Saving a 20% deposit can feel like the biggest hurdle to buying your first home.
And in a market where prices continue to move, that target can feel like it keeps getting further away.
But for many buyers, there’s another path.
The 5% Deposit Scheme (First Home Guarantee) has already helped more than 300,000 Australians get into the market sooner – without needing a full 20% deposit.
If you’re unsure what deposit you actually need, it’s worth having a conversation with FirstPoint before ruling yourself out.
How the 5% Deposit Scheme works
The biggest challenge for most first home buyers isn’t repayments – it’s the deposit.
Traditionally, anything under 20% means paying Lenders Mortgage Insurance (LMI), which can cost thousands.
The 5% Deposit Scheme changes that.
Eligible buyers can purchase with as little as 5% deposit (or 2% for single parents) – without paying LMI. Australian Government 5% Deposit Scheme
The government effectively guarantees a portion of the loan, giving lenders the confidence they’d normally require from a larger deposit.
That means:
- You may be able to buy sooner
- You may be able to keep more savings in your pocket
- You don’t need to wait years to hit 20%
If you want to understand whether you may be eligible, FirstPoint can walk you through the criteria and lender options.
What can you buy?
The scheme is flexible.
You can:
- Buy an existing property
- Build a new home
- Choose from a range of property types
Price caps depend on location, but there are:
- No income caps
- No limit on the number of places each year
The key is making sure the property and loan structure align with lender requirements.
Before you start house hunting, it’s worth checking your eligibility and borrowing power first.
Can you combine it with other incentives?
Yes – and this is where it becomes even more powerful.
The scheme can often be used alongside other first home buyer incentives, including:
- First Home Owner Grants (FHOG)
- Stamp duty concessions or exemptions
- First Home Super Saver Scheme
This can further reduce upfront costs and help you enter the market sooner.
If you’re not sure what incentives apply to you, FirstPoint can help map out what’s available.
What to consider before jumping in
While the scheme can be a great option, it’s important to look at the full picture.
A smaller deposit usually means:
- A larger loan amount
- Potentially higher repayments
- Slower equity growth initially
That’s why choosing the right home loan – and understanding the numbers – is critical.
Before making a decision, it’s worth sitting down and running through the scenario properly.
Start with a plan
The biggest advantage you can have as a first-home buyer is clarity.
Understanding: How Much Can I Borrow for a Home Loan | Borrowing Calculator
- what you may be able to borrow,
- what deposit you actually need
- and what options are available
can help you move with confidence when the right property comes up.
If you’re thinking about buying your first home, talk to FirstPoint and get a plan in place.
Call FirstPoint on 9527 2230 to start the conversation.
Disclaimer: The content of this article is general in nature and provided for information purposes only. It does not constitute financial or tax advice and does not consider your personal circumstances. Individual circumstances, lending criteria, fees & charges, terms & conditions apply. Consider seeking professional advice before making decisions.
