Getting a foot on the property ladder is often hardest at the deposit stage, but two major federal schemes are widening the options for buyers with smaller deposits.
The 5% Deposit Scheme lets eligible first home buyers purchase with just a 5% deposit and no lenders’ mortgage insurance (LMI). Property price caps apply – from $500,000 in regional South Australia to $1.5 million in Sydney – so what you can buy depends on where you are searching.
Help to Buy goes further. It allows eligible buyers to enter the market with only a 2% deposit and no LMI, with the government taking up to 40% ownership in a new home or up to 30% in an existing home. Income caps apply – $100,000 for individuals and $160,000 for couples or single parents – and participants must live in the property. Previous homeowners who no longer own a property may also qualify.
Key takeaways for first home buyers
- You may now qualify with a 2–5% deposit instead of saving a much larger amount.
- Lower deposits reduce upfront costs, but scheme rules affect your long-term position.
- Lender participation differs and each scheme changes your borrowing power in different ways.
