The 5% Deposit Scheme
The "5% deposit scheme" is how most people refer to the federal First Home Guarantee. It lets eligible first home buyers get into a home with just a 5% deposit — and no Lenders Mortgage Insurance.
What changed in 2025
The scheme was expanded in 2025. The biggest change: there are no longer any income caps — your salary no longer affects eligibility. Property price caps were also lifted and now vary by state and region (see the table below). Place limits have effectively been removed too.
How a 5% deposit becomes possible
Lenders usually charge Lenders Mortgage Insurance (LMI) when you borrow more than 80% of a property's value. Under the scheme, the government guarantees up to 15% of the value — so a 5% deposit is treated like 20%, and LMI is waived. On a typical purchase that can save you many thousands of dollars upfront.
Check your state's price cap
The home you buy must be at or below the price cap for its location. Pick your state to see the cap and eligibility instantly.
5% of the purchase price — e.g. $75,000 on a $1,500,000 home, with the government guarantee covering LMI.
- No income caps — your earnings don't affect eligibility.
- Owner-occupiers who are Australian citizens or permanent residents, 18+.
- Purchase price must be at or below the cap shown above.
Estimates only. Caps are set by the Australian Government and reviewed periodically — confirm your eligibility and the current cap with a broker.
All states at a glance
| State / Territory | Capital & major centres | Rest of state |
|---|---|---|
| NSW | $1,500,000 Sydney & major regional centres | $800,000 Rest of state |
| VIC | $950,000 Melbourne & Geelong | $650,000 Rest of state |
| QLD | $1,000,000 Brisbane, Gold Coast & Sunshine Coast | $700,000 Rest of state |
| WA | $850,000 Perth | $600,000 Rest of state |
| SA | $900,000 Adelaide | $500,000 Rest of state |
| TAS | $700,000 Hobart | $550,000 Rest of state |
| ACT | $1,000,000 Canberra (whole territory) | — |
| NT | $600,000 Darwin (whole territory) | — |
Caps are set by the Australian Government and reviewed periodically. Confirm the current cap for your suburb with a broker before you buy.
Worked examples
Here's how a 5% deposit stacks up at different price points. The deposit shown is 5% of the purchase price, and the "LMI avoided" is the rough Lenders Mortgage Insurance premium you'd typically pay on a standard 5% deposit loan without the guarantee.
$500,000 home
Saves about $12,000 in LMIYou get in with $25,000 instead of $100,000 — roughly $75,000 less to save — and skip the LMI premium entirely.
$650,000 home
Saves about $19,500 in LMIYou get in with $32,500 instead of $130,000 — roughly $97,500 less to save — and skip the LMI premium entirely.
$800,000 home
Saves about $27,000 in LMIYou get in with $40,000 instead of $160,000 — roughly $120,000 less to save — and skip the LMI premium entirely.
Figures are illustrative estimates only. Actual LMI, stamp duty and deposit requirements depend on the lender, your circumstances and your state. Run your own numbers with our calculators or speak to a broker.
Who can use the 5% deposit scheme?
- First home buyers who are Australian citizens or permanent residents, aged 18+.
- Buying as an owner-occupier within the property price cap for your area.
- No income test — your earnings no longer affect eligibility.
- Able to service the loan repayments under the lender's assessment.
Rules and caps are set by the Australian Government and change over time. This is general information only — confirm your eligibility with a broker.
5% deposit scheme FAQs
Could you buy with a 5% deposit?
Book a free 15-minute chat. We'll check your eligibility for the scheme and show you what's possible.