A first home buyer loan is a standard home loan combined with the concessions available to first-time purchasers: a 5% deposit under the federal Home Guarantee Scheme with no Lenders Mortgage Insurance (LMI), state first home owner grants and stamp duty concessions, and lender policies that accept genuine savings, gifts or a family guarantee as deposit. A broker's job is to work out which combination gets you into a home sooner without over-stretching the repayments.
This page is for people researching first home buyer loans and related options such as first home buyer home loan, first home mortgage broker, first home buyer pre approval. It explains how this type of finance generally works, who it may suit, the issues that can affect lender approval, common scenarios and the steps involved from initial review through to settlement or funding.
Every application is assessed on its own facts. Property or asset value, income, expenses, existing debts, credit conduct, entity structure and lender policy can all change the outcome. The information below is general and is designed to help you ask better questions before choosing a lender or loan structure.
First home buyers usually need to plan for more than the deposit. Depending on the state, property and eligibility, costs can include stamp duty, conveyancing, inspections, adjustments at settlement and Lenders Mortgage Insurance. Government programs may reduce some costs or deposit barriers for eligible buyers, but the rules and place availability can change, so current eligibility should be checked before relying on a scheme.
A properly assessed pre-approval can help you understand a likely borrowing range before you start making offers. It is still conditional: the lender normally needs to accept the property, confirm any outstanding documents and ensure your circumstances have not materially changed. A pre-approval is a useful planning tool, not a guarantee that every property or contract will be acceptable.
The amount a lender may approve and the amount you feel comfortable repaying are not necessarily the same. We can model repayments at different purchase prices and rates so you can consider how the mortgage fits alongside living costs, savings goals and future plans instead of using borrowing capacity as the only budget guide.
Broker's Guide
What you need to qualify, what to have ready, where lender policies genuinely differ, and the mistakes we see most often. General information — every application is assessed on its own facts.
Scenario 1
Situation: Combined income $165k, $48k saved, renting for $2,400/month in Hobart.
How we'd approach it: Home Guarantee Scheme at 5% deposit keeps $13k aside for costs; rent history covers genuine savings; pre-approval set at a price that keeps repayments below current rent plus $400.
Scenario 2
Situation: Income $92k, $15k saved, parents own their home outright.
How we'd approach it: Family security guarantee limited to 20% of the purchase price avoids LMI and the scheme's price cap; guarantee released once the loan sits under 80% LVR.
Scenario 3
Situation: Started a permanent role 6 weeks ago after two years in the same industry.
How we'd approach it: Choose a lender that accepts probationary income with an employment letter; hold other lenders as the fallback if the contract is queried.
Our Approach
We start by understanding the full scenario and what you want the finance to achieve. Depending on the transaction, our work can include:
Real Situations
First-home-buyer finance can look very different depending on deposit size, scheme eligibility and whether the purchase is established or new. Common situations include:
Step by Step
Review income, savings, debts and expected purchase timeframe
Calculate a realistic borrowing and purchase range
Estimate deposit, stamp duty and other buying costs
Check current eligibility for relevant first-home-buyer pathways
Compare suitable lenders and loan structures
Arrange pre-approval where appropriate
Support you while you search and make an offer
Submit the property for formal approval
Complete loan documents and settlement
A loan approval is only one part of the process. Derwent Finance focuses on understanding the objective, comparing lender policy and helping manage the application from initial strategy through to settlement. We assist borrowers across Australia with home loans, refinancing, investment, construction, self-employed, complex, commercial and business finance scenarios.
Where the best outcome is to keep an existing loan or wait until the borrower’s position changes, the recommendation should reflect that rather than moving a loan simply to create a transaction.
FAQs
It depends on the purchase price, lender, property and whether you qualify for a government or guarantor pathway.
Potentially. Lower-deposit options exist for eligible borrowers.
No. LMI depends on LVR and structure, and some eligible pathways can reduce or avoid it.
Borrowing capacity depends on income, expenses, debts, dependants, credit limits and lender policy.
It can be helpful because it gives you a clearer borrowing range before making offers.
Potentially through a gift, family guarantee or another lender-accepted structure.
Still have questions? Speak with our team
Ready to understand your options? Book a Strategy Call with Derwent Finance. We can review your current position, what you want to achieve and which lending pathways may be available.
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General information only. Credit assistance is subject to individual circumstances and lender criteria. Interest rates, fees, lender policy, government schemes and eligibility can change without notice. This website does not provide legal, taxation or financial advice. Content last reviewed: August 2026.
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