Can You Buy Your First Home With Just a 5% Deposit?
Everything you need to know about buying your first home with a smaller deposit, including how the Home Guarantee Scheme works and what costs you should budget for.
Yes. Eligible first home buyers may be able to purchase a property with just a 5% deposit through the Australian Government's Home Guarantee Scheme.
This may also allow eligible buyers to avoid paying Lenders Mortgage Insurance (LMI), provided they meet the eligibility requirements and purchase within the applicable price caps.
What Is the Home Guarantee Scheme?
The Home Guarantee Scheme is an Australian Government initiative designed to help eligible first home buyers purchase a property sooner by reducing the amount of deposit required.
Normally, borrowers with less than a 20% deposit are required to pay Lenders Mortgage Insurance (LMI). Under the scheme, eligible buyers may be able to purchase with as little as a 5% deposit without paying LMI.
Instead of saving for many more years, the Government guarantees part of the loan, allowing participating lenders to borrow with a smaller deposit through participating lenders.
You don't always need a 20% deposit to buy your first home.
Eligible first home buyers may be able to purchase with as little as a 5% deposit under the Australian Government's Home Guarantee Scheme, while avoiding Lenders Mortgage Insurance (LMI).
Could You Be Eligible?
To qualify for the Home Guarantee Scheme, you'll generally need to meet the following requirements:
Australian Citizen or Permanent Resident
You must meet the residency requirements that apply to the scheme.
First Home Buyer
You generally must not have previously owned residential property in Australia (subject to current scheme rules).
Minimum 5% Genuine Deposit
You will usually need at least a 5% deposit plus enough funds to cover purchase costs.
Purchase Price Within Your State's Price Cap
The property must be below the maximum purchase price for the location.
Owner Occupied Property
The home must generally be intended as your principal place of residence.
Costs You'll Still Need to Budget For
A smaller deposit doesn't mean buying a home is free. There are still some upfront costs you'll need to plan for before settlement.
5% Deposit
The minimum deposit required for eligible buyers under the Home Guarantee Scheme.
Conveyancing
You'll usually need a solicitor or conveyancer to handle the legal work during your purchase.
Building & Pest Inspection
Highly recommended before purchasing an established property to avoid expensive surprises.
Government Fees
Depending on your state, you may still need to budget for transfer fees and other government charges.
Want to Check the Official Eligibility Criteria?
The Australian Government provides the most up-to-date eligibility requirements, property price caps and participating lenders.
Visit the Official Home Guarantee Scheme →Have Questions About Buying Your First Home?
Whether you're ready to buy or simply want to understand your options, I'm here to help you take the next step with confidence.
Book a Strategy Call
