Small deposit? Owning your first home is now easier

Owning your first home might seem like a distant goal, especially with rising house prices and the long-held belief that you need a hefty deposit to secure a mortgage. However, with government schemes, financing options, and house-and-land packages tailored for first-home buyers, getting into the market may be easier than you think.

Why is it now easier to buy your first home with a small deposit?

Buying your first home with a small deposit has become more achievable thanks to the Australian Government's support designed to reduce the upfront costs of home ownership. Low deposit schemes help eligible first home buyers enter the property market sooner by lowering the amount needed upfront and reducing reliance on costly alternatives.

These changes are particularly helpful for buyers looking to secure affordable house and land packages while managing overall borrowing and loan repayments.

Key reasons it’s easier to buy with a small deposit:

• Australian Government low deposit schemes can support eligible first home buyers by reducing the deposit required to secure a home loan.
• Lower upfront costs mean buyers may not need to save a full 20% deposit before purchasing a home.
• Reduced lenders mortgage insurance (LMI) requirements under certain schemes can help lower the overall cost of buying a home.
• Participating lenders offer home loans tailored to buyers using low deposit pathways.
• Affordable house and land packages provide a structured way to manage build costs and home loan repayments.
• Expanded eligibility means more Australians, including single parents and smaller households, may qualify for low deposit options.

What are your main low-deposit options as a first home buyer?

First home buyers have several low deposit pathways available, depending on their eligibility, income, and property choice. These options are designed to help buyers purchase a home sooner while managing upfront costs and long-term loan commitments. Understanding how each option works can help you choose the most suitable path to home ownership.

• First Home Guarantee Scheme: The FHBG is one of the most effective ways for eligible buyers to enter the market sooner, but key criteria must be met to take advantage of it. Applicants must be first-home buyers purchasing an owner-occupied property and meet income thresholds. Notably, the scheme also has property price caps depending on location, which buyers should be aware of when searching for their new home.
• Low deposit home loans: Some lenders offer home loans with a smaller deposit requirement, particularly when combined with government-backed schemes or strong income and borrowing capacity.
• Affordable house and land packages: These packages can simplify budgeting by combining land and build costs into one structured purchase, making it easier to plan repayments with a low deposit.
• Guarantor home loans: A family member may offer a limited guarantee to help reduce the required deposit, allowing buyers to secure a home loan sooner.
• Specialist low deposit loan products: Certain lenders provide tailored loan options for eligible first home buyers, including single parents and smaller households, subject to income caps and eligibility criteria.

How does a small deposit change your buying or building timeline?

Choosing to buy or build with a small deposit can significantly affect how quickly you move through the home buying or building process. By reducing the time spent saving upfront, low deposit options allow first home buyers to progress sooner from planning to securing finance and taking the next steps toward home ownership. However, while the timeline may accelerate, it’s still important to understand how each stage is impacted when using a smaller deposit.

Saving time is reduced

A smaller deposit means you may not need to spend as long saving before entering the property market. Instead of waiting years to reach a traditional 20% deposit, eligible first home buyers can move forward with a low deposit and focus on meeting lender and scheme requirements sooner.

Loan pre-approval can happen earlier

With a smaller deposit requirement, buyers may be able to seek pre-approval earlier in the process. This can provide a clearer understanding of borrowing capacity and help narrow down suitable homes, affordable house and land packages, or build options within budget.

Faster access to suitable properties or land

Entering the market sooner allows buyers to secure land or a home before prices potentially rise further. This can be especially helpful when building, as it gives buyers more flexibility around land availability and build timeframes.

Building timelines can align more closely with approvals

For those building a new home, a low deposit pathway can help align finance approval with construction schedules. This may reduce delays between securing land, finalising contracts, and starting the build process.

Repayments begin earlier, but planning remains essential

While a small deposit can accelerate the path to home ownership, repayments start sooner as well. Buyers need to plan carefully for ongoing loan repayments, interest rates, and other costs to ensure the timeline remains financially sustainable.

What should you consider before committing to a small-deposit home loan?

Before choosing a small-deposit home loan, it’s important for first home buyers to understand how a lower deposit can affect borrowing, repayments, and long-term affordability. While low deposit options can help you enter the market sooner, they may also influence loan conditions and overall costs. Taking time to consider these factors can help you make a more informed decision about home ownership.

Considerations for small-deposit home loans:

• Loan repayments
• Interest rates
• Lenders mortgage insurance
• Borrowing limits
• Eligibility criteria
• Income and employment stability
• Long-term affordability

Ready to explore small-deposit home ownership options?

Buying your first home with a small deposit is more achievable with the right guidance. Carlisle Homes helps buyers explore low-deposit pathways by providing expert support, clear information, and affordable house and land packages designed to suit first home buyers. With guidance at every stage, buyers can move forward with greater confidence toward home ownership. Contact us, and we’ll explore your options together.