How Much Do I Really Need Saved?

If you’ve been watching property prices climb while your savings account feels like it’s standing still, you aren’t alone. Most first-home buyers are surprised when they realize that the traditional “5% deposit” rule is no longer the only way into the market.

Thanks to new Australian Government initiatives, the barrier to entry has shifted. Here is what you actually need to know to get your foot in the door in 2025 and beyond.

1. The 2% Reality: Shared Equity & Support

While most people talk about 5% or 10% deposits, there are now two specific ways to buy with as little as 2% down:

• The Help to Buy Scheme: Launching in late 2025, this is a “shared equity” program. The government contributes up to 30% (for existing homes) or 40% (for new builds) of the purchase price. You only need a 2% deposit and a smaller mortgage, making your monthly repayments much more affordable.
• The Family Home Guarantee: If you are a single parent or guardian, you may already be eligible to bypass Lenders Mortgage Insurance (LMI) and buy a home with just a 2% deposit.

2. New Price Caps: More Choice in Your Suburb

One of the biggest hurdles used to be that government support only applied to “cheap” houses that were hard to find. As of October 1, 2025, the government significantly increased the property price caps to reflect real-world market values.

State / Territory	Capital City & Regional Centres	Rest of State
NSW	$1,100,000	$900,000
VIC	$950,000	$750,000
QLD	$850,000	$700,000
WA	$750,000	$600,000
SA	$750,000	$600,000
TAS	$650,000	$600,000
ACT / NT	$800,000 (Whole Territory)	–

Good news: these updated caps mean you can now look at family-sized homes in suburbs that were previously “off-limits” for these schemes.

3. The FHSS Strategy: Saving Smarter, Not Harder

If you’re still in the saving phase, the First Home Super Saver (FHSS) Scheme is a powerful tool. It allows you to save for your home inside your superannuation environment, where it is taxed at a lower rate (usually 15%).

• The Benefit: You can save up to $50,000 this way. Because you’re paying less tax on that money compared to a standard bank account, your deposit grows faster.

4. No More “LMI” Tax

The “5% Deposit Scheme” (formerly the Home Guarantee Scheme) is still a heavy hitter. Usually, if you have less than 20%, banks charge you a fee called Lenders Mortgage Insurance, which can cost upwards of $15,000. As you may be aware, under this government scheme, the government “guarantees” your loan, so you pay $0 in LMI. That is thousands of dollars you can keep for your furniture or moving costs.

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The Bottom Line

Buying your first home isn’t just about how much you can save; it’s about which tools you use to get there. With 2% deposit options and higher price caps now in play, that “5-minute read” could be the difference between buying this year or waiting another five.