Buy your first home with a 5% deposit and no lenders mortgage insurance. Here's who qualifies, the price caps in every state, and what it really costs.
Not sure which scheme fits? Try our first home scheme checker.
The 5% Deposit Scheme is an Australian Government program run by Housing Australia. It used to be called the Home Guarantee Scheme, and many people still know the first home buyer part of it as the First Home Guarantee.
Normally, if you borrow more than 80% of a property's value, the lender charges lenders mortgage insurance (LMI). Under the scheme, the government guarantees part of your loan instead, so you can borrow up to 95% of the value without paying LMI. The guarantee isn't cash and it isn't a gift towards your deposit — it simply replaces the insurance the lender would otherwise require.
The scheme was expanded significantly from 1 October 2025:
According to Housing Australia, more than 320,000 buyers have been helped into a home through the scheme so far.
To use the 5% deposit option you need to:
Single parents and single legal guardians of at least one dependent child may be able to buy with a deposit of just 2%. The eligibility rules for that option are a little different, so talk to us about your situation.
The price of the home must be at or under the cap for its location. Each state has a higher cap for its capital city and regional centres, and a lower cap for other areas.
| 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 | — |
| NT | $750,000 | $600,000 |
The ACT has a single cap. NT: Darwin $750,000, rest of the territory $600,000. Regional centres include the Central Coast, Illawarra, Newcastle and Lake Macquarie, Richmond–Tweed, Coffs Harbour–Grafton and the Mid North Coast in NSW, Geelong in Victoria, and the Gold Coast and Sunshine Coast in Queensland. Caps are set by postcode — always check yours with the Housing Australia price cap tool.
An existing house, townhouse or apartment; a house-and-land package; land plus a separate contract to build; or an off-the-plan apartment or townhouse. Specific timing rules apply to building and off-the-plan purchases.
Say you're a first home buyer looking at a $650,000 house in Wagga Wagga. Wagga is outside Sydney and the NSW regional centres, so the $800,000 “rest of state” cap applies.
Without the scheme, you'd typically need a 20% deposit ($130,000) to avoid LMI, or pay a significant LMI premium on a 95% loan. That's the difference between buying now and saving for several more years. See our Wagga Wagga page for local prices, or work out your own figures with the upfront costs and stamp duty calculator.
A smaller deposit gets you in sooner, but it isn't free:
You can't apply to the government directly. You apply through a Participating Lender, either by going to that lender or through a mortgage broker. The usual steps are:
Many lenders on our panel are Participating Lenders. We compare them for you, check your eligibility before you start inspecting, and handle the application through to settlement — in English, Mandarin or Cantonese, by phone, video or in person.
Earning under $103,000 (or $165,000 as a couple or single parent) and an Australian citizen? Also compare Help to Buy, where you need just a 2% deposit and the Government contributes up to 40% of the price.
No. Since 1 October 2025 there are no income caps and no limit on the number of places, so you no longer need to check your Notice of Assessment against an income test or wait for a place to open up.
Not under the scheme. The Australian Government, through Housing Australia, guarantees part of your loan, so the lender doesn't charge LMI even though you're borrowing up to 95% of the property value. Without the scheme, LMI at that level can run to tens of thousands of dollars.
Possibly. You can apply if you haven't owned or had an interest in property (including land) in Australia in the last 10 years, even if you owned one before that.
No. It's for owner-occupiers only. You need to live in the home, and the loan must be a principal-and-interest owner-occupier loan.
No. You apply through a Participating Lender, either directly or through a mortgage broker who works with those lenders. Housing Australia doesn't take applications.
No. The scheme only reduces the deposit you need. Stamp duty is a state matter. In NSW, eligible first home buyers pay no transfer duty up to $800,000; in Victoria the exemption applies up to $600,000. Lenders' fees, legal costs and moving costs are also yours to cover.
Once a lender has reserved your place and pre-approved you, you generally have 90 days to sign a contract to buy. Your lender or broker can confirm the exact timing for your loan.
Tell us where you want to buy and roughly what you've saved. We'll confirm the cap, your borrowing power and your total upfront costs — get a free Finance Insight or call 0415 353 927.
General information only, not financial or credit advice. It does not take into account your objectives, financial situation or needs. Scheme rules, price caps and state concessions can change; information is current as at October 2026. Sources: Housing Australia – 5% Deposit Scheme, property price caps, Revenue NSW, State Revenue Office Victoria. Lending criteria, fees and charges apply. Credit services are provided under Connective Credit Services Pty Ltd, Australian Credit Licence 389328.
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