Buying your first home in Australia can be challenging, especially when saving for a large deposit. Thanks to the First Home Guarantee and the new 5% deposit scheme, eligible first home buyers can now purchase their dream property with just a 5% deposit. This government-backed program makes homeownership more accessible across Australia, helping buyers step onto the property ladder sooner.
What Is the 5% Deposit Scheme?
Effective from 1 October 2025, the First Home Guarantee allows eligible first-time buyers to purchase a property with a minimum 5% deposit. The government guarantees the lender for up to 15% of the property’s value, enabling you to avoid the additional cost of LMI. As published on 25 August 2025 Treasury Ministers
Key Features of the Scheme
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No Income Caps: Previously, income thresholds limited eligibility. Now, all first home buyers can apply, regardless of income First Home Buyers.
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Unlimited Places: The scheme has been expanded to offer unlimited places, ensuring more Australians have access to homeownership Housing Australia.
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Higher Property Price Caps: Property price limits have been increased to reflect current market conditions. For instance, in Sydney, the cap has risen from $900,000 to $1.5 million
Eligibility Criteria
To qualify for the scheme, you must:
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Be a first-time home buyer.
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Be an Australian citizen aged 18 or older.
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Intend to live in the property for at least six months within the first 12 months of purchase.
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Meet the lender’s eligibility requirements, including income and credit assessments.
It’s important to note that while the scheme reduces the deposit requirement and eliminates LMI, other costs such as stamp duty, legal fees, and conveyancing costs are still applicable.
The 5% Deposit Scheme is a game-changer for first-time home buyers in Australia, making homeownership more accessible than ever. By understanding the scheme’s features and eligibility criteria, you can take the first step towards owning your dream home.
At Rokitup Media, we’re here to support you in showcasing your property or finding the perfect home. Contact us today to learn more about how we can assist you in your property journey.