How to Buy Your First Home as a Millennial in 2025

Let’s be real: you don’t need another article telling you that the property market is tough. You live it every day.

For many in the millennial age group, buying your first property feels less like a milestone and more like an impossible dream. Not because you’re irresponsible or bad with money, but because the system — and the real estate market — has shifted. The financial burdens are real.

Here’s what’s changed — and how you can still find your path to owning a home.

Why It’s So Hard for Millennials to Get on the Property Ladder

Escalating Property Prices vs Wage Growth

Property prices have skyrocketed, while wages have barely kept pace. Data shows that in previous generations, homes were often 3–4x the average income. Today, in many cities, it’s closer to 10x. That’s a big shift in affordability.

Rising Living Costs and Financial Pressures

The financial situation of many home buyers is stretched. Between renting, groceries, student loans, insurance, and inflation, saving for a deposit has become a massive challenge.

Non-Traditional Work Makes It Harder to Borrow

Many millennials freelance, consult, or run side hustles. But lenders still favour PAYG income. If you don’t have “stable” employment, you may find your home loan options limited — or have to jump through more hoops.

How Much Do You Need to Buy Your First Home?

The number everyone wants to know — but it’s more than just the deposit.

Typical Deposit Requirements

Most lenders want 10–20% of the purchase price.

For example, say you're looking to purchase a home for $700,000, you would need to save a deposit of between $70,000–$140,000. A 20% deposit avoids Lenders Mortgage Insurance (LMI), which can cost thousands. More on LMI below.

Stamp Duty and Other Hidden Costs

Stamp duty alone can be a major financial burden, often adding tens of thousands to the upfront cost — especially outside stamp duty concessions.

You will also need to budget for:

• Legal fees
• Pest & building reports
• Loan setup costs
• Utility connection and moving costs

What is Lenders Mortgage Insurance (LMI)?

If you’re borrowing over 80%, lenders charge LMI — which is an insurance that protects them, not you. This insurance can be bundled into your mortgage, but it increases your loan size and repayments.

Government Schemes That Can Help You

First Home Guarantee

The First Home Guarantee was designed to help you to buy your first home with just a 5% deposit — no LMI required. The government guarantees the remaining 15%.

The First Home Guarantee is available to eligible first home buyers, however, price and income caps apply and there are only limited spots each year.

First Home Owner Grant (FHOG)

The First Home Owner Grant is a one-off grant (up to $20,000 in some states) to help with your first home. The FHOG is usually for new builds or off-the-plan purchases.

Stamp Duty Concessions

States like NSW offer discounts or full exemptions for first property purchases under certain price thresholds. This can save you tens of thousands, however, Stamp Duty Concessions will only be applicable to properties under a certain value threshold.

First Home Super Saver Scheme (FHSSS)

The First Home Super Saver Scheme is designed to help first home buyers save for a deposit more effectively by using the tax advantages of their superannuation account.

Under the scheme, you can make voluntary contributions of up to $15,000 per financial year, and up to $50,000 in total, which can later be withdrawn and used toward your first home purchase.

Because super contributions are generally taxed at a lower rate than your regular income, this approach allows you to build savings faster and more tax-effectively.

To access the funds, you’ll need to apply through the ATO, and there are specific eligibility and timing rules to follow — so it’s worth getting guidance from your mortgage broker or financial adviser.

For many home buyers, this is a strategic way to boost their deposit and improve their chances of securing a home loan — especially if traditional savings aren’t cutting it.

Boosting Your Borrowing Power

Getting the most out of your financial situation means more than saving — it’s about how you present your finances to the bank.

Why Your Taxable Income Matters

Your borrowing power is based on what’s on your tax return — not how much you actually earn. If your accountant claims lots of deductions to reduce your tax, your home loan capacity may shrink.

A good accountant can help you strike the right balance to boost your mortgage eligibility. Reach out to Causbrooks today for a complimentary consultation to discuss your situation.

Clean Up Your Finances

Lenders don’t just look at income — they assess liabilities too.

To improve your odds you can:

• Reduce credit card limits
• Pay off personal or car loans
• Eliminate Buy Now Pay Later services
• Show 3–6 months of stable spending

Work With a Mortgage Broker

A mortgage broker helps you navigate the system — especially if you’re self-employed or have a complex financial situation. If you're self-employed and are looking at your borrowing capacity read our article Why It’s So Hard to Get a Home Loan When You Work for Yourself (And What You Can Do About It) here.

A good mortgage broker can:

• Match you to lender policies
• Access schemes like the First Home Guarantee
• Help you secure better mortgage rates
• Suggest strategies to improve your position over the long run

Should You Consider Rentvesting or Investing Instead?

If you can’t afford the family home you want right now, you might want to consider:

• Rentvesting: rent where you want, buy where you can afford
• Looking for an investment property in a more affordable area with strong rental returns
• Buying with a partner or sibling (with a legal agreement in place)

These options can still help you start building wealth through property investment — even if it’s not your “forever home.” If you're after financial advice about the best way to invest your money we recommend you reach out to a financial planner.