The Australian Government 5% Deposit Scheme lets eligible first home buyers buy with a 5% deposit and no Lenders Mortgage Insurance (LMI). It was formerly the Home Guarantee Scheme, which included the First Home Guarantee. Since 1 October 2025 it has no income caps, no limit on places and no waiting list. Updated 12 October 2026.
How it works
The government guarantees to your lender the part of the loan above 80% of the property value. That is the risk LMI normally covers, so the lender does not charge it. It is a guarantee, not a payment: you repay the whole loan, and you owe the government nothing.
Who can use it
- First home buyers, with a minimum 5% deposit
- Single parents and legal guardians, with a minimum 2% deposit (the Family Home Guarantee pathway)
- You must live in the home as an owner-occupier, for as long as the guarantee applies
- The home must be under the price cap for its location
The application asks for proof of citizenship or residency, among other documents. The official eligibility tool and Information Guide set out every condition.
Price caps
Caps vary by location and were raised in the October 2025 changes. Check the cap for the area you are buying in with the official tool, and confirm it with your lender: the tool is only a guide.
What you can buy
A house, townhouse or apartment, existing or newly built, or vacant land you build on. Investment purchases do not qualify, because you must live in the home.
Lenders
You apply through a Participating Lender, not to the government; the official site lists them. The lender sets the interest rate, not the scheme, so rates differ between participating lenders. A mortgage broker can compare those on its panel.
How to apply
- Check eligibility with the official online tool.
- Contact a Participating Lender. It assesses your eligibility and submits the application. You provide your name, date of birth, Medicare number, proof of citizenship or residency, and a Home Buyer Declaration.
- Once pre-approved, you have 90 days to find a home and sign a contract of sale.
- The lender handles final approval. Settle and move in.
Trade-offs
- You borrow 95% of the price, so repayments are higher. At 6.0% over 30 years, a $570,000 loan is $3,417 a month; a $480,000 loan (20% deposit) is $2,878.
- With a 5% buffer, a fall in prices can leave you owing more than the home is worth if you need to sell early.
- If you stop meeting the obligations, such as living in the home, the guarantee can end and the lender may require LMI or other costs.
Related scheme
Help to Buy is a separate shared-equity scheme: the government contributes up to 30% of the price of an existing home or 40% of a new one, with a minimum 2% deposit. You repay the contribution when you can or when you sell.
Use the LMI calculator to see the premium the scheme avoids at your price, and the borrowing capacity calculator to see how much you can borrow.