How you could become a homeowner in 2026

For many Australians, homeownership can feel like a moving target. Prices keep edging higher, rents are rising, and saving a 20% deposit can take years. Yet with government support schemes and a smart savings strategy, it may be possible to enter the market sooner than you think, even in the first half of 2026.

Australia’s property market has grown steadily, thanks to more people, limited housing, and strong demand in major cities. While each suburb is different, overall prices are higher than a few years ago, and many experts expect them to keep rising.

This leads to a clear result:

• The longer you wait to buy, the bigger your required deposit could become.
• Saving a traditional 20% deposit for a typical home can easily add up to over $100,000, which often takes years to save.

That’s why low-deposit options, such as the Australian Government’s guarantee schemes, can help first home buyers get into the market sooner.

The scheme, previously known as the Home Guarantee Scheme, allows eligible first-home buyers to purchase a home with a deposit as low as 5%. Eligible single parents or legal guardians may qualify with a 2% deposit, without paying Lenders Mortgage Insurance (LMI).

Under this scheme, the Australian Government guarantees part of the loan, so buyers do not need a full 20% deposit. This reduces the upfront savings required and helps buyers enter the property market sooner.

Note: It is important to check your eligibility for the scheme before applying. You can speak to a mortgage broker for personalised advice.

We have used a simple example to demonstrate how you can combine a dedicated savings plan and the government’s 5% deposit scheme to turn your homeownership dream into reality.

Assume you are looking at properties around $800,000.

At an $800,000 purchase price:

• A traditional 20% deposit would be $160,000.
• A 5% deposit would be $40,000.

The difference is substantial: instead of saving $160,000, you’re targeting $40,000 to access the government guarantee (subject to eligibility).

You may even get some additional help from your state or territory’s First Home Owner Grant (depending on availability and your eligibility)

Now take a typical dual-income household.

ABS data says that as of May 2025, the average full-time worker earns about $2,010 per week. If both partners work full-time and earn about the average, together they make around $4,000 per week before tax, or about $208,000 a year.

After paying tax, super, and essentials like rent, utilities, groceries, and transport, there’s often still room to save a set amount each month.

For example:

• If the couple saves $3,000 to $3,500 each month, they could reach a $40,000 to $45,000 deposit in about 12 to 15 months.
• Any savings you already have, plus bonuses, tax refunds, or extra income, can help you reach your goal even faster.

Being disciplined is key. If you treat your deposit like a must-pay monthly bill instead of just saving what’s left over, you’ll make faster progress.

Using a 5% deposit isn’t “free money”—there are trade-offs. It’s important to understand what you’re signing up for.

• You buy sooner: Instead of waiting multiple extra years to reach 20%, you might buy within 12–18 months.
• You avoid LMI: The government guarantee can save you a large upfront cost that would otherwise be added to your loan.
• You enter the property cycle: If prices continue to rise, being in the market can help you build equity sooner instead of chasing a rising target.

• Higher loan amount: With only a 5% deposit, you are borrowing around 95% of the purchase price.
• Higher repayments: Larger loans mean higher monthly repayments, and small interest rate changes will have a greater impact on your budget.
• Less buffer: A lower deposit means you start with less equity, so you have less cushion against market fluctuations early on.

This is why responsible borrowing and stress-testing your budget are so important.

When you run the numbers on a home loan calculator, it can be tempting to focus on today’s interest rate and “make it fit” your current budget. A more realistic approach is to assume rates will not always stay where they are.

A simple rule of thumb:

• Calculate your approximate repayments at the current interest rate.
• Then recalculate them at 1 percentage point higher (for example, from 6% to 7%).

If your budget still works at that higher rate, while allowing you to keep saving a small emergency buffer and maintain a reasonable lifestyle, you are in a safer position. If the numbers only work at today’s rate and collapse with a modest increase, it may be a sign to:

• Lower your target purchase price.
• Save a slightly higher deposit.
• Wait until other debts (like credit cards or personal loans) are reduced.

Remember: lenders have their own serviceability assessments, but it is crucial to run your own stress tests based on your real-world spending.

If your goal is to become a homeowner in 2026/2027, the next 6–18 months are critical. Consider the following steps:

1. Clarify your price range
2. • Research realistic property prices in your target suburbs.
   • Use current listings and recent sale data as a guide, not just city medians.
2. Set a clear deposit target
3. • Decide whether you are aiming for a 5% deposit under a guarantee scheme or a higher deposit.
   • Translate that into a specific dollar figure (e.g., “We need $40,000 by June 2026”).
3. Build a joint savings plan
4. • Open a dedicated high‑interest savings for your deposit.
   • Automate transfers the day after payday so the money is saved before you see it.
   • Track progress monthly and celebrate milestones to stay motivated.
4. Clean up your financial profile
5. • Pay down high-interest debts where possible.
   • Avoid taking on new consumer credit (e.g., buy now, pay later or new credit cards) in the lead-up to your application.
   • Keep your spending stable to demonstrate good habits.
5. Check your eligibility and get advice
6. • Review the latest criteria and property caps for any government-backed schemes you’re considering.
   • Speak with a mortgage broker or lender to understand your borrowing capacity and any documentation you’ll need.
6. Run repayment scenarios
7. • Use multiple interest rates (current plus at least 1 percentage point higher).
   • Factor in ongoing costs such as strata, council rates, utilities, insurance and maintenance.