The Australian Government 5% Deposit Scheme: Your Key to Home Ownership

Buying your first home can feel like a big step — especially when saving for a deposit and worrying about extra costs like Lenders’ Mortgage Insurance. The good news? The Australian Government 5% Deposit Scheme is here to make home ownership more achievable for first home buyers.

What is the 5% Deposit Scheme?

The 5% Deposit Scheme is a government initiative designed to help first home buyers purchase a property with as little as a 5% deposit — without the need to pay costly Lenders’ Mortgage Insurance. This can significantly reduce upfront costs, making it easier to get on the property ladder sooner.

What’s new from 1 October 2025?

From 1 October, the scheme has been expanded to make it even more accessible:

• No income caps: Previously, eligibility was limited based on household income. Now, all first home buyers can apply regardless of income.
• No waiting lists: More people can access the scheme — there’s no longer a limit on the number of participants.
• Higher property price caps:
  • New South Wales: Up to $1.5 million in capital city and regional centres, and $800,000 in other areas.
  • Victoria: Up to $950,000 in capital city and regional centres, and $650,000 in other areas.
• No Lenders’ Mortgage Insurance required: First home buyers no longer have to pay for Lenders’ Mortgage Insurance if they meet the scheme requirements.

Who is eligible?

• Must be a first home buyer.
• Must intend to live in the home as your primary residence.
• Must meet all the requirements set by participating lenders.

You can also check your eligibility using the official government Eligibility Quiz .

Can you buy land with the scheme?

Yes — the 5% Deposit Scheme can also be used to buy land, as long as you intend to build a home on it. The combined cost of the land and home build must stay within the relevant price cap for your area.

Why this matters for first home buyers

The 5% Deposit Scheme opens the door for many Australians who may have thought buying a home was out of reach. By reducing upfront costs and removing the need for Lenders’ Mortgage Insurance, it makes saving for a deposit much easier and accelerates your path to home ownership.

Next steps

If you’re ready to explore how this scheme could work for you:

• Visit a participating lender to discuss your eligibility and home options.
• Check the property price cap for your suburb to see what’s available.
• Explore move-in ready homes and new communities available through Allam Homes.

The 5% Deposit Scheme is your chance to step onto the property ladder sooner and start building your future today.