First Home Buyer Loans in Australia: What You Need to Know in 2025

Buying your first home is one of life’s biggest milestones—and in 2025, it's still a goal within reach for many Australians. While navigating the home loan landscape can feel overwhelming, understanding your options, responsibilities, and available support can make a big difference.

This guide breaks down the essentials of first home buyer loans in Australia, helping you approach your journey with clarity and confidence.

1. What Is a First Home Buyer Loan?

A first home buyer loan isn’t a specific loan product—it refers to any mortgage option suited to people purchasing their first home. First-time buyers often have unique financial circumstances, so lenders may offer specialised products, lower deposit options, or access to government support schemes to help get you on the property ladder.

2. What Government Schemes Are Available in 2025?

First home buyers may be eligible for government initiatives designed to reduce upfront costs or make ownership more accessible. These include:

🏡 First Home Guarantee (formerly FHLDS)

Allows eligible buyers to purchase a home with as little as a 5% deposit, with the government guaranteeing up to 15% to avoid Lenders Mortgage Insurance (LMI).

💰 First Home Owner Grant (FHOG)

A one-time grant (varies by state) for first-time buyers purchasing or building a new home. Check your state’s specific eligibility criteria.

📉 Stamp Duty Concessions

Many states offer full or partial exemptions on stamp duty for eligible first home buyers. The thresholds and rules vary, so it's best to confirm with your local government or a licensed broker.

Note: Eligibility depends on your circumstances, the property value, and the location.

3. How Much Can I Borrow as a First Home Buyer?

How much you can borrow depends on:

• Your income

• Existing debts or expenses

• Credit score

• Deposit size

• The lender’s policies

  
  

In general, lenders apply a serviceability assessment to determine your ability to repay the loan. They will also consider your total loan-to-value ratio (LVR), which impacts whether LMI applies.

4. What Type of Loans Are Available?

First home buyers typically choose from:

✅ Variable Rate Loans

• Interest rate can change over time.

• May include features like offset accounts and redraw facilities.

  
  

🔒 Fixed Rate Loans

• Interest rate stays the same for a set term (e.g. 2 or 3 years).

• Helps with budgeting, but may limit flexibility.

  
  

💡 Split Loans

• Combines fixed and variable components.

• Offers a balance of stability and flexibility.

  
  

Choosing the right structure depends on your goals, risk appetite, and need for flexibility.

5. What’s the Process for Getting a First Home Loan?

Here’s a general roadmap:

1. Assess your finances – including income, savings, debts.

2. Set a budget – know your borrowing power and buying range.

3. Get pre-approval – to show agents you're a serious buyer.

4. Find your property – choose a home that meets your needs.

5. Formal application – your broker submits paperwork to the lender.

6. Loan settlement – when funds are transferred and you're officially a homeowner.

   
   

An Evolve mortgage broker can guide you through each step—especially helpful when navigating lender requirements and comparing options.

6. How Can a Mortgage Broker Help First Home Buyers?

Working with a broker means:

• Access to multiple lenders and loan products

• Support with paperwork and eligibility checks

• Help understanding complex terms or requirements

• Guidance on applying for relevant government schemes

  
  

Most brokers are paid by the lender once your loan settles, so there's usually no direct cost to you for their service.

7. What Should You Watch Out For?

First home buyers should be mindful of:

• Hidden costs (e.g. conveyancing, building inspections, moving)

• LMI if borrowing over 80% of the property value

• Loan features—understanding what you need now and in future

• Overstretching—always allow a buffer in your budget for rate changes

Final Thoughts

Getting into the property market can feel daunting—but with the right information and support, you can move forward with confidence. Understanding your borrowing power, government assistance, and loan options will help you make smarter decisions that support your long-term goals.

✅ Ready to take the first step?

Book a consultation with a broker at Evolve today. We’ll help you assess your situation and walk you through your first home loan journey—clearly and confidently.

Disclaimer: This article is for general informational purposes only and does not constitute financial, credit, or legal advice. Please consult a licensed broker or financial adviser to assess your individual circumstances.