Australian Government 5% Deposit Scheme

Buy your home sooner with a smaller deposit

Saving a home deposit can take years. The Australian Government 5% Deposit Scheme can help eligible home buyers purchase sooner with a minimum deposit of just 5% – or 2% for eligible single parents and legal guardians – without paying Lenders Mortgage Insurance (LMI).

Formerly known as the Home Guarantee Scheme, the expanded program has no income caps, no waiting lists and unlimited places.

Property price caps and lender eligibility requirements still apply.

Scheme at a glance

• Minimum 5% deposit for eligible first home buyers.
• Minimum 2% deposit for eligible single parents and legal guardians.
• No income caps.
• Unlimited places and no waiting list.
• No Lenders Mortgage Insurance for eligible loans under the scheme.
• Available for eligible new and established properties, including house and land packages and some vacant land purchases.
• The Australian Government provides a guarantee to the lender – it does not provide the deposit or make a cash contribution towards your property.

Who can apply?

First home buyers

To be eligible under the first home buyer pathway, you generally need to:

• be an Australian citizen or permanent resident aged 18 or over;
• be purchasing your first home, or not have owned a home or land in Australia during the previous 10 years;
• have saved a minimum 5% deposit;
• purchase a property within the applicable price cap;
• intend to live in the property as an owner-occupier; and
• apply individually or jointly with one other person.

Joint applicants do not need to be a couple – you may be able to purchase with a partner, sibling, family member or friend, provided both applicants meet the relevant requirements.

Looking at an existing home? Find out more about Established Home Loans here.
Planning to build? See our Construction Home Loans page here.

Single parents and legal guardians

Eligible single parents and single legal guardians with at least one dependent child may be able to purchase with a minimum deposit of just 2%.

You do not need to be a first home buyer under this pathway. However, you cannot hold another property interest once the new home settles, and you must apply individually rather than jointly with another borrower.

WA property price caps

The maximum property values currently available under the scheme in Western Australia are:

Perth – $850,000
Rest of Western Australia – $600,000

The applicable cap depends on the location of the property, and buyers should confirm the current limit for the relevant suburb and postcode before purchasing.

What properties are eligible?

The Australian Government 5% Deposit Scheme can be used to purchase or build a range of residential property types, including:

• an existing house, townhouse or apartment;
• a newly built home;
• a house and land package;
• an off-the-plan property; or
• vacant land with an eligible building contract.

The property must be in Australia, fall within the relevant price cap and be purchased as your home rather than as an investment property.

Do you still need to qualify for a home loan?

Yes.

The 5% Deposit Scheme helps eligible buyers overcome the deposit and LMI hurdle, but it does not guarantee that your home loan application will be approved.

You must still meet the participating lender’s normal lending criteria, including its assessment of your income, expenses, debts, credit history and ability to make the required repayments.

If you’re starting to work out what you may be able to afford, our Loan Calculators can help you estimate your borrowing power and home loan repayments.

How The Loan Company can help

Navigating government schemes and lender requirements can be confusing – particularly when you’re buying your first home.

Our mortgage brokers can:

• check the key 5% Deposit Scheme requirements with you;
• help you understand the property price cap that applies to your chosen location;
• assess your borrowing capacity and deposit position;
• compare suitable participating lenders available through our lender panel;
• explain your home loan options and associated costs;
• arrange pre-approval where appropriate; and
• manage the loan application through to settlement.

Depending on your circumstances, we can also help you understand how other first home buyer assistance – including the Western Australian First Home Owner Grant and first home owner rate of duty – may fit alongside your home loan.

For a broader look at the finance options available, visit our Loan Options page.

Ready to find out if you could qualify?

Every buyer’s circumstances are different, and eligibility for the scheme does not automatically mean you will qualify for a particular home loan.

Get in touch to speak with one of The Loan Company’s experienced mortgage brokers and find out what options may be available to you.

You can also read our Australian Government 5% Deposit Scheme blog for a straightforward guide to how the scheme works for WA home buyers.