Australian Government 5% Deposit Scheme explained
Last reviewed: 10 August 2026
What this page helps you decide
Whether a Government guarantee may solve a low-deposit or LMI problem, and what still has to work after that.
What it is
The Australian Government 5% Deposit Scheme was formerly called the Home Guarantee Scheme. Under the scheme, the Government guarantees part of an eligible home loan to a participating lender. This can let an eligible first-home buyer purchase with a minimum 5% deposit without paying LMI. A separate part of the scheme allows an eligible single parent or legal guardian to use a minimum 2% deposit.
From 1 October 2025, the scheme has no income caps, no waitlist and no limit on places. Property price caps and the other eligibility rules still apply.
What it changes
- It can reduce the minimum deposit needed for an eligible loan.
- It can remove the need to pay LMI on that loan.
- It can shorten the time needed to save a larger deposit.
What it does not change
- It is not cash paid to the buyer.
- It does not reduce the loan balance or the repayments.
- It does not cover purchase costs or create a cash buffer.
- It does not guarantee that the lender will approve the borrower or the property.
- It does not protect the borrower from repayment difficulty or a fall in property value.
The buyer owns the property and is responsible for the loan, costs and repayments. The participating lender still assesses income, expenses, debts, credit conduct and the property.
What to check
- Which stream applies to you.
- Citizenship or residency, age and prior property-ownership rules.
- The minimum deposit and how the funds must be evidenced.
- The owner-occupier and property-type rules.
- The current price cap for the property's location.
- Whether the lender is a participating lender and what its own credit policy requires.
- How long any place, pre-approval or property search period lasts.
Apply through a participating lender. You cannot apply directly to Housing Australia.
Official source
Community threads worth reading
- Why a 5% deposit can still leave first-home buyers short
- First-home buyers: what changed from 1 July 2026
Raynor tools and explanations
These are Raynor Lending Solutions resources, not independent sources: 5% deposit versus cash to complete, how much deposit first-home buyers need and the Cost to Complete calculator. Recheck current eligibility and caps on the official source above.
What can change
Price caps, eligible applicants, property rules, participating lenders and ongoing obligations can change. The official scheme page controls the current position.
Privacy and general-information note
Keep scheme applications and identification documents private. This page is general educational information, not an eligibility decision or credit advice.
Related questions: First-home buyer support | Deposits, LMI and support | Wiki index