The Australian Government 5% Deposit Scheme

FEDERAL SUPPORT

At a glance: Eligible first-home buyers can buy with a minimum 5% deposit (2% for eligible single parents/legal guardians). The Government guarantee supports the participating lender so eligible buyers can avoid Lenders Mortgage Insurance. There are no income caps or waitlists under the current Scheme.

What is available now

The Australian Government 5% Deposit Scheme is a government guarantee, not a cash payment. The guarantee sits behind the loan with a Participating Lender, which is what allows an eligible buyer to purchase with a smaller deposit than a lender would normally require, without paying Lenders Mortgage Insurance (LMI).

Eligibility

You generally need to:

be at least 18
be an Australian citizen or permanent resident
be a first-home buyer, or not have owned Australian property or land in the previous 10 years
contribute at least 5% of the purchase price (2% under the single-parent/legal-guardian pathway)
buy within the relevant location price cap
live in the property as owner-occupier
use principal-and-interest owner-occupied lending from a Participating Lender
still satisfy that lender’s own credit and servicing criteria: the guarantee does not replace normal lending assessment

Current price caps

State/Territory	Capital / regional centre	Rest of state
NSW	$1.5m	$800k
VIC	$950k (Geelong included)	$650k
QLD	$1.0m (Gold Coast/Sunshine Coast included)	$700k
WA	$850k	$600k
SA	$900k	$500k
TAS	$700k	$550k
ACT	$1.0m
NT	$750k (Darwin/capital)	$600k

Property types

Eligible property can include existing and new homes, townhouses, apartments, house-and-land, off-the-plan purchases and vacant land with a building contract, subject to Scheme rules and the price caps above.

Worked example

Purchase price	$700,000
5% deposit	$35,000
Indicative loan amount	$665,000

Before transaction costs and lender adjustments. The buyer still needs enough funds for legal/conveyancing, inspections, registration, settlement adjustments and any state duty not exempted: see the Funds Position calculator.

Genuine savings and retained cash

The Scheme sets the guarantee framework only. It does not automatically let a buyer retain a fixed six-month repayment buffer or a fixed dollar amount: the Participating Lender decides what genuine savings, gifts and retained funds it will accept, under its own policy.

Ongoing occupancy

Current Scheme rules require the buyer to move in within 6 months of settlement and continue living there while the guarantee remains active.

How this can work with other federal support

The 5% Deposit Scheme can potentially be used alongside the First Home Super Saver Scheme if you independently meet both programs’ and the lender’s requirements. It is a different mechanism from Help to Buy, which uses shared equity rather than a guarantee: see the comparison in that guide.

What to confirm before signing

the current place cap in your target area against the table above
your chosen lender is a current Participating Lender
your own genuine-savings position against that lender’s specific policy
whether your state or territory also offers duty relief you can combine with this Scheme: check the Government Costs & Support hub for your state