First Home Buyer 5% Deposit Scheme Starts Early! 🏡
Exciting news for first home buyers! The first home buyer 5 deposit scheme is launching three months early. The start date is now this October. This is a huge change for many Australians. It means you can own your home sooner.
In short: The federal government will bring forward the start date of its promise to expand the First Homebuyer Guarantee by three months. The scheme allows first homebuyers to purchase a property with just a 5 per cent deposit, without paying a lender mortgage insurance penalty, with the government assuring the remainder of the deposit in the case of a default. What’s next? The expanded scheme will begin in October, with income limits to eligibility scrapped.
What is the Scheme?
The scheme helps you buy a home. You only need a 5% deposit. The government helps with the rest of the deposit. This means you do not pay for Lenders’ Mortgage Insurance (LMI). LMI can cost tens of thousands of dollars. The government will also remove income limits. This means more people can apply.
Saving Time and Money
Saving a 20% deposit can take years. With this scheme, you can buy a home much faster. This also saves you a lot of money on rent.
This table shows how much you can save:
| House Price | Time to save a 20% deposit | Time to save a 5% deposit | Average rent saved |
| $500,000 | 7 years | 2 years | ~$87,500 |
| $600,000 | 8 years | 2 years | ~$126,000 |
| $700,000 | 9 years | 2 years | ~$171,500 |
| $800,000 | 11 years | 3 years | ~$224,000 |
| $900,000 | 12 years | 3 years | ~$283,500 |
| $1,000,000 | 13 years | 3 years | ~$350,000 |
*Assuming a first home buyer with an average annual income of $100,000 who saves 15% of their income every year. This is consistent with the assumptions used in the CoreLogic Housing Affordability Report in November 2024. **Estimated by multiplying the national house gross rental yield of 3.5% (as reported in Cotality’s Home Value Index release of 1 July 2025) by the value of the property. Source: Treasury
Higher Price Caps
The government is also raising the price caps. This is a big help. For example, the cap in Sydney will go from $900,000 to $1.5 million. In Melbourne, it will go from $800,000 to $950,000. Brisbane will go from $700,000 to $1 million. For more information, click here.
What’s Next?
We are here to help you. Our brokers know this scheme well. We can help you see if you are eligible. We will help you apply. We will find a great home loan for you.
For more financial news, check out our article on the latest RBA rate cuts.
Contact us today!
- Phone: 1300 050 099 or 044789007
- Email: [email protected]
- Website: ezmortgagebroker.com.au
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