The Australian Government 5% Deposit Scheme may help eligible first home buyers purchase a home sooner with a minimum 5% deposit and without paying Lenders Mortgage Insurance (LMI). Eligible single parents and legal guardians may be able to apply with a minimum 2% deposit.
The expanded Australian Government 5% Deposit Scheme does not give the buyer money towards the purchase price or guarantee home loan approval. The Government 5% Deposit Scheme is intended to help eligible home buyers reach home ownership and their own home sooner. The buyer remains responsible for the loan, repayments and other purchasing costs.
What Is the Australian Government 5% Deposit Scheme?
The Australian Government 5% Deposit Scheme, formerly the Home Guarantee Scheme, supports aspiring home buyers on a path towards home ownership. Housing Australia administers the well-established program and applications are made through participating lenders.
Without the deposit scheme, buyers with less than a 20% deposit may need to pay Lenders Mortgage Insurance. Under the Government 5% Deposit Scheme, the Australian Government provides a guarantee that allows the participating lender to offer an eligible home loan without requiring the buyer to pay Lenders Mortgage Insurance while the guarantee applies.
For a first home buyer with a 5% deposit, the guarantee may cover up to 15% of the property value, allowing a loan of up to 95%, subject to scheme and lender requirements.
Since 1 October 2025, the Home Guarantee Scheme name has been replaced and the expanded scheme has had no income caps, no waitlist and no limit on available places. Other eligibility criteria, property price caps and lender requirements still apply.
Who Is the Australian Government 5% Deposit Scheme For?
The scheme has separate pathways for first home buyers and for single parents or legal guardians. The deposit, ownership and application rules differ between the two pathways. For younger Australians considering their first purchase, understanding the broader trends around Gen Z property ownership can also provide useful context on how this generation is approaching the property market.
First Home Key Features and Eligibility
An applicant under the first home buyer pathway generally needs to:
- be at least 18 years old
- be an Australian citizen or permanent resident
- have a minimum deposit of 5% of the home’s lender-assessed value
- be a first home buyer or not have owned a home or land in Australia during the previous 10 years
- buy an eligible home in Australia within the applicable property price cap
- live in the property as an owner-occupier
- apply alone or jointly with one other person, such as a partner, friend or family member
- obtain an eligible owner-occupier home loan with principal and interest repayments from a participating lender.
Single Parents Key Features and Eligibility
Eligible single parents and legal guardians may be able to purchase with a minimum 2% deposit. They must apply alone and generally cannot own another home or hold another property interest when the new home settles.
Applicants should check the official single parent and legal guardian information and confirm their position with a participating lender.
What Types of Property Can Be Purchased?
The Australian Government scheme supports several residential property types, which may include:
- a new or existing home, including a house
- a townhouse, unit or apartment
- a house and land package
- an off-the-plan purchase
- vacant land with an eligible fixed price contract to build.
The home must be an owner-occupied residential property. Investment properties are not eligible. Construction and off-the-plan purchases also have contract, building and move-in dates.
How Do Property Price Caps Work?
Every property must be within the price cap for its location. Caps differ between capital cities, regional centres and other areas, so buyers should use the official postcode search tool for the suburb they are considering.
Both the purchase price and the lender-assessed value must be within the cap. A difference between them may require additional buyer funds.
Any valuation or property assessment required for the home loan or scheme is handled through the participating lender. Duo Tax does not provide valuations for bank or loan purposes.
Does the Scheme Guarantee Home Loan Approval?
No. Scheme eligibility and home loan approval are separate decisions. A buyer must still satisfy the participating lender’s credit policy, serviceability assessment and security requirements.
How Do Buyers Apply?
Buyers cannot apply directly to Housing Australia. The general process is:
- Review the current scheme documentation and use the official eligibility checker.
- Contact a participating lender or an authorised mortgage broker.
- Provide the requested identity, residency, deposit and financial documents.
- Obtain conditional approval before searching within the relevant price cap.
- Confirm the property and contract meet the scheme and lender requirements before committing.
The lender assesses whether applicants meet borrower eligibility criteria, reserves a scheme place where appropriate and manages the guarantee. Successful applicants generally have a 90-day pre-approval period to sign an eligible contract.
What Costs Should Buyers Allow For?
The Australian Government 5% Deposit Scheme can lower upfront costs by reducing the deposit requirement and removing LMI while the guarantee applies. It does not remove other costs associated with buying an own home.
Other costs can include transfer duty, conveyancing, inspections, loan fees and insurance. Borrowing 95% of the property value can mean higher interest repayments than a 20% deposit.
How Is It Different From Help to Buy?
The 5% Deposit Scheme is a government guarantee provided to the lender. The Australian Government does not take an ownership share in the property.
The Help to Buy Scheme is a separate shared equity support program with different income limits, price caps and eligibility rules. The deposit scheme is also different from the Home Super Saver Scheme and Commonwealth Rent Assistance.
Frequently Asked Questions
Are There Income Caps for the Australian Government 5% Deposit Scheme?
No. Income caps were removed from 1 October 2025. Buyers must still satisfy all scheme eligibility requirements and the participating lender’s loan approval criteria.
Can Previous Homeowners Apply?
They may be eligible under the first home buyer pathway if they have not owned a home or land in Australia during the previous 10 years. The single parent and legal guardian pathway has different ownership requirements.
Where Can Buyers Check Their Eligibility?
Housing Australia’s eligibility checker provides an initial indication. A participating lender makes the formal eligibility and lending assessment.
What Should Prospective Buyers Do Next?
The scheme may support home ownership and help eligible applicants buy a home sooner. Start with the official eligibility checker and postcode search tool, then speak with a participating lender before making an unconditional offer. If you need to establish a property’s market value for tax or accounting purposes, you can order an independent property valuation report from Duo Tax. Duo Tax does not provide valuations for bank or loan purposes, so any assessment required for the scheme or home loan must be arranged through your participating lender.
These ongoing obligations matter because more buyers may enter the housing market sooner, but every home buyer must still meet the participating lender’s requirements.
General information only: This article is general in nature and does not take into account your individual circumstances. It should not be relied on as financial or legal advice. Check the current official scheme information and speak with a participating lender and qualified legal professional before making decisions.
