What is the 5% Deposit Scheme?

The Australian Government 5% Deposit Scheme (Home Guarantee Scheme) is designed to help eligible home buyers purchase a property with a smaller deposit. Instead of saving a standard 20% deposit, eligible applicants may be able to buy a home with as little as 5% deposit through participating lenders.

The government provides a guarantee to the lender, which may reduce or remove the need for Lenders Mortgage Insurance (LMI), depending on eligibility.

Types of Government Home Guarantee Schemes

The scheme includes several programs:

First Home Guarantee

Supports eligible first-home buyers to purchase a home with a lower deposit.

Regional First Home Buyer Guarantee

Assists eligible buyers purchasing in regional areas outside major cities.

Family Home Guarantee

Supports eligible single parents or legal guardians with dependent children to enter the property market with a lower deposit requirement.

Each scheme has different eligibility rules, income caps, and property price limits.

How the Scheme Works

• The buyer contributes a minimum deposit (usually 5%)
• A participating lender provides the home loan
• The government guarantees part of the loan
• This may reduce or remove the need for LMI in eligible cases
• The property is purchased subject to lender approval and scheme conditions

Who Can Apply?

Eligibility typically depends on:

• Australian citizenship or permanent residency
• Income limits (varies by scheme type)
• First-home buyer status (in most cases)
• Meeting property price caps
• Intending to live in the property for a required period