New 5% Deposit Scheme for First Home Buyers

Great news for first home buyers! The Australian Government has expanded the First Home Guarantee Scheme, replacing the previous Home Guarantee Scheme with more accessible options. Now, eligible buyers can purchase a home with just a 5% deposit - without paying Lenders Mortgage Insurance (LMI).

What is the 5% Deposit Scheme?

The 5% Deposit Scheme (officially called the First Home Guarantee) allows first home buyers to purchase a property with as little as a 5% deposit. The government guarantees up to 15% of the property value, meaning you don't need to pay LMI - which can save you tens of thousands of dollars.

How Much Could You Buy?

Under the expanded scheme, here's what you could purchase with a 5% deposit:

Who is Eligible?

To qualify for the First Home Guarantee scheme, you must meet the following criteria:

Basic Requirements

• Be an Australian citizen or permanent resident
• Be at least 18 years old
• Be a first home buyer (never owned property in Australia)
• Intend to live in the property as your principal residence
• Meet the income thresholds

Income Thresholds

• Singles: Up to $125,000 per year
• Couples: Up to $200,000 combined per year

LMI Savings Example

Without this scheme, buying with less than a 20% deposit typically means paying Lenders Mortgage Insurance. Here's what you could save:

How to Apply

The First Home Guarantee is accessed through participating lenders and mortgage brokers. Here's the process:

1. Check your eligibility - Review the criteria above
2. Get your finances in order - Save your 5% deposit and have your income documentation ready
3. Speak to a mortgage broker - We can help you access the scheme through our panel of lenders
4. Apply for pre-approval - Know your budget before you start house hunting
5. Find your property - Within the price caps for your area
6. Complete your application - Your broker will guide you through the process

Other Government Support for First Home Buyers

The 5% Deposit Scheme can often be combined with other government assistance:

First Home Owner Grant (FHOG)

In NSW, you may be eligible for a $10,000 grant when buying or building a new home valued up to $600,000.

Stamp Duty Concessions

First home buyers in NSW don't pay stamp duty on properties up to $800,000, with concessions available up to $1,000,000.

First Home Super Saver Scheme

You may be able to withdraw voluntary super contributions (up to $50,000) to put towards your deposit.

Is Now the Right Time to Buy?

With property prices predicted to rise 6% in 2026 and the expanded deposit scheme reducing barriers to entry, many first home buyers are choosing to act now rather than wait.

However, every situation is different. It's important to consider your personal circumstances, job security, and long-term plans before making this significant decision.