Preparing financially
Australian Government 5% Deposit Scheme
Buy your first home with a 5% (or 2%) deposit and no Lenders Mortgage Insurance, under a Government guarantee to your lender.
- Eligible first-home buyers can purchase with a 5% deposit (2% for eligible single parents or legal guardians) without paying LMI.
- From 1 October 2025 the Scheme has no income caps or waitlists for eligible applicants.
- You apply through a Participating Lender, not directly to Government.
- A location-specific property price cap applies — confirm the current figure with your lender before relying on it.
How the Scheme works
Formerly known as the Home Guarantee Scheme, this federal scheme lets eligible first-home buyers purchase with a minimum 5% deposit (Housing Australia / Australian Government, verified 29 Jul 2026) (2% for eligible single parents or legal guardians), with the Government guaranteeing the lender against the shortfall so Lenders Mortgage Insurance is not required. From 1 October 2025 the Scheme removed income caps and waitlists for eligible applicants (Housing Australia / Australian Government, verified 29 Jul 2026). You cannot apply directly — applications go through a Participating Lender as part of a home-loan application.
What it is not
The guarantee is not a grant and does not reduce your loan amount or repayments. You remain responsible for the full loan and all repayments; the Government's guarantee simply removes the lender's need to charge LMI. A property price cap applies and varies by location — always check the current cap with a Participating Lender before relying on it, as Delora has not independently reproduced the full location-by-location cap table here.
Practical checklist
Before assuming you qualify
- Confirm you meet the first-home buyer and residency eligibility rules
- Check the current property price cap for your specific location
- Ask a Participating Lender to confirm your eligibility as part of a loan application
- Understand that a smaller deposit usually means a larger loan and more total interest
Relevant Delora tool
Questions for a professional
- Am I likely to be eligible for the 5% Deposit Scheme based on my situation?
- What is the current property price cap where I'm looking to buy?
- How would my repayments compare with a 5% deposit versus waiting to save more?
Official resources
Sources and methodology
- Australian Government 5% Deposit Scheme — Housing Australia / Australian Government (retrieved 29 Jul 2026)
Figures on this page are drawn from Delora's local knowledge graph, refreshed from these primary sources and checked for changes on a regular schedule. If a figure here looks out of date, the official source above is always the authority — please let us know.