24/08/2026
For many first home buyers, saving a deposit remains one of the biggest hurdles to getting into the property market. The Australian Government 5% Deposit Scheme is designed to reduce that hurdle by helping eligible buyers purchase a home with a much smaller deposit – without paying Lenders Mortgage Insurance (LMI).
Formerly known as the Home Guarantee Scheme, the program was expanded and renamed on 1 October 2025. Under the current scheme, eligible first home buyers can purchase with a minimum 5% deposit, while eligible single parents and legal guardians can purchase with a minimum 2% deposit.
There are no income caps, no waiting lists and no limit on the number of places available – although property price caps and lending criteria still apply.
Ordinarily, buyers borrowing more than 80% of a property’s value may be required to pay Lenders Mortgage Insurance.
Under the Australian Government 5% Deposit Scheme, the Government provides a guarantee to the participating lender for part of the home loan. This enables eligible buyers to borrow with a smaller deposit without paying LMI.
Importantly, the Government guarantee is not a cash payment towards your home and does not replace your deposit. You still need to qualify for a home loan and meet the participating lender’s credit and lending requirements.
The scheme has two main pathways.
First home buyers – minimum 5% deposit
You may be eligible if you:
Single parents and legal guardians – minimum 2% deposit
Eligible single parents and single legal guardians with at least one dependent child can access the scheme with a minimum 2% deposit.
Unlike the first home buyer pathway, you do not necessarily need to be purchasing your first home. However, you cannot have another property interest once your new home settles, and applications under this pathway must be made individually rather than jointly.
For Western Australian buyers, the current maximum property values under the scheme are:
Property price caps are location-specific, so it’s important to confirm the applicable cap for the suburb and postcode you’re considering before making an offer.
You can check the Australian Government property price cap checker here.
The scheme can be used for a wide range of eligible residential properties, including:
If you’re purchasing an existing property, you can read more about Established Home Loans here. If you’re planning to build, see our Construction Home Loans page here for more information about how construction finance works.
On an $800,000 property, for example, a 5% deposit equates to $40,000.
That is considerably less than the $160,000 that would represent a 20% deposit. For an eligible buyer, the scheme can therefore significantly reduce the amount of time needed to save before entering the market, while also avoiding LMI.
There are still other purchasing costs to consider, and the amount you can borrow depends on your income, expenses, existing commitments and the participating lender’s assessment.
You can use our Loan Calculators here to get an initial indication of your borrowing power and potential repayments.
Depending on your circumstances, you may also be eligible for other assistance such as the Australian Government’s First Home Super Saver Scheme or Western Australia’s First Home Owner Grant and first home owner rate of duty.
Each program has its own eligibility requirements, so qualifying for one does not automatically mean you will qualify for another.
There is more to buying your first home than simply having the minimum deposit.
Our mortgage brokers can help you work out how much you may be able to borrow, check whether you meet the 5% Deposit Scheme requirements, compare suitable participating lenders available through our panel and guide you through the home loan application process.
We can also help you understand the costs involved and how the different first home buyer incentives available in WA may apply to your circumstances.
Thinking about buying your first home?
The information contained in this article is general in nature and does not take into account your individual objectives, financial situation or needs. Lending criteria, fees, terms and conditions vary between lenders and are subject to change.
