Do you know what first home buyers really need?

Getting the full picture on deposit size and LMI

You need to understand how much deposit you need and whether LMI applies. Under the Australian Government 5% Deposit Scheme, eligible first home buyers can purchase with a 5% deposit and no LMI. Housing Australia guarantees the difference between your deposit and 20% of the property value. South Australian buyers can access this scheme on homes valued up to $900,000 in Adelaide and regional centres, or up to $500,000 in other areas. The scheme is available through participating lenders, so the loan structure, rate type and account features depend on your chosen lender.

If you do not qualify for the scheme or prefer a different lender, a 10% or 20% deposit typically applies. LMI is usually charged when your deposit falls below 20% of the purchase price. Some lenders offer LMI waivers for public servants on deposits as low as 10%, which can save several thousand dollars in upfront costs. Your broker can check whether your SA public sector employer is eligible with specific lenders.

Consider a buyer with a 10% deposit who is comparing a lender with an LMI waiver against one without. On a property valued within South Australia's concession thresholds, avoiding LMI removes a cost that would otherwise sit between $5,000 and $15,000 depending on the purchase price and deposit percentage. That amount can be redirected to furnishings, moving costs or kept in reserve.

How stamp duty concessions work in South Australia

Stamp duty relief is available to first home buyers purchasing a new home or vacant land in South Australia. No property value cap applies to contracts entered into from 6 June 2024. The concession does not apply to established homes. If you are buying an existing house or unit, you will pay standard transfer duty.

For contracts entered into from 13 February 2025, you are ineligible if you or your spouse or domestic partner own or have previously owned a residential property in Australia. You must live in the home as your principal place of residence for at least six continuous months within 12 months of settlement.

SA public sector employees purchasing in regional areas such as Mount Gambier, Whyalla or Port Augusta should confirm that the property is classified as a new home under RevenueSA's definition. A new home includes a home that has not been previously occupied or sold as a place of residence. If you are buying land to build on, the concession applies to the land purchase, and you can also access the FHOG once the build is complete.

Understanding the First Home Owner Grant in South Australia

The FHOG in South Australia is $15,000 and applies to new homes only. No property price cap applies to contracts entered into from 6 June 2024. You cannot use the grant for an established home. At least one applicant must be an Australian citizen or permanent resident. The same residency requirement applies: you must live in the property as your principal place of residence for at least six continuous months within 12 months of settlement.

The grant and stamp duty relief can be used together, and both can generally be used alongside the Australian Government 5% Deposit Scheme. You apply for the FHOG and stamp duty concession through RevenueSA at or before settlement. Your conveyancer or solicitor can lodge the application on your behalf.

Working out your genuine savings requirement

Most lenders require you to hold genuine savings for at least three months before your home loan application. Genuine savings include funds in savings accounts, term deposits, shares or managed funds. First home super saver scheme withdrawals and funds from the sale of assets such as vehicles are typically accepted. Gift deposits from immediate family members are also accepted by most lenders, though some will still require a portion of the deposit to be held as genuine savings.

In our experience, SA public sector employees with steady income and clear savings history generally meet this requirement without difficulty. The three-month period starts from the date the funds are deposited into an account in your name, not from the date you opened the account. If you are receiving family assistance, confirm with your broker how the lender treats that contribution and whether any additional documentation is required.

Preparing your application documents

Your home loan application requires proof of identity, income, assets, liabilities and savings. For SA public sector employees, income verification usually involves recent payslips and a letter of employment or contract. Lenders assess your net income after tax, superannuation and any salary sacrifice arrangements. If you salary package a vehicle or other benefits, your broker should explain how the lender treats that income for borrowing capacity purposes.

You will also need to provide statements for all bank accounts, credit cards and any other liabilities such as personal loans, car loans or buy now pay later accounts. Lenders assess your living expenses based on your actual spending and a benchmark minimum, whichever is higher. Reducing discretionary spending in the months before you apply does not typically increase your borrowing capacity under the benchmark, but clearing small debts and closing unused credit accounts can.

SA public sector employees in Adelaide, particularly those working in the CBD or at Lot Fourteen, often have predictable commuting patterns and may be weighing established homes in suburbs with direct transport links against new builds further out. Your loan structure should reflect the property type you are targeting. If you are looking at new homes to access the stamp duty concession and FHOG, confirm with your broker that your deposit and borrowing capacity align with the price range for new stock in your preferred area.

Choosing between fixed, variable and split loan structures

Fixed rates lock in your repayment amount for a set period, typically one to five years. Variable rates can move up or down. Many first home buyers choose a split structure, fixing part of the loan and leaving part variable. The benefit of a split is that you can access an offset account or redraw on the variable portion while holding a fixed rate on the other portion. Offset accounts reduce the interest charged by offsetting your savings balance against your loan balance. Redraw allows you to withdraw extra repayments you have made, though some lenders charge fees or impose conditions on redraw access.

Rate type and loan features should match how you plan to manage the loan. If you expect to receive bonuses, overtime or other irregular income, having access to an offset account or redraw on at least part of the loan gives you flexibility to park those funds and reduce interest. If rate stability is more important than flexibility, a higher fixed portion or fully fixed loan may suit. Your broker can model different splits and show you the impact on repayments and features available.

Getting pre-approval before you start looking

Pre-approval gives you a conditional commitment from a lender based on your financial position and the information you provide. It does not guarantee final approval, which depends on the property valuation, final income verification and any change in your circumstances. Pre-approval is usually valid for three to six months depending on the lender.

SA public sector employees often have stable employment, which lenders view positively. Pre-approval allows you to move quickly when you find a property and gives you a clear budget. It also identifies any issues with your application early, such as undisclosed debts, insufficient genuine savings or credit file marks. If you are planning to purchase within the next few months, apply for pre-approval as soon as your deposit and documentation are ready. If your circumstances change after pre-approval, such as a change in employment, new debt or large withdrawals from savings, notify your broker immediately.

Linking your loan to your public sector employment benefits

Some lenders offer interest rate discounts or fee waivers for public sector employees. The discount can range from 0.10% to 0.30% depending on the lender and your employer. Rate discounts reduce your ongoing repayments and the total interest paid over the life of the loan. Your broker should confirm which lenders recognise your SA public sector employer and what benefit applies. Not all lenders offer the same level of discount, and the benefit may apply only to specific loan products within the lender's range.

Fee waivers can include application fees, annual fees or valuation fees. These waivers are less common than rate discounts but can still save several hundred dollars at the start of the loan. When comparing home loan options, ask your broker to include any applicable public sector benefits in the comparison so you can see the full cost difference between lenders.

Call one of our team or book an appointment at a time that works for you.

Frequently Asked Questions