Home / First home buyers / Government schemes / 5% Deposit Scheme
Without paying Lenders Mortgage Insurance. The scheme is designed for buyers who can comfortably manage repayments but haven't yet saved a 20% deposit.
The Australian Government 5% Deposit Scheme helps eligible first home buyers purchase a home with a lower deposit and avoid Lenders Mortgage Insurance. The government guarantees part of the loan, which is what allows the lender to accept a smaller deposit without insurance.
There is also a 2% deposit pathway available to eligible single parents.
First home buyers with a strong, stable income who haven't yet accumulated a 20% deposit. If your capacity to repay is well ahead of your capacity to save – which is a very common position, particularly while renting – this is the scheme most likely to be relevant.
Buying with a 5% deposit means borrowing 95% of the value. Your repayments will be higher than they would be with a larger deposit, and you'll have less buffer if property values soften. Avoiding LMI is a genuine saving, but it doesn't change the size of the loan.
The property price caps also shape where and what you can buy, and they may not stretch as far as you'd like in some markets. Worth checking before you fall in love with something.
There's no fee to access the guarantee itself. You still pay the usual costs of buying – stamp duty where it applies, conveyancing, inspections and lender fees.
Often yes. The schemes are administered separately, so eligibility for one doesn't rule out the other. It depends on your state and what you're buying.
A defined panel of participating lenders. Not every lender is included, and participating lenders still apply their own credit assessment, so being eligible for the scheme doesn't guarantee approval.
