Buying your first home in Sydney can feel out of reach, but in 2026 there are three government schemes that, used together, can dramatically cut the deposit and upfront costs you need. Here is a plain-English guide to the deposit, the grants and the stamp duty rules, and how a first home buyer can combine them.
How much deposit do you need to buy a first home in Sydney?
Normally lenders want a 20% deposit to avoid Lenders Mortgage Insurance (LMI). But as a first home buyer you may be able to buy with as little as a 5% deposit and pay no LMI, using the federal First Home Guarantee. On an $800,000 home, that is the difference between saving $160,000 (20%) and $40,000 (5%).
If you do not use a scheme, a smaller deposit is still possible, but you will usually pay LMI, a one-off cost that protects the lender, not you.
The First Home Guarantee (5% deposit, no LMI)
Under the First Home Guarantee, the government guarantees the gap between your deposit and 20%, so the lender waives LMI. The scheme was expanded on 1 October 2025 and the current rules are far more generous:
- 5% deposit, no LMI: any deposit between 5% and 19.99% gets the same waiver.
- No income cap: the old $125k single / $200k couple limits were removed.
- Unlimited places: you no longer have to race for a limited allocation.
- Sydney property price cap of $1.5 million: up from $900,000, bringing many Sydney apartments and some houses into range.
You generally need to be an Australian citizen or permanent resident, buying as an owner-occupier, and a genuine first home buyer. Scheme rules and caps do change, so confirm your eligibility before you start.
Stamp duty for first home buyers in NSW
Through the NSW First Home Buyers Assistance Scheme, eligible first home buyers pay:
- $0 stamp duty on a new or existing home valued up to $800,000.
- A reduced (concessional) rate on homes valued $800,001 to $1,000,000: the discount tapers off as the price rises.
On an $800,000 purchase, that exemption alone saves around $31,000 in stamp duty. Vacant land has its own lower thresholds.
The First Home Owner Grant (NSW)
If you are buying or building a brand-new home, you may also receive the $10,000 First Home Owner Grant. The price limit is $600,000 to buy a new home, or up to $750,000 (land plus build) if you are building. The grant does not apply to established homes.
Can you combine all three?
Yes, and that is where the real value is. A first home buyer purchasing a new property could potentially use the 5% deposit (First Home Guarantee), pay $0 stamp duty, and receive the $10,000 grant, all on the same purchase. The exact mix depends on the property type, price and your eligibility.
Steps to buy your first home in Sydney
- Work out your borrowing power and which schemes you qualify for.
- Get pre-approval so you can make offers with confidence.
- Find a property within the relevant price caps.
- Apply through a participating lender: not every lender offers the First Home Guarantee, and rates differ.
- Settle, claim your grant and exemptions, and move in.
Frequently asked questions
How much deposit do I need to buy a first home in Sydney?
As little as 5% of the purchase price if you use the First Home Guarantee, with no Lenders Mortgage Insurance. Without a scheme, lenders generally prefer 20% to avoid LMI.
Do first home buyers pay stamp duty in NSW?
Not on homes up to $800,000: eligible first home buyers pay $0 under the NSW First Home Buyers Assistance Scheme. Homes from $800,001 to $1,000,000 receive a reduced rate.
Can I use the First Home Guarantee in Sydney?
Yes. Since 1 October 2025 the NSW/Sydney property price cap is $1.5 million, there is no income cap, and places are unlimited, so most eligible Sydney first home buyers can use it.
Can permanent residents get first home buyer help?
Generally yes: permanent residents (not only citizens) can access these schemes, subject to the specific eligibility rules. We can confirm your situation before you apply.
Get your first-home plan in place
Wonderful Global helps first home buyers across Chatswood, the North Shore and greater Sydney work out their deposit, line up the right schemes, and get pre-approved with a participating lender. We give you a clear answer within 24 hours of receiving your documents. Service available in English, Mandarin and Cantonese: call +61 404 838 365 or contact us anytime.
This article is general information only and is not financial, tax or credit advice. It does not take your personal circumstances into account, and government schemes, caps and thresholds can change. Please confirm current eligibility and figures with Revenue NSW and Housing Australia, or speak with us, before acting.