The lender's assessment is step two, and it now has an extra hurdle.
Since February 2026, APRA limits banks to writing no more than 20% of new mortgage lending at a debt-to-income ratio of six times or above. A household on $130,000 borrowing $712,500 sits at 5.5 times, which is fine. Push the purchase price up and that ratio climbs fast.
Lenders also assess you at your rate plus 3 percentage points. On a $712,500 loan, that means proving you could handle roughly $5,700 a month, not $4,272. Check where you land in the Borrowing Capacity Calculator before you make an offer.
The bottom line
The 5% Deposit Scheme drops the cash requirement on a $750,000 purchase from around $150,000 to somewhere between $41,400 and $50,400, and saves roughly $21,000 of LMI.
It doesn't reduce what you borrow. Budget for the full cash figure, not the deposit, and make sure the repayment on a 95% loan still works when you test it 3 points higher.
FAQ
How much cash do you need to buy a first home with a 5% deposit?
On a $750,000 purchase, roughly $41,400 to $50,400. That's the $37,500 deposit plus conveyancing, inspections, insurance, rate adjustments, moving and loan fees, assuming the scheme waives LMI and a first home buyer stamp duty concession applies. Without the scheme, add about $21,000.
What are the property price caps for the 5% Deposit Scheme?
For capital cities and designated regional centres from 1 October 2025: $1,500,000 NSW, $1,000,000 QLD and ACT, $950,000 VIC, $900,000 SA, $850,000 WA, $700,000 TAS, $600,000 NT. Other areas have lower caps.
Is there still an income cap on the First Home Guarantee?
No. Income caps and the cap on places were both removed on 1 October 2025.
Does the 5% Deposit Scheme actually save you money?
It saves the LMI premium, around $21,000 on a $712,500 loan. It doesn't reduce your loan. Borrowing $712,500 instead of $600,000 costs about $674 more a month.
What costs do first home buyers most often forget?
Council and water rate adjustments, the first year of building insurance, and the gap between moving in and payday. Together, commonly $2,000 to $5,000, all landing in the same fortnight.
Sources checked August 22, 2026: Housing Australia on unlimited places and higher property price caps from 1 October 2025, the First Home Guarantee pages and scheme FAQs, Treasury on home ownership support, and Moneysmart on lenders mortgage insurance. Stamp duty concessions are set by each state and change often, so confirm with your state revenue office.
Participating lenders vary and so do their rates. A loan specialist can tell you who is offering the scheme, what you would be approved for, and whether a bigger deposit would actually leave you better off.