The Australian Government 5% Deposit Scheme: what buyers should know

This article was originally published when the program was known as the Home Guarantee Scheme. It has been updated to reflect the Australian Government 5% Deposit Scheme introduced from 1 October 2025.

What the scheme can provide

• Eligible first-home buyers may purchase with a minimum 5% deposit.
• Eligible single parents or legal guardians may purchase with a minimum 2% deposit.
• The Australian Government provides a guarantee to the participating lender, which may allow an eligible buyer to avoid Lenders Mortgage Insurance.
• There are no income caps, no waitlists and no set limit on available places for eligible buyers.

Key eligibility points

• Applicants must be Australian citizens or permanent residents and at least 18 years old.
• A first-home buyer must be buying for the first time or must not have owned a home or land in Australia during the previous 10 years.
• The property must be in Australia, fall within the applicable location price cap and be occupied as the buyer’s home.
• The loan and property must meet scheme rules, and the buyer must also satisfy the participating lender’s credit assessment and lending policy.

How to apply

Applications are made through a participating lender as part of a home-loan application—not directly to Housing Australia. A broker can help you assess the scheme alongside other loan options and prepare the supporting information the lender requires.

A low deposit is not the whole budget

Buyers still need to allow for purchase costs, inspections, conveyancing, possible stamp duty, moving expenses and an appropriate financial buffer. Borrowing with a smaller deposit can also mean a larger loan and higher total interest, so the complete position should be considered carefully.