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Do First-Home Buyers Need a Mortgage Broker?

First-home buyers aren't required to use a mortgage broker; you can apply directly to a lender. But the first time, with a small deposit and schemes to navigate, a good one is often worth it.

By Eleanor Hayes · · 7 min read

mortgage broker for first home buyersfirst home buyer mortgage brokerdo first home buyers need a mortgage brokerfirst home guarantee mortgage broker5% deposit schememortgage broker australia

First-home buyers · 2026

Optional, but…

you can apply to a lender directly

but a broker often helps more the first time

the 5% deposit scheme runs through participating lenders

Sources: ASIC MoneySmart; Australian Government.

Not necessarily. You’re not required to use one, and plenty of first buyers apply straight to a lender. But it’s a choice, not a flat no: the first time around, a broker often helps more than it would for a repeat buyer, because there’s more you haven’t done before.

The difference isn’t really the broker; it’s you. A first purchase means an unfamiliar process, usually a smaller deposit, lenders’ mortgage insurance, and the government schemes that can help you avoid it. A broker’s value is comparing lenders across all of that. The real question, then, is less “do I need one” and more “what can one actually do for me”.

This guide covers where a broker earns its keep for a first-timer, where it doesn’t, and how to get the most from one. New to brokers? Start with what a mortgage broker does.

Key takeaways
  • A first-home buyer doesn’t have to use a broker: you can apply directly to a lender. But a broker often helps more the first time, when the process and the schemes are unfamiliar.
  • The government’s 5% Deposit Scheme lets eligible first buyers purchase with a 5% deposit and avoid LMI, and you apply through a participating lender, not the government. A broker who knows which lenders offer it can help you find one.
  • A broker compares a range of lenders, which matters most when your situation is less standard: a low deposit, casual or self-employed income, or reliance on a scheme.
  • A broker won’t run the scheme, decide your eligibility, or remove LMI on its own, and its panel isn’t every lender. Know what it can and can’t do.
  • Whether you use a broker or go direct, get your own numbers straight first, so you can judge any recommendation on your terms.

The short answer: no, but it often helps more the first time

Let’s be clear up front: you don’t have to use a broker to buy your first home. You can walk into a bank or apply online, and the loan will be no less valid for it. A broker is an option, not a requirement.

What changes for a first-timer is everything around the loan. You’re likely working with a smaller deposit, which brings in lenders’ mortgage insurance and the government schemes that can waive it. You haven’t compared lenders before, and their policies vary more than most people expect. Two lenders can look at the same first-home buyer and land very differently on a small deposit. That’s the ground a broker is built to cover.

Why does a broker help more when it’s your first time?

A broker’s core job is comparing loans across their panel, which isn’t the whole market but is more than most first buyers would line up alone. That comparison is worth most when your situation isn’t standard; where your deposit is solid and your income is straightforward, going direct can be just as good.

For a first buyer, that’s common. A broker acts in your best interests when recommending a loan, which is a legal duty, not a favour (ASIC MoneySmart). For a first-timer, that means matching you to lenders whose policies fit a smaller deposit or a less standard income, rather than leaving you to guess. Doing that well also means fewer wasted applications, which matters because each application can leave an enquiry on your credit file. How to choose a broker covers that risk.

Where a broker helps a first-timer most A broker helps a first-home buyer most when: your deposit is small, so LMI or a scheme is in play; you're new to the whole buying process; your income is casual, self-employed, or from several sources; you're not sure which lenders suit your situation. Framework: knest.ai. Where a broker helps a first-timer most Where a broker tends to help a first buyer most Your deposit is small, so LMI or a scheme is in play You’re new to the whole buying process Your income is casual, self-employed, or from several sources You’re not sure which lenders suit your situation Framework: knest.ai.

Where a broker adds the most for a first-timer. Framework: knest.ai.

Can a broker help with the 5% Deposit Scheme?

This is where a broker can be genuinely useful. The Australian Government’s 5% Deposit Scheme, formerly the Home Guarantee Scheme, lets eligible first-home buyers purchase with a 5% deposit and avoid lenders’ mortgage insurance. The government guarantees part of the loan, and since October 2025 the scheme has had no income caps and unlimited places (Australian Government).

One detail decides how a broker fits in: you can’t apply for the scheme directly with the government. You apply through a participating lender, as part of a normal home-loan application (Australian Government). Not every lender is on the list, so a broker who knows which participating lenders are likely to fit your situation can save you the legwork. Which participating lenders a broker can reach varies from broker to broker, so it’s worth asking early.

What a broker can’t do is run the scheme or decide your eligibility, and it can’t lift the property price caps, which vary by area (check the scheme’s own price-cap tool). Its job is matching you to a suitable lender, not approving you for the guarantee.

A young first-home buyer holding keys outside their first property
For a first purchase, the broker’s value is working through the schemes and lenders you haven’t dealt with before.

What won’t a broker do for you?

A broker is useful, but it isn’t magic, and a first buyer should know the limits. It won’t decide your scheme eligibility or approve your loan; the lender and the government do that. It won’t remove LMI on its own; a bigger deposit or a scheme does that. And its panel isn’t every lender, so a good broker tells you which ones it can’t reach (ASIC MoneySmart).

As for cost, a broker is usually free to you, because the lender pays it, though what a broker actually costs you has the full picture. And whether a broker beats going straight to a bank at all is its own question, which broker vs bank weighs.

How do you get the most from a broker as a first-timer?

The broker matters, but so does how you show up. Come prepared, and a broker works far better. A few things are worth having straight before you walk in:

  • Your deposit and likely scheme eligibility. That way the conversation starts from your real position, not a guess.
  • A rough sense of your borrowing capacity. It lets you tell whether a recommendation fits you, or just suits the broker.
  • A licence check on ASIC’s registers. While you’re there, gauge whether they know the first-home schemes and low-deposit lenders. A good sign is that they ask about your deposit and goals before pitching a loan.

Then ask the questions that surface a good fit: which participating lenders are likely to fit, why a loan suits you, and what it costs. How to choose a broker and the questions to ask go deeper on both.

Before you decide, get your numbers straight

Whether you use a broker or go direct, the strongest move is the same: know your own position first. A simple order helps. Work out your deposit and whether a scheme applies, get a realistic sense of your borrowing capacity, then compare the actual loan on rate, fees and total cost. Do those in that order, and any recommendation becomes something you can check rather than accept. You can map your borrowing position with knest.ai before you talk to anyone. To get your file in order first, get borrowing-ready as a first-home buyer walks through the documents and numbers. Prepared beats persuaded, whichever way you go.

The bottom line for first-home buyers

You don’t have to use a mortgage broker to buy your first home. But the first time, with a small deposit, an unfamiliar process, and schemes that only work through certain lenders, a good broker often proves its worth. The trick is to treat it as a choice: understand what a broker can and can’t do, come in knowing your own numbers, and pick one who knows the first-home landscape. Do that, and a broker becomes a shortcut, not a leap of faith.

Before you choose a lender or broker
Know your borrowing position first

Get your income, deposit and goals organised with knest.ai’s free AI assistant, and see the factors a lender weighs, so you can judge a broker’s recommendation, or a bank’s, on your own terms.

Ask knest.ai

Frequently asked questions

Do first-home buyers need a mortgage broker?

Not necessarily. You can apply directly to a lender, and many first-home buyers do. But a broker often helps more the first time, when the process is unfamiliar, your deposit is small, or you’re relying on a scheme. It compares lenders across a range and matches you to ones whose policies fit.

Can a mortgage broker help with the 5% Deposit Scheme (formerly the First Home Guarantee)?

Yes, indirectly. The government’s 5% Deposit Scheme is only available through participating lenders, not directly from the government (Australian Government). A broker who knows which participating lenders are likely to fit can help you find one. The broker doesn’t run the scheme or decide your eligibility.

Are mortgage brokers free for first-home buyers?

Usually, yes. For most buyers, first-timers included, a broker is free to you, because the lender pays the commission, not you. A direct fee is possible, and always disclosed in writing first. What a broker actually costs you has the full detail.

Can a mortgage broker get a first-home buyer a better deal?

Not guaranteed. A broker widens the range of lenders you compare, which can surface a better-fitting or cheaper loan, but the loan itself is what matters, not the label. Compare the actual rate, fees and total cost, whether you use a broker or go to a bank directly.

What should a first-home buyer look for in a mortgage broker?

One who is licensed, knows the first-home schemes and low-deposit lender policies, and explains why a loan fits you rather than pushing one option. Check they’re on ASIC’s registers, and that they ask about your deposit and goals before recommending anything.

Sources

Eleanor Hayes, Editor, knest.ai

This article is general information for Australian home buyers, not personal financial or credit advice. knest.ai is a buyer-focused property intelligence platform that provides decision support, not a broker or lender service, and does not replace a licensed mortgage broker or lender. Any broker introduction through the Home Loan Expert is buyer-initiated and never automatic. Where knest.ai receives a benefit from such an introduction, that benefit is disclosed to you. Verify any figures and scheme eligibility for your own circumstances before you act.

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