The Australian Government 5% Deposit Scheme
The Australian Government 5% Deposit Scheme, formerly the Home Guarantee Scheme, lets a first home buyer purchase with a 5% deposit and no lenders mortgage insurance, because Housing Australia guarantees the rest to the lender. Since 1 October 2025 there is no income cap, no limit on places, and regional buyers are included without a separate guarantee. This guide covers who qualifies, the price caps, what changed, the single parent 2% stream, and what the participating lenders publish.
- Formerly the Home Guarantee Scheme; the First Home Guarantee is now its general stream and the regional guarantee is folded in with unlimited places (government site, Treasury, Regional Australia Bank)
- Minimum 5% deposit for first home buyers, 2% for single parents and legal guardians; no LMI because Housing Australia guarantees the lender
- No income cap and no cap on the number of guarantees since 1 October 2025; location price caps still apply and were raised
- Eligible properties: houses, townhouses, apartments, house-and-land packages, off-the-plan and building on vacant land, at or below the cap
- Apply only through a participating lender; CommBank publishes you may be asked for more than 5%, IMB reserves the place for 90 days after conditional approval
WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees, or other loan amounts might result in a different comparison rate. Comparison rates are based on a secured loan of $30,000 over 5 years for vehicle finance and $50,000 over 5 years for equipment finance, as required under the National Credit Code.
What is the 5% Deposit Scheme?
The government's first home buyer site describes it as a scheme for first home buyers with a minimum 5% deposit, or single parents and legal guardians with a minimum 2% deposit, and states that it was formerly known as the Home Guarantee Scheme. Housing Australia provides a guarantee to your lender for the part of the loan above 80% of the property's value, which is the part lenders mortgage insurance would otherwise cover, so the lender waives LMI. You still borrow the full amount and make the full repayments; the guarantee protects the lender, not you. Regional Australia Bank publishes the current structure: a General Stream, formerly the First Home Buyer Guarantee, with unlimited guarantees each financial year.
What changed on 1 October 2025?
Treasury's release announcing the expansion lists the changes: no caps on the number of regional Australians who can access the scheme, price caps that reflect what it actually costs to buy in regional markets, and more community-owned and regional lenders expected to join the panel. The government's site adds "now with expanded eligibility" and both the CommBank and single parent pages state that your income does not restrict your access. In practice the old three-guarantee structure (First Home Guarantee, Regional First Home Buyer Guarantee, Family Home Guarantee) became one scheme with two deposit levels: 5% for first home buyers anywhere, 2% for single parents and legal guardians.
Who is eligible?
| Requirement | First home buyers (general stream) | Single parents and legal guardians |
|---|---|---|
| Minimum deposit | 5% of the property value | 2% of the property value |
| Income cap | None (removed 1 October 2025) | None; the government publishes that income does not restrict access |
| Places | Unlimited each financial year | Unlimited |
| Prior ownership | First home buyer, or "starting over" after a period without owning | Need not be a first home buyer; must not currently own |
| Relationship status | Singles or couples | Single: no spouse or de facto partner; separated but not divorced does not count as single (government site) |
| Dependants | Not required | At least one dependent child within the meaning of the Social Security Act, natural, adoptive or under legal guardianship |
| Property | Owner-occupied; houses, townhouses, apartments, house-and-land packages, off-the-plan, or building on vacant land, at or below the location price cap | |
| LMI | Not charged; Housing Australia guarantees the lender | |
| Application | Only through a participating lender as part of a home loan application; the lender's own credit policy also applies | |
The single parent home loans guide covers the 2% stream in detail, including how the dependent child test works and what Westpac and IMB publish.
What are the price caps?
The scheme applies to homes at or below a price cap set for each location, with separate caps for capital cities and large regional centres and for the rest of each state. The government's site provides a price cap tool and says it is a guide only: confirm the cap with your participating lender for any home you are considering. The caps were raised on 1 October 2025, and Treasury's release says the regional caps now reflect actual regional prices. For a house-and-land package or a build, the cap applies to the combined land and construction cost. The cap is the binding constraint in most capital cities, so check it before you start looking, and remember that your borrowing capacity, not the cap, sets what you can actually pay: the borrowing power calculator is the other half of the test.
What do participating lenders publish?
Checked against each lender's published page on 20 September 2026; "Not published" means the page does not state it. The panel and the terms change without notice, so confirm with the lender or your broker before relying on them.
| Lender | Deposit as published | Process and timing | Combining with other help | Other published terms |
|---|---|---|---|---|
| CommBank | Minimum 5% for first home buyers, 2% for single parents and guardians; you may be required to contribute more than 5% depending on eligibility and your financial situation | Speak to a Home Lending Specialist | Not published on the scheme page | Income does not restrict access; no LMI; property types listed as houses, townhouses, apartments, house-and-land, off-the-plan, vacant land builds below the caps |
| Westpac | Minimum 2% for single parents; 5% general stream | Talk to a home loan specialist | Not published | No LMI when supported by the scheme; principal and interest repayments except during a construction phase; vacant land with a contract to construct is eligible |
| IMB | 2% for single parents and guardians, 5% for first home buyers | After conditional approval IMB collects the eligibility documents and reserves your guarantee place; you then have 90 days to buy | Can be used with the First Home Super Saver Scheme and state first home owner grants and stamp duty exemptions | Explains that 20% is usually needed to avoid LMI and the guarantee replaces it |
| Regional Australia Bank | As low as 5% of the property value | Through an accredited lender at the bank | Lists the government initiatives together | Publishes the General Stream name (formerly the First Home Buyer Guarantee) and that Housing Australia offers unlimited guarantees each financial year with no cap |
| The Mutual, TMB, People First Bank | Publish scheme pages for single parents and first home buyers | Through the bank | Not published | Participating mutuals; terms follow the scheme rules |
| Bank Australia | Participating in Help to Buy; 5% Deposit Scheme page not fetched | — | — | See the Help to Buy guide |
5% Deposit Scheme, Help to Buy or a guarantor?
Three ways to buy with less than 20% and no LMI, and they suit different people. The 5% Deposit Scheme leaves you with the whole loan and the whole property; it needs the income to service a 95% loan. Help to Buy has the government take an equity share of up to 30% or 40% so the loan is smaller, at the cost of sharing the gain and an income cap. A guarantor loan uses a family member's equity instead of a government guarantee, with no price cap but a risk to the guarantor. The low deposit guide compares all three against simply paying LMI. A broker accredited with the participating lenders can lodge the scheme application and compare the alternatives; Your Finance Guide refers you to one licensed broker partner for that, and we do not lend or assess applications ourselves.
First home buyer guides
The schemes, the grants and the calculators.
5% Deposit Scheme FAQs
Am I eligible for the first home guarantee?
What changed on 1 October 2025?
Is the Regional First Home Buyer Guarantee still available?
How much deposit do I need?
Do I pay lenders mortgage insurance?
What are the price caps?
Can I use the scheme to build, or with other grants?
How do I apply, and how long does the place last?
Buy with 5% down and no LMI
Tell us where you want to buy and what you have saved, and we refer you to one licensed broker partner accredited with the participating lenders who checks the price cap, reserves the place and lodges one application. Free for borrowers, no obligation.