Buy with a 5% deposit — and skip years of saving.
Check if you qualify for a 5% deposit loan
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Own your first home sooner
Saving 20% in Sydney can take most of a decade.
On a typical Sydney purchase, a 20% deposit plus purchase costs runs well into six figures — and prices often rise faster than savings do.
Since 1 October 2025, the Australian Government 5% Deposit Scheme (run by Housing Australia) lets eligible buyers purchase with as little as 5% saved and pay no lenders mortgage insurance (LMI). Places are unlimited and income caps have been removed.
Here's how it fits together.
How it works
5% deposit
The minimum is 5% of the lender-assessed property value. Purchase costs are additional, and you may need to contribute more of your available savings.
Government guarantee
Housing Australia guarantees up to 15% of the property value to the participating lender. This is not a grant or cash deposit; you remain responsible for the entire loan.
No LMI
Eligible guaranteed loans avoid LMI. The guarantee protects the lender, not you against missed repayments or repossession.
Participating lenders
The scheme is only offered through approved lenders. We compare them for rate, policy and turnaround.
General stream (5%) — who qualifies
- Australian citizen or permanent resident, aged 18 or over
- Buying a home to live in, with a principal-and-interest loan
- Deposit of at least 5% but less than 20% of the lender-assessed property value
- First home buyer, or haven't held an interest in Australian property or land in the past 10 years
- Apply alone or with one other person; both joint applicants must satisfy the ownership test when signing the loan agreement
Why a 5% deposit loan?
- Stop paying rent sooner and start building equity in your own home.
- Keep savings for stamp duty, moving costs and a safety buffer.
- No LMI added to your loan balance.
- Offset and redraw may be available, depending on the selected lender and product.
Property price caps (from 1 Oct 2025)
Both the purchase price and lender-assessed value must be at or below the cap. Separate land/build contracts must meet the cap in total. NSW regional centres also include Central Coast, Coffs Harbour–Grafton, Illawarra, Mid North Coast, Richmond–Tweed, Newcastle and Lake Macquarie; VIC includes Geelong; QLD includes Gold Coast and Sunshine Coast. Check the official postcode tool with your lender.
| State / territory | Capital city & regional centres | Rest of state |
|---|---|---|
| NSW | $1,500,000 | $800,000 |
| VIC | $950,000 | $650,000 |
| QLD | $1,000,000 | $700,000 |
| WA | $850,000 | $600,000 |
| SA | $900,000 | $500,000 |
| TAS | $700,000 | $550,000 |
| ACT | $1,000,000 | Whole territory |
| NT | $750,000 | $600,000 |
| Jervis Bay Territory & Norfolk Island | $550,000 | $550,000 |
| Christmas Island & Cocos (Keeling) Islands | $400,000 | $400,000 |
Government scheme vs a standard low-deposit loan
| Government scheme | Standard loan + LMI | |
|---|---|---|
| LMI | Not payable — the government guarantees the lender | Usually payable; paid upfront or added to the loan |
| Eligibility | Fixed rules: owner-occupier, citizenship/PR, price cap, deposit band | No federal rules — mainly the lender's credit policy |
| Typical deposit | From 5% (2% for single parents) | Around 5%–10% |
| How to apply | Only through a participating lender — not the government directly | Any lender that offers high-LVR loans; assessment is often stricter |
- Other government assistance has its own rules; confirm any proposed combination with the participating lender.
- You can still check state stamp duty concessions and the First Home Owner Grant (FHOG).
- Scheme eligibility does not mean the loan will be approved — the lender still assesses your application.
- From 2025-10-01, no income cap and unlimited places; applications go through a participating lender, not directly to government.
- Generally principal-and-interest repayments over up to 30 years, plus up to 3 years for construction. Limited construction interest-only arrangements are permitted.
- Generally move in within 6 months of settlement or the new-build occupancy certificate, and remain an owner-occupier while guaranteed. Ask the lender about exemptions.
- Available savings must be contributed as required. If you have at least a 20% deposit available after purchase costs, the scheme is not available.
- Dependent-child eligibility involves age, living arrangements, care and income tests. For older dependants or disability support pension recipients, refer to the current Single Parents Guide rather than relying on a general age cut-off.
- Older articles mentioning $125k / $200k income caps or 35,000 places describe the rules before the October 2025 reforms.
Let's get you home
Frequently asked questions
Who is eligible for the general stream?
- • Australian citizens or permanent residents aged 18 or over who are first home buyers, or have not held a qualifying Australian property or land interest in the 10 years before signing the loan agreement. Both joint applicants must qualify.
- • You must intend to live in the property as your home.
- • Deposit of at least 5% but less than 20%, generally principal-and-interest repayments, and both the purchase price and lender-assessed property value at or below the area's cap.
Is there an income limit?
- No. Since 1 October 2025 the income caps have been removed and places are unlimited. The lender still assesses whether you can afford the repayments — scheme eligibility does not guarantee loan approval.
Do I need to pay LMI?
- No. With the government guarantee in place, LMI isn't charged on eligible loans.
What if I don't qualify for the scheme?
- Some lenders offer non-scheme low-deposit loans, usually with LMI, while family guarantees may be an alternative. Availability, fees and approval depend on the lender and your circumstances.
Official resources
General information only. Checked 2026-11-02 against the government scheme website, Housing Australia expansion announcement and both Information Guides (1 July 2026). These official publications share an administrator and are not an independent legal opinion. Eligibility and credit approval must be confirmed with the participating lender.
