Many Australians believe they need a 20% deposit before buying their first home. That is no longer the case.
Under the expanded 5% Deposit Scheme (previously known as the Home Guarantee Scheme), eligible buyers can purchase a property with as little as a 5% deposit – without paying Lenders Mortgage Insurance (LMI).
At Property Planning Australia, we guide first home buyers through the scheme, compare lenders and build strategies that set you up for long-term success.
How the Australian Government 5% Deposit Scheme Works
- Deposit as low as 5%: You only need to save a 5% deposit.
- Government guarantee: The government guarantees up to 15% of your loan, which means you can avoid costly LMI.
- Owner-occupier requirement: You must live in the home and investment property purchases are not eligible.
- No income caps: From 1 October 2025, income limits have been removed, opening the scheme to more Australians.
- Unlimited places: There is no longer a capped number of places.
- Increased price caps: Higher property price caps for capital cities and regions
Source: Housing Australia
Benefits of the Home Guarantee Scheme
- You no longer need to wait until you have a 20% deposit saved.
- The government’s guarantee replaces the LMI insurance cost.
- Updated price caps make inner-city and metro homes more accessible.
- More banks and institutions are participating, giving you options and flexibility across lenders.
Risks and Considerations
While the scheme opens doors, it’s not suitable for everyone. It is important to speak to a Property Planning Australia strategic mortgage broker to discuss your situation.
Borrowing with a 5% deposit means:
- Higher monthly repayments since you are financing a larger loan.
- Different lenders may apply different rules, pricing and product options.
- Standard lending requirements including serviceability, credit history and savings evidence will still apply.
That’s why expert guidance matters, particularly if you want to grow your portfolio in the future!
At Property Planning Australia, our process is designed to remove the guesswork:
- Confirm your eligibility for the Australian Government 5% Deposit Scheme (previously known as the Home Guarantee Scheme)
- Assess your true borrowing capacity to avoid financial stress.
- Compare participating lenders and match you with the right structure.
- Set up your property plan for the future
We help you plan for the future and not just your first purchase by integrating property planning and cash flow strategies for your family. We combine mortgage broking with property planning so you can buy with confidence and clarity and know where you are going next.
Our Services
We are a strategic mortgage broker: Our mortgage broking service is free. We are paid by the lender across our panel of 40+ institutions.
For those who want a tailored, long-term property plan, we offer a fee-for-service model to create strategies that go beyond your first purchase and plan for your future.
The expanded Home Guarantee Scheme could be your opportunity to secure your first home sooner than you thought possible and start building equity in the property market of Australia.
Before you commit, ensure you understand your options, repayments and long-term plan.
Contact us today to book a free consultation and explore how the 5% deposit scheme can work for you.
Reach Out to Us
If you would like to discuss your next steps, property plans, and mortgage strategy, get in touch with us today. Our team of experts is here to guide you through the complexities of the market and help you achieve your property goals.
