Saving for your first home after separation feels like starting over, but you might be closer than you think.
Your deposit needs depend on which scheme you use and where you're buying. The Australian Government 5% Deposit Scheme lets eligible buyers purchase with just 5% down and no lenders mortgage insurance. If you're buying an established home in Melbourne under the scheme, you'd need 5% of the purchase price up to the $950,000 property cap. In Sydney, that cap sits at $1,500,000. Brisbane comes in at $1,000,000. The scheme has no income limits and no annual place caps, so if you meet the first home buyer eligibility criteria, your application goes through one of 31 participating lenders.
Some lenders still offer 5% deposit loans outside the scheme, but you'll pay lenders mortgage insurance. That premium gets added to your loan and can run into thousands depending on your purchase price and deposit size. The 5% Deposit Scheme removes that cost entirely.
How much you actually need in your account
Your deposit is one piece. Settlement costs are the other.
Legal fees, building and pest inspections, and conveyancing fees sit outside your deposit. Lenders also want to see genuine savings, which usually means funds held in your account for at least three months. If you're receiving a financial settlement from your separation, the way that money is documented matters. Some lenders treat settlement proceeds as genuine savings once the funds have been in your account for 90 days. Others accept a statutory declaration confirming the source. Talk to your broker before you assume settlement funds won't count.
Consider someone buying in regional Victoria under the 5% Deposit Scheme. They've found a home at the current median and have saved the deposit. On top of that 5%, they'll need funds for conveyancing, inspections, and any upfront lender fees. Those costs sit between $8,000 and $12,000 depending on the property and the solicitor. If they're also accessing Victoria's stamp duty exemption on properties up to $600,000, they've just saved several thousand more. In their situation, the total cash required to settle might be closer to 6% or 7% of the purchase price rather than 5% alone.
Ready to get started?
Book a chat with a Finance and Mortgage Brokers at Divorce Home Loans today.
Stamp duty concessions you might not know about
Every state and territory runs its own concessions, and they've changed considerably in the past year.
In New South Wales, you'll pay no transfer duty on properties up to $800,000. A sliding concession applies between $800,000 and $1,000,000. Victoria offers full exemption up to $600,000 and a sliding scale to $750,000. Queensland provides nil duty on established homes up to $700,000 with a concession to $800,000, and from 1 May 2025, a full concession on new builds with no price cap. South Australia mirrors that structure. Western Australia updated its concessions in March, extending relief to $700,000 in Perth and Peel and $750,000 in regional areas. The ACT went further. From 1 July 2026, all eligible buyers are fully exempt from conveyance duty regardless of property value or household income.
Those concessions stack with the deposit scheme. You can use both. You cannot combine the 5% Deposit Scheme with Help to Buy, but Help to Buy works alongside most state grants and duty concessions depending on where you're purchasing.
When a grant applies and when it doesn't
First home owner grants are not universal.
Most states limit the grant to new builds or substantially renovated homes. New South Wales pays $10,000 for new homes up to $600,000 or land and build packages up to $750,000. Victoria offers $10,000 for new homes valued under $750,000. Queensland reduced its grant to $15,000 for contracts signed from 1 July 2026. It was $30,000 for eligible contracts signed before that date. South Australia pays $15,000 with no price cap on new homes from June last year. Western Australia provides $10,000 for new homes under $750,000 south of the 26th parallel and $1,000,000 to the north. Tasmania lifted its grant to $20,000 for new builds from 1 July 2026, subject to assent. The Northern Territory offers a $50,000 HomeGrown Territory Grant for new homes on contracts signed by 30 September 2027.
If you're buying an established home, no grant applies in most jurisdictions. The stamp duty concession still does.
What happens if your deposit comes from family
Gift deposits are accepted by most lenders as long as the donor signs a statutory declaration confirming the money is a genuine gift with no repayment obligation.
The declaration usually states the relationship between you and the donor, the amount gifted, and that no loan agreement exists. Lenders still want to see some of your own genuine savings. A 5% deposit made entirely from a gift with no savings history raises questions about your ability to manage loan repayments. In our experience, lenders prefer at least half the deposit to come from your own verified savings, with the remainder from family if needed.
If the donor wants security over the property or expects repayment, that arrangement becomes a second mortgage or loan, and it changes your borrowing capacity. Disclose it upfront. Lenders will find out during the application, and undisclosed debts can sink your approval.
Using pre-approval to set your budget
Pre-approval tells you what you can borrow before you start looking.
It's not a guarantee, but it gives you a borrowing limit based on your income, expenses, and credit history. Most pre-approvals last between 90 and 120 days depending on the lender. If your income changes during that window or you take on new debt, the approval may need to be reassessed. If you're self-employed or working casual hours post-separation, some lenders need longer income history than others. Knowing that before you make an offer avoids disappointment.
Pre-approval also shows sellers you're serious. In a tight market, that can make the difference between your offer being accepted and being passed over for another buyer who's already been assessed.
Offset accounts and why they matter after separation
An offset account links to your home loan and reduces the interest you pay.
Every dollar in the offset reduces the balance on which interest is calculated. If you have a $400,000 loan and $15,000 sitting in your offset, you only pay interest on $385,000. You still have access to that $15,000 whenever you need it. For someone rebuilding finances after separation, that flexibility matters. You're not locking funds into the loan via extra repayments that might be harder to access later.
Not all loan products include an offset. Some lenders charge a higher interest rate for loans with offset facilities. Others include it without a rate loading. Compare the ongoing cost against the interest saving. If you're not likely to keep a meaningful balance in the offset, a loan without one and a lower rate might cost you less over time.
Fixed versus variable and what suits your situation
Fixed rates lock in your repayment amount for a set period, usually between one and five years.
Variable rates move with the market. At current variable rates, your repayment can increase or decrease depending on what the Reserve Bank does. If you need certainty while you're rebuilding income or managing other debts post-separation, a fixed rate gives you that. The downside is less flexibility. Most fixed loans limit extra repayments to around $10,000 or $20,000 per year without penalty. If you're expecting a lump sum from your settlement and want to pay down the loan quickly, a variable loan or a split structure might suit you more.
Splitting your loan between fixed and variable gives you some certainty and some flexibility. You can fix part of the balance to protect against rate rises and leave the rest variable so you can make extra repayments without restriction. We regularly see buyers post-separation choose a 50-50 split or fix two-thirds and leave one-third variable depending on their cash flow and settlement timing.
Call one of our team or book an appointment at a time that works for you. We'll walk through your deposit, your eligibility, and which home loan options line up with where you are right now.
Frequently Asked Questions
How much deposit do I need to buy my first home after separation?
The Australian Government 5% Deposit Scheme lets eligible first home buyers purchase with just 5% down and no lenders mortgage insurance. You'll also need funds for settlement costs like conveyancing and inspections, which typically add another $8,000 to $12,000 depending on the property.
Can I use money from my separation settlement as a deposit?
Yes. Most lenders treat settlement proceeds as genuine savings once the funds have been in your account for 90 days. Some accept a statutory declaration confirming the source without requiring the full 90-day waiting period.
Do first home buyer grants apply to established homes?
No, in most states. First home owner grants are generally limited to new builds or substantially renovated homes. However, stamp duty concessions for first home buyers do apply to established homes in every state and territory.
Can I combine the 5% Deposit Scheme with state stamp duty concessions?
Yes. The Australian Government 5% Deposit Scheme can be used alongside applicable state and territory stamp duty concessions. You cannot combine it with Help to Buy, but you can use either program with most state concessions depending on your location.
What's the benefit of an offset account after separation?
An offset account reduces the loan balance on which interest is calculated while keeping your funds accessible. For someone rebuilding finances post-separation, this flexibility lets you save on interest without locking money into the loan through extra repayments that might be harder to access later.
