Buying a first home in Victoria: deposit, schemes, duty and the loan.

The deposit is two numbers, not one

A lender sees a deposit as two things at once. The deposit affects the amount borrowed. The lender’s accepted property value and lending policy also affect the loan to value ratio and whether lenders’ mortgage insurance is required. The second is the amount you have left over after settlement for duty, legal costs, moving and a buffer. Buyers who count the whole balance as deposit are surprised at settlement, so the working starts with the costs and works backwards to the deposit.

Where the money comes from matters as much as how much there is. Lenders look for genuine savings, usually meaning funds held or accumulated over at least three months, because they show the habit of putting money aside. A gift from family counts with most lenders when it is documented as a gift and not a loan, and some want to see it held in your account for a period first. A parental guarantee secured over the parents’ property can replace part of the deposit altogether and remove insurance, at the cost of putting their property in the structure until the guarantee is released.

Money released from super under the First Home Super Saver Scheme is also deposit. Eligible voluntary contributions of up to $15,000 a financial year and $50,000 in total can count towards an FHSS release. The amount available, including associated earnings, depends on the contribution type and the ATO determination. Plan the timing before committing to a purchase: under the rules for determinations made on or after 15 September 2024, a release request can be made before signing the contract or within 90 days afterwards, subject to the scheme’s requirements. Obtain the ATO determination before ownership transfers, follow the ATO’s contract notification rules, and allow for processing time. The contributions themselves are a decision for the years before the purchase.

The 5% Deposit Scheme, after the October 2025 changes

The Australian Government 5% Deposit Scheme can help eligible first home buyers buy a home to live in with a deposit as low as 5%, without lenders’ mortgage insurance, subject to scheme conditions and participating lender assessment. From 1 October 2025 the income caps were removed, the annual limit on places was removed, and the property price caps were lifted. In Melbourne and Geelong the cap is $950,000; in the rest of Victoria it is $650,000.

The scheme is delivered through participating lenders, not every lender, and each applies its own credit assessment on top of the scheme rules. You still need to service the loan on the lender’s assessment rate, still need the funds for duty and costs, and still buy within the cap. The loan is larger than it would be with a 20% deposit and the repayments follow, so the tools on this site let you see the repayment before you commit to the price. Eligibility is confirmed with the lender when the application is lodged; nothing on this page reserves a place.

Help to Buy, the shared equity alternative

Help to Buy is a Commonwealth shared equity scheme. The government contributes up to 30% of the price of an existing home or 40% of a new one in exchange for an equivalent share of the property, and you buy the rest with a deposit of at least 2% and a loan for the balance. Taxable income caps of $103,000 for an individual applicant and $165,000 for joint applicants or eligible single parents apply, along with location-specific property price caps. The government share is repaid on sale or through buybacks, with repayment obligations also subject to the scheme’s ongoing reviews and conditions.

The trade-off is the share. Repayments are lower because the loan is smaller, but part of any growth in value belongs to the Commonwealth, and the arrangement carries conditions on how the property is used and on buying the share back. A deposit shortfall alone does not establish eligibility or suitability; both depend on the scheme conditions and the buyer’s circumstances. Whether it is the right structure is a question for your own financial and legal advisers as much as for the lender; our part is the loan against your share.

The Victorian concessions: duty, the grant and what has closed

Victorian land transfer duty may be reduced or waived where the buyer and transaction meet the relevant exemption or concession conditions. Duty is waived entirely where the dutiable value is $600,000 or less and reduced on a sliding scale between $600,001 and $750,000. Above $750,000 the full rate applies. The stamp duty tool on this site calculates the Victorian figure with the first home buyer position selected, beside the other states for comparison.

Eligible first home buyers who meet the applicant and residence requirements may receive the $10,000 grant for a qualifying new home valued at $750,000 or less. Established homes do not attract the grant. The Victorian Homebuyer Fund, the state shared equity program that many older articles refer to, has closed to new applicants; the Commonwealth Help to Buy scheme is the current shared equity route. The temporary concession covers qualifying off-the-plan dwellings in strata subdivisions with common property, for contracts entered into on or after 21 October 2024 and before 21 April 2027. It deducts eligible construction costs incurred on or after the contract date from dutiable value. Whether it applies to your contract depends on the contract date and the property type, so check the State Revenue Office before relying on it.

How the lender assesses you

Every lender runs your income and commitments through a serviceability calculation. Income treatment and evidence requirements depend on the lender, income type and its stability. Commitments include every credit card limit whether used or not, car loans, buy now pay later accounts, and HELP debt. The repayment is tested at the lender’s assessment rate. APRA requires the banks and other authorised deposit-taking institutions it regulates to use a buffer of at least three percentage points above the loan rate, and assessment policies differ from lender to lender beyond that. The result is your borrowing power with that lender, and it varies between lenders by more than most buyers expect.

Since 1 February 2026, APRA has also limited the share of an APRA-regulated ADI’s new mortgage lending that can go to borrowers whose total debt is six or more times their income to 20%, measured separately for owner-occupier and investor lending, with exemptions that include loans to buy or build a new dwelling. It is a limit on the lender’s portfolio, not a ceiling or an entitlement for any one borrower, and it is one more reason the lender is chosen after the assessment rather than before it.

Pre-approval is the lender’s indication that it would lend a stated amount on the information provided, subject to a valuation and a final check. Pre-approval is not unconditional approval. Its conditions and expiry depend on the lender, and it may be withdrawn if relevant circumstances change. It is still worth having before you bid at auction, because an auction contract is unconditional.

Structure it so you do not undo it in three years

The first loan is often the one people live with longest, so the structure deserves as much attention as the rate. An offset account gives you somewhere to hold savings against the loan while keeping them available. A split between fixed and variable gives certainty on part of the repayment without locking the whole loan. Extra repayments and redraw are subject to the loan’s limits, fees and conditions. These features are not right for everyone and may involve additional costs, so the recommendation follows the assessment and is provided in writing.

A first home often becomes an investment property later, when you upgrade and keep it. How the loan is set up now affects how cleanly that change can be made, particularly around offset balances and redraw. If that is a possibility, say so at the start; it changes the recommendation.