Australian Government 5% Deposit Scheme (from Oct 2025)
(Previously this was known as First Home Buyers Guarantee (FHBG) scheme)
What it offers
- Buy your first home with as little as a 5% deposit
- No Lenders Mortgage Insurance (LMI) – government guarantees the remainder up to 15%.
- No income limits and unlimited places from 1 October 2025.
- Higher property price caps by location (e.g., Sydney ~ $1.5 M, Melbourne ~ $950 K).
- Available for houses, townhouses, apartments, off-the-plan, or new builds.
For single parents only – 2% deposit
If you are a single parent or legal guardian of one or more dependent children, you may be eligible to borrow 98% (i.e. you contribute only 2% deposit )
To qualify, you must:
- Be single — meaning you have no spouse or de facto partner. (If you’re separated but not legally divorced, you are not considered single.)
- Be the natural parent, adoptive parent, or legal guardian of at least one dependent child.
What is a dependent child?
A dependent child is someone for whom you are the natural or adoptive parent, and who either:
- Meets the definition of a dependent child under the Social Security Act, or
- Lives with you and receives a disability support pension (as defined by the Social Security Act).
Benefits
- Enter the property market sooner with a smaller deposit.
- Save thousands by avoiding LMI fee
Eligibility (main criteria)
- Must be an Australian citizen or permanent resident, aged 18 +.
- Must be a first-home buyer – no property owned in Australia in the past 10 years.
- Must live in the property (owner-occupier, not investment).
- Have at least a 5% genuine deposit.
- Property must be under the regional price cap.
- Loan must be principal & interest with a participating lender.
What the caps are (maximum Price/Value of the property)
- Every property purchase under the scheme must have both the purchase price and the lender’s assessed value at or below the cap for that location. (firsthomebuyers.gov.au)
- For a new build on vacant land, the combined cost of the land + build contract must also stay under the applicable cap. (firsthomebuyers.gov.au)
- There is a helpful postcode search tool on the official site to check the exact cap for a given suburb/postcode. (firsthomebuyers.gov.au)
Price caps by region
Here are the broad caps from firsthomebuyers.gov.au
| State / Territory | Capital city & major regional centres* | Other areas |
| New South Wales (NSW) | $1,500,000 | $800,000 |
| Victoria (VIC) | $950,000 | $650,000 |
| Queensland (QLD) | $1,000,000 | $700,000 |
| Western Australia (WA) | $850,000 | $600,000 |
| South Australia (SA) | $900,000 | $500,000 |
| Tasmania (TAS) | $700,000 | $550,000 |
| Australian Capital Territory (ACT) | $1,000,000 | — |
| Northern Territory (NT) | $600,000 | — |
| Jervis Bay / Norfolk Is. | $550,000 | — |
| Christmas Is. / Cocos | $400,000 | — |
* “Capital city & major regional centres” includes specified large regional areas: in NSW (Illawarra, Newcastle & Lake Macquarie), in VIC (Geelong), in QLD (Gold Coast & Sunshine Coast) (firsthomebuyers.gov.au)
Important to note
- Clients must ensure the property they target sits under the correct cap for that postcode — otherwise they won’t qualify under the scheme.
If any of the following
1.Land price + construction cost, OR
2. Purchase price, OR
3. Property valuation OR
4. “As-if-complete” valuation /TOC valuation—
exceeds the Australian Government 5% Deposit Scheme property threshold, the property will be ineligible, and you cannot proceed under the Scheme.
- Any rebate must be clearly reflected in the Contract of Sale (COS) as a reduced purchase price.
- Using the postcode search tool is a quick way to pre-check viability before proceeding.
- All home loan applications are subject to the Lender’s normal credit approval criteria.
Considerations
- It’s not free money — full home-loan repayments still apply.
- Smaller deposit = higher loan-to-value ratio (typically 95%) → larger repayments.
- Must remain an owner-occupier or you may lose the guarantee.
- Must still meet lender’s normal credit criteria.
- Once approved, buy and settle your property within 90 days.
Source links
→ Please click here to check your eligibility from the govt site
Disclaimer:
The information provided above is based on details available from the Australian Government’s 5% Deposit Scheme at the time of preparation ( Oct 2025) . Scheme rules, eligibility criteria, and property price thresholds may change at any time without notice. Applicants should always verify the latest information directly from the official government website – firsthomebuyers.gov.au – before making any financial decisions or commitments.This information is provided for general guidance only and does not constitute loan approval, eligibility confirmation, or financial advice. All loan applications remain subject to lender credit assessment and final scheme approval.
