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Buying your first property with family or friends

Saving a deposit for your first home can be tough, which is why some Australians team up with a sibling or friend to buy a home together. Co-buying allows you to pool resources, enter the market faster, and leverage government incentives like the First Home Guarantee (FHBG). 

Buying-your-first-home

How the first home guarantee works for joint buyers

The First Home Guarantee allows eligible buyers to purchase their first home with a 5% deposit without paying lenders mortgage insurance (LMI). Unlike traditional couple-only programs, the scheme allows joint applications between two people who are not in a relationship, including friends, siblings, and other family members.

You can apply with a partner, sibling or friend, as long as both applicants meet the eligibility criteria. To qualify, you must:

  • be Australian citizens or permanent residents aged 18 or older.
  • be first-home buyers (or not have owned property in Australia in the past 10 years).
  • intend to live in the property as owner-occupiers.
  • apply for an eligible loan with principal-and-interest repayments through a participating lender.

Eligibility rules for joint applicants can be strict. Unsure if you both qualify for the 5% deposit scheme?

Chat with a Loan Market Broker

Benefits of buying a property together

Pooling your resources with someone else can help you:

  • Enter the market sooner by sharing the deposit and borrowing costs.
  • Potentially expand your borrowing power with two incomes.
  • Access better locations or larger properties than you could afford alone.
  • Share ongoing expenses such as council rates and maintenance.

However, it’s essential to plan carefully. You’ll both be on the loan, which means sharing full responsibility for repayments. It is a good idea to come to a formal agreement setting out each person’s share, responsibilities and what happens if one wants to sell or move to help prevent future problems.

Check out this first home buyer guide for more tips on deposit strategies and loan options for buying your first property.

FIRST HOME BUYER GUIDE

FAQS

Buying a home with family or friends.

Can I buy a first home with a sibling or friend?

Yes. Teaming up with a sibling or friend means you can share the deposit and borrowing costs to enter the property market sooner. Joint buyers can also combine their buying power with government initiatives such as the First Home Guarantee Scheme.

Do both applicants need to be first-home buyers?

Yes. Under the First Home Guarantee, both applicants on the joint application must meet all eligibility rules, including being first-home buyers or not having owned property in Australia in the last 10 years.

Can we use the First Home Guarantee to buy an investment property?

No. The scheme requires all buyers to move into the home as owner-occupiers. However, you can charge board or rent out a spare room while you live in the property.

What happens if my co-buyer stops paying their share of the mortgage?

Because joint home loans carry joint and several liability, the lender holds both parties responsible for full repayments. If one person defaults, the other must cover the full monthly payment. Having a legally binding agreement helps protect both parties.