The 5% Deposit Scheme explained
Last checked
As at Next checkThe Australian Government 5% Deposit Scheme helps eligible first home buyers buy with a small deposit.
- Deposit: from 5%, or 2% for eligible single parents
- No lenders mortgage insurance: the Australian Government provides a guarantee to your lender.
- No income caps and no waiting list (since 1 October 2025)
- Property price caps apply, set by location
The scheme was formerly known as the Home Guarantee Scheme. Its parts had their own names, which many people still search for. What happened to them.[1]
What does the scheme do?
Lenders mortgage insurance (LMI) is usually a one-off cost when you borrow more than 80% of a home's value. It protects the lender, not you.[4] Under the scheme, a participating lender can lend up to 95% of the home's value (98% for eligible single parents) without charging LMI.[2] You still pay the rest of the upfront costs, such as stamp duty unless a concession applies (see our state-by-state tracker), and legal fees.
Who is eligible?
- Australian citizens or permanent residents aged 18 or over.[2]
- First home buyers, which includes people who have not owned a home or land in Australia in the last 10 years. You can apply alone or with one other person.[2]
- The home must be for you to live in, with a principal and interest loan of up to 30 years.[2]
- Single parents and legal guardians: see the 2% deposit option below.
- No income caps, and no waiting list.[1][2]
Single parents: the 2% deposit option
The scheme's Single Parent Stream is for eligible single parents or legal guardians with at least one dependent. They can buy with a deposit from 2%.[5][2] A participating lender can then lend up to 98% of the home's value without charging LMI.[2] You do not have to be a first home buyer: people who have owned a home before can apply.[5] You must apply alone and cannot own any other property once the new home settles.[2]
Thinking of using the scheme? Zafar can check whether you may be eligible.
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What are the property price caps?
Both the price and the lender's valuation must be at or below the cap for where the home is. For a new build, the land and build cost together must be under it.[2] These caps differ from the Help to Buy caps.
| State or territory | Capital city and regional centres | Rest of state |
|---|---|---|
| New South Wales # | $1,500,000 | $800,000 |
| Victoria # | $950,000 | $650,000 |
| Queensland # | $1,000,000 | $700,000 |
| Western Australia # | $850,000 | $600,000 |
| South Australia # | $900,000 | $500,000 |
| Tasmania # | $700,000 | $550,000 |
| Australian Capital Territory # | $1,000,000 | n/a |
| Northern Territory # | $750,000 | $600,000 |
Which lenders take part, and can Zafar arrange it?
Only participating lenders can offer the scheme. Housing Australia publishes the current list of participating lenders.[3] Ask Zafar which lenders on his panel currently offer the scheme.
First Home Guarantee, Family Home Guarantee and Regional First Home Buyer Guarantee: what happened to them
On 1 October 2025, the Home Guarantee Scheme was renamed the Australian Government 5% Deposit Scheme.[5] Lenders and older articles may still use the old names. Just before the change, it had three parts.[5][7]
- First Home Guarantee: the option for first home buyers with a deposit from 5%.[7] The renamed scheme still offers this, as its General Stream, with no income caps and unlimited places.[5]
- Family Home Guarantee: the option for single parents and single legal guardians, with a deposit from 2%.[7] The renamed scheme's Single Parent Stream covers this group, also from a 2% deposit. You do not have to be a first home buyer.[5]
- Regional First Home Buyer Guarantee: stopped taking new applications on 1 October 2025.[7] Housing Australia said the First Home Guarantee would replace it.[6] Regional buyers now apply under the same scheme, with the price cap for where they buy.[2]
5% Deposit Scheme or Help to Buy?
With this scheme you own all of the home and borrow most of the price. With Help to Buy, the government pays part of the price and owns that share. You borrow less, but you share any rise in value. Help to Buy has income caps and is for Australian citizens only.
Worth weighing up
- A 5% deposit means a larger loan, so you pay interest on more money for longer.
- With little equity, a fall in property values could leave you owing more than the home is worth.
- The lender still assesses whether you can afford the repayments; the scheme does not change that.
- Zafar compares loans from his lender panel, not the whole market.
General information only. It does not take into account your objectives, financial situation or needs, and it is not a recommendation to enter into any credit contract. Eligibility is decided by the scheme administrator and the lender.
What changed
- : Renamed from the Home Guarantee Scheme. Income caps and place limits were removed, and property price caps were raised.[5]
- : The Regional First Home Buyer Guarantee stopped taking new applications.[7]
Page history: first published from the Housing Australia fact sheet headed 1 July 2026. Former scheme names added .
Thinking of using the scheme?
Zafar can check whether you may be eligible and which lenders on his panel take part.
Ask Zafar about the 5% Deposit Scheme Call 0402 357 860
Sources
- Housing Australia (firsthomebuyers.gov.au), Australian Government 5% Deposit Scheme. Retrieved .
- Housing Australia (firsthomebuyers.gov.au), Australian Government 5% Deposit Scheme fact sheet (headed 1 July 2026). Retrieved .
- Housing Australia (firsthomebuyers.gov.au), 5% Deposit Scheme participating lenders. Retrieved .
- Moneysmart (ASIC), Lenders mortgage insurance (LMI). Retrieved .
- The Treasury, Supporting people into home ownership. Retrieved .
- Housing Australia, Unlimited places, higher property price caps for first home buyers from 1 October 2025. Retrieved .
- Federal Register of Legislation, Explanatory Statement, Housing Australia Investment Mandate Amendment (Delivering on Our 2025 Election Commitment) Direction 2025. Retrieved .
Common questions
Is there an income cap on the 5% Deposit Scheme?
No. Since 1 October 2025 the scheme has no income caps and no waiting list. Property price caps still apply.
Do I pay lenders mortgage insurance with the 5% Deposit Scheme?
No. A participating lender can lend up to 95% of the home's value (98% for eligible single parents) without charging lenders mortgage insurance.
Can permanent residents use the 5% Deposit Scheme?
Yes. Applicants must be Australian citizens or permanent residents aged 18 or over.
Is the First Home Guarantee still available?
Not under that name. On 1 October 2025 the Home Guarantee Scheme, which included the First Home Guarantee, was renamed the 5% Deposit Scheme. Eligible first home buyers can still buy with a 5% deposit and no LMI.
What happened to the Regional First Home Buyer Guarantee?
It stopped taking new applications on 1 October 2025. Regional first home buyers now use the 5% Deposit Scheme, with the price cap for where they buy.
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