A home loan in Sydney usually comes down to a few things. The loan structure you choose. The deposit and income requirements you meet. And whether a government scheme, like the First Home Guarantee or Help to Buy, can lower the deposit you need. This guide walks through each part, in plain terms.
Whether you’re buying your first home, refinancing, or helping a family member get started, the sections below cover what actually matters. That includes government schemes, the loan process itself, the loan structures on offer, and how your own situation might change what fits. Each section links out to a full guide on that topic.
Key points
- The First Home Guarantee needs just a 5% deposit and, since October 2025, has no income caps, with a $1.5 million price cap in Sydney.
- Help to Buy needs only a 2% deposit, but it’s income-tested, and the government keeps a share of any future gain.
- NSW first home buyers pay no stamp duty on homes up to $800,000, on top of whichever scheme they use.
- A mortgage broker is legally bound by the Best Interests Duty to recommend what suits you, not whichever loan pays the highest commission.
- The loan structure you choose, fixed or variable, LVR, offset or redraw, affects what you pay for years after settlement, not just at the start.
- Self-employed buyers, couples, and anyone refinancing each face different requirements worth planning for early.
What government schemes help first home buyers in Sydney?
Three main options exist for Sydney first home buyers right now. The First Home Guarantee. The Help to Buy shared equity scheme. And NSW’s stamp duty concessions. Each works differently, and some can be combined.
What is the First Home Guarantee, and who can use it?
The First Home Guarantee [link pending] lets eligible buyers purchase with a 5% deposit and skip lenders mortgage insurance. Since October 2025, Housing Australia removed the income caps and place limits. The price cap for Sydney and NSW regional centres now sits at $1.5 million.
You apply through a participating lender, not directly through Housing Australia. The guarantee doesn’t stack with Help to Buy.
How does the Help to Buy shared equity scheme work?
Help to Buy [link pending] lets the government co-purchase your home. It contributes up to 40% for a new build, or 30% for an existing home, so you need only a 2% deposit. It’s income-tested at $100,000 for a single applicant, or $160,000 for couples. The Sydney price cap is $1.3 million.
Only two lenders currently offer it, Commonwealth Bank and Bank Australia. Places are capped at 10,000 a year.
| First Home Guarantee | Help to Buy | |
| Minimum deposit | 5% | 2% |
| Income cap | None | $100k single / $160k joint |
| Sydney price cap | $1.5 million | $1.3 million |
| Government’s role | Guarantees your loan | Co-owns part of your home |
| LMI | Not required | Not required |
How much stamp duty do first home buyers actually pay in NSW?
Under the First Home Buyers Assistance Scheme, eligible buyers pay no stamp duty on homes up to $800,000. A reduced rate applies on a sliding scale up to $1 million. Vacant land is exempt up to $450,000.
This concession can be used alongside the First Home Guarantee, since it’s a state scheme, not a federal one.
What is a family guarantor loan, and how is it different from these schemes?
A guarantor loan uses a family member’s property as extra security. It lets you borrow with a smaller deposit, and often avoid lenders mortgage insurance too. Unlike the schemes above, this depends entirely on a private arrangement with your guarantor, not on government eligibility rules.
What does a mortgage broker actually do, and how does the loan process work?
Once you know whether a scheme applies to you, the next question is how the loan process itself works, and who’s involved.
What does a mortgage broker actually do for you?
A mortgage broker compares loans across multiple lenders and handles the application for you. Brokers are also legally required to act in your best interests, not the lender’s. That requirement is called the Best Interests Duty [link pending]. It means the broker has to recommend what actually suits your situation, not whichever loan pays the highest commission.
At Lendwise, that means one broker, Raj, working through your home loan options directly, rather than passing you between departments.
What documents do you need for a home loan application?
Lenders generally want proof of identity, recent payslips or tax returns, and bank statements showing your savings history. They’ll also want details of any existing debts. Self-employed applicants usually need more, like two years of tax returns and financial statements.
What’s the difference between pre-approval and conditional approval?
Pre-approval is a lender’s early estimate of what they’d likely lend you. It’s based on limited checks, and it’s useful while you’re still house hunting. Conditional approval comes later, once you’ve found a specific property. It involves a fuller look at both your finances and that property.
How long does a home loan application actually take in NSW?
A straightforward application can move from pre-approval to formal approval in one to two weeks. Self-employed applications, or properties needing extra valuation checks, often take longer. Settlement itself, once your offer is accepted, usually takes another four to six weeks.
How do you choose the right loan structure?
Once you’re through the process itself, the loan structure you choose affects what you pay for years afterward.
Should you choose a fixed or variable rate?
A fixed rate locks in your repayments for a set period. That gives certainty, but less flexibility. A variable rate moves with the lender’s own rate settings. It can work in your favour or against you, and it usually comes with more flexible features, like extra repayments.
What’s the difference between interest-only and principal and interest?
Principal and interest repayments pay down both the loan balance and the interest charged. You’re building equity from day one. Interest-only repayments cover just the interest, for a set period. That lowers repayments short term, but the balance doesn’t reduce until the period ends.
What is LVR, and why does it change what you pay?
LVR compares your loan amount to the property’s value. A higher LVR means a smaller deposit relative to the price. That usually means a higher interest rate, and it can trigger lenders mortgage insurance. A lower LVR often unlocks better rates and more lender options.
Offset account or redraw facility, which one actually saves you more?
An offset account holds your savings separately. It reduces the interest charged on your loan, without touching the loan balance itself. A redraw facility lets you pull back extra repayments you’ve already made. It works in a similar way, but it’s usually less flexible, and less tax-effective for some borrowers.
What if your situation isn’t straightforward?
Not every borrower fits the standard profile. A few common situations change what to plan for.
How do self-employed borrowers get a home loan in Sydney?
Self-employed borrowers can get approved. Lenders usually want two years of tax returns and financial statements, rather than payslips. Some lenders also assess self-employed income differently than others. A broker who knows which lenders are more flexible here can make a real difference.
What should couples buying together know before applying?
When you apply jointly, the lender looks at both incomes and both sets of debts and expenses. That can increase your borrowing power. It also means both applicants are equally responsible for the full loan. It’s worth discussing ownership structure with a solicitor too, not just the loan itself.
When is refinancing actually worth it?
Refinancing can make sense in a few situations. Your current loan no longer fits. Your property’s value has changed your LVR. Or your fixed term is ending. Weigh any exit costs or new establishment fees against what you’d actually save before switching.
How is a construction loan different from a standard home loan?
A construction loan releases funds in stages as building progresses, rather than as one lump sum at settlement. You typically pay interest only on the amount drawn down so far. Lenders also assess the builder’s contract and progress payment schedule as part of approval.
How does the wider market affect your home loan?
Two more things shape your home loan beyond your own situation. The broader interest rate environment. And who you choose to arrange your loan through.
How does the RBA cash rate affect your home loan?
The Reserve Bank of Australia sets the cash rate. This influences the interest rates lenders offer on home loans, though it doesn’t set them directly. When lenders adjust their own rates, it flows through to variable repayments first, and to new fixed rates over time. Check the RBA’s own site for the current rate, since it moves.
Should you use a mortgage broker or go directly to a bank?
A bank can only offer you its own loans. A broker compares options across a panel of lenders, and is bound by Best Interests Duty to recommend what suits you. Going direct can feel more straightforward if you already know exactly which lender you want. But you lose that comparison.
Frequently asked questions
How much deposit do I actually need for a home loan in Sydney?
It depends on the path you take. With the First Home Guarantee, 5% is enough. With Help to Buy, it’s as little as 2%. Without a scheme, most lenders prefer 20% to avoid lenders mortgage insurance. Smaller deposits are still possible without one too.
Can I use the First Home Guarantee and Help to Buy together?
No. They’re two separate paths to a smaller deposit. You choose one or the other, based on your income and situation.
Do I need a mortgage broker, or can I just go to my bank?
Neither is required. A broker compares loans across multiple lenders rather than just one. Brokers are also legally bound by Best Interests Duty to recommend what suits you.
How much does it cost to use a mortgage broker in Sydney?
Brokers are usually paid by the lender, not the borrower. There’s typically no direct cost to you.
What’s the first step if I’m not sure where to start?
A conversation about your situation, income, and goals, before you start looking at properties. It usually saves the most time later.
Conclusion
If one of the sections above raised more questions than it answered, that’s normal. Home loans have a lot of moving parts. The right combination depends on your income, your deposit, and what you’re actually trying to buy. The most useful next step is usually a direct conversation about your specific numbers, not more reading.
Lendwise is a Sydney mortgage broker working across all six loan types, from home loans through to business and equipment finance, always under the Best Interests Duty. You can read more on our home loan page, book a free 30-minute consultation with Raj, or get in touch directly. He’s also reachable on 0433 983 334.