First Home Buyer Statistics and What They Mean for You

Around 30% of all home loan approvals in Australia go to first home buyers. That proportion has stayed remarkably steady, even as house prices, interest rates, and government policies have shifted.

If you're weighing up whether now is the right time to buy, the numbers paint a clearer picture than headlines alone. The statistics on deposit sizes, loan structures, and government scheme uptake show where buyers are finding traction and where the common assumptions fall short.

How Much Are First Home Buyers Actually Borrowing?

Most first home buyers across Victoria borrow between 85% and 95% of the property value. A smaller deposit does not necessarily mean a stretched budget. Since October 2025, the First Home Guarantee removed all income caps and place limits, which means eligible buyers can purchase with a 5% deposit without paying Lenders Mortgage Insurance. This has shifted the borrowing profile significantly.

Consider a buyer in Cheltenham purchasing at the suburb's current median. With a 5% deposit under the First Home Guarantee, they avoid LMI entirely while keeping more of their savings intact for furniture, renovations, or simply a buffer after settlement. That same buyer two years ago would have paid several thousand dollars in insurance or needed to save a 10% or 20% deposit to avoid it.

The shift has been pronounced in Bayside. We regularly see buyers who would have waited another 12 to 18 months to save a larger deposit now entering the market earlier, particularly in suburbs like Highett and Moorabbin where unit stock offers more accessible entry points.

What Proportion of First Home Buyers Use Government Schemes?

Roughly half of all first home buyers nationally now use either the First Home Guarantee or a state-level shared equity scheme. In Victoria, the uptake is slightly lower because the state's stamp duty concessions and grants are more accessible for buyers with a 10% deposit who may not need to lean on the federal guarantee.

Victoria offers full stamp duty exemption on properties up to $600,000, tapering to a concession up to $750,000. The $10,000 First Home Owner Grant applies to new homes valued under $750,000. These concessions stack with the First Home Guarantee, so a buyer purchasing a new townhouse in Brighton East or Mentone can combine the federal deposit waiver with the state grant and stamp duty relief.

Are Fixed or Variable Rates More Common Among First Home Buyers?

First home buyers split fairly evenly between fixed and variable rates, though the proportion shifts depending on where rates sit at the time of settlement. When fixed rates were below 2%, the majority locked in. As variable rates became more competitive and fixed rates climbed, the balance tipped back.

What matters more than the rate type is the loan structure. An offset account paired with a variable rate gives you flexibility to park savings and reduce interest without committing those funds permanently. A split loan, part fixed and part variable, offers rate certainty on a portion of the debt while keeping some flexibility for extra repayments.

A buyer purchasing a two-bedroom unit in Beaumaris might fix 60% of the loan to lock in repayments on the bulk of the debt, leaving 40% variable with an offset. If they receive a bonus or tax return, those funds sit in the offset and reduce interest on the variable portion immediately. They are not locked into a fixed structure that penalises early repayment.

How Many First Home Buyers Get Pre-Approval Before They Start Looking?

About 70% of first home buyers now secure conditional approval before attending auctions or making offers. That figure has climbed as competition for well-located stock intensified, particularly in suburbs closer to the bay and public transport.

Pre-approval clarifies your borrowing capacity and signals to selling agents that you can settle quickly. In a suburb like Hampton, where stock turnover is high and buyer interest strong, a conditional approval often makes the difference between your offer being considered seriously or passed over for another buyer ready to exchange.

The process takes one to three business days once documents are submitted. Lenders assess your income, expenses, existing debts, and deposit source. The approval is conditional until a property valuation is completed, but it gives you a clear ceiling and removes the uncertainty that stalls decision-making at auction or during private treaty negotiations.

What Does the Data Say About Deposit Sources?

The majority of first home buyers fund their deposit through personal savings, though around 20% receive some form of family assistance. A gifted deposit is acceptable to most lenders as long as it comes with a signed declaration confirming the funds are a gift, not a loan.

The First Home Super Saver Scheme is underutilised despite offering a clear tax advantage. You can contribute up to $15,000 per year into superannuation specifically for a first home deposit, taxed at 15% rather than your marginal rate. Over three or four years, that adds up to a meaningful amount, particularly for buyers earning above the tax-free threshold who would otherwise be taxed at 32% or higher.

As an example, two buyers contributing $15,000 each annually for three years could withdraw up to $90,000 combined, plus deemed earnings, for their deposit. That saving happens inside super and compounds faster than it would in a standard savings account after tax. It requires planning ahead, but the structure is there.

What Are the Most Common Mistakes First Home Buyers Make?

The most common misstep is underestimating settlement costs. Stamp duty, conveyancing, building and pest inspections, and lender fees add up quickly. Even with a stamp duty exemption, you still need to budget for the other costs, which typically sit between $8,000 and $15,000 depending on property price and location.

Another frequent issue is locking into a loan structure without understanding ongoing features. A home loan with a redraw facility might seem similar to one with an offset account, but redraw access can be restricted by the lender, and withdrawn funds may affect your tax position if you later convert the property to an investment. An offset account keeps your savings separate and accessible, with no tax complexity if your circumstances change.

Finally, some buyers focus heavily on the interest rate and ignore the comparison rate, which includes most ongoing fees. A loan advertising a low headline rate but charging a $395 annual package fee and higher application costs can end up costing more over the life of the loan than a slightly higher rate with lower fees. The comparison rate is the clearer number to assess.

How Do First Home Buyers in Bayside Compare to the National Picture?

Bayside buyers tend to enter the market slightly later and with marginally higher deposits compared to outer suburbs. The median age of a first home buyer in the area sits around 32, compared to 28 or 29 in growth corridors further out. That reflects the price point, the type of stock available, and the demographic mix across suburbs like Sandringham, Black Rock, and Parkdale.

Bayside buyers are also more likely to use a mortgage broker. The loan structures required to make a purchase work in this area, particularly where buyers are balancing deposit size, LMI, and government schemes, benefit from tailored advice rather than a direct lender approach. A broker can compare how different lenders assess your income, which can shift your borrowing capacity by tens of thousands of dollars depending on how they treat bonuses, overtime, or rental income.

Call one of our team or book an appointment at a time that works for you. We will walk through your situation, clarify what you can borrow, and structure a loan that fits how you actually live and earn.

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