Smarter Ways to Buy Your First Home

You’ve run the numbers more than once. The savings account balance isn’t growing fast enough, and that 20% deposit feels like it’s drifting further out of reach. For many first-home buyers, this is a familiar story, and one that government schemes can help rewrite.

Two initiatives, the First Home Super Saver Scheme (FHSS) and the First Home Guarantee, are designed to ease the deposit hurdle. Used together, and with the right advice, they could make home ownership more achievable.

How much do you really need for a deposit?

In Australia, most lenders prefer a 20% deposit to avoid Lenders Mortgage Insurance (LMI). For example:

• On a $650,000 home, that’s $130,000.

• On an $800,000 home, it’s $160,000.

That can be daunting, but the First Home Guarantee allows eligible buyers to purchase with just a 5% deposit, while the government covers the risk usually managed by LMI.

As Financial Advisor Shane Fisher notes, “for many clients, this difference between a 20% and 5% deposit is the real game-changer. It can mean getting into the market years sooner.”

Can I use my super to buy my first home?

Yes, but only under the First Home Super Saver (FHSS) Scheme. You can’t buy a property directly from your super balance. Instead, you can make voluntary contributions and later apply to the Australian Tax Office (ATO) to withdraw up to $50,000 (capped at $15,000 per year) to use towards your deposit.

The ATO manages all FHSS release requests. Once they approve and release the funds, you’ll have 12 months to sign a purchase or building contract.

Because concessional contributions are taxed at 15% instead of your marginal rate, your savings may grow faster than in a standard bank account.

How much tax do I pay on FHSS?

Money you put into super under FHSS is taxed at 15% when it goes in. Later, when you withdraw it, the ATO will tax it at your normal income tax rate but give you a 30% tax offset. In most cases, this means you end up paying less tax overall, which is why FHSS can help your savings grow faster than if you used a regular bank account.

The benefits at a glance

Here’s how saving for a deposit compares with and without these schemes:

As Shane explains, “This side-by-side view often surprises clients; many assume they’ll need the full 20% deposit, but understanding how FHSS and the Guarantee work together can change the picture entirely.”

What are the risks and limitations?

• Eligibility rules: Not all super funds support FHSS, and not all properties qualify for the First Home Guarantee.

• Contribution caps: You can only contribute $15,000 per year and $50,000 in total under FHSS.

• Withdrawal timing: FHSS release requests can take 15–25 business days, so planning is essential.

• Flexibility: Money contributed to FHSS is locked away until release is approved.

Why getting advice matters?

Government schemes can open doors, but they also come with complexity. A financial adviser can help you:

• Decide whether FHSS suits your circumstances.

• Maximise your deposit strategy without breaching caps.

• Confirm eligibility for the First Home Guarantee and state-based concessions.

• Balance your short-term goal of home ownership with your long-term retirement planning.

The bottom line

Buying your first home is one of life’s biggest milestones, but it doesn’t have to feel overwhelming. With the right advice and strategy, you can make sense of the options, avoid missteps, and create a deposit strategy that works for you. Start the conversation today and take one step closer to your new front door.