Home Ownership in Australia: 300,000+ Supported with 5% Deposit Scheme

Apr, 2026Money Matters

New data from Housing Australia shows that more than 300,000 Australians have now “bought or built their own home with support from the Australian Government 5% Deposit Scheme” since it was launched in 2020.

Instead of needing a traditional 20% deposit, eligible buyers can enter the market with as little as 5% of the purchase price.

The government guarantees part of the loan so buyers avoid paying Lenders Mortgage Insurance (LMI), which might have added thousands to upfront costs.

Get a breakdown of how it works, including eligibility and limits, here: Simple steps to fast-tracked home ownership

Apply for the 5% Deposit Scheme as a single, couple or with a friend!

Why this matters for buyers right now

Saving a full 20% deposit can take years. During that time, property prices can shift, and people can find themselves constantly trying to catch up.

For many buyers, the shift from a 20% deposit to 5% can mean:

Entering the market years earlier
Reducing the risk of being priced out
Redirecting savings toward the home itself rather than additional costs

Buying Considerations: what to think about

While lower deposit schemes improve access, they don’t remove the need for careful planning.

Here are a few key considerations.

1. Borrowing Capacity Still Matters

Even with a smaller deposit:

Lenders still assess income, expenses, and loan serviceability
Interest rates and buffers will affect how much you can borrow

A smaller deposit doesn’t automatically increase borrowing power.

2. Budget Beyond the Deposit

Upfront costs can still include:

Stamp duty (depending on eligibility for concessions)
Legal and conveyancing fees
Loan establishment costs

It’s important to factor in the full cost of purchase, not just the deposit.

3. Build Timelines (For House & Land Buyers)

If purchasing land and building:

Construction timelines can vary
There may be a gap between land settlement and build completion

Understanding timelines helps with financial planning and expectations.

4. Long-Term Affordability

Entering the market earlier can be beneficial, but buyers should still consider:

Ongoing mortgage repayments
Interest rate changes
Household financial stability

Schemes improve access but sustainable ownership still depends on long-term affordability.

Manor Lakes Community Fund 2025 recipients – see the full list here.

What Buyers Should Take Away

What hasn’t changed:

Lending criteria still apply
Property affordability remains a key factor
Buyers still need to plan beyond the deposit

What to do next:

Check eligibility for the 5% Deposit Scheme
Understand your borrowing capacity early
Explore land and housing options in growth areas
Seek advice from lenders or brokers before committing

House and land searches climb to four-year high as buyer confidence improves

“The number of buyers looking to build or purchase a new home has surged, with activity reaching the highest levels seen in four years,” Anne Flaherty, senior economist at REA Group, writes on realestate.com.au.

The measurable shift in buyer sentiment was reflected in searches on the New Homes section of realestate.com.au, which rose in January to their highest level since January 2022.

The data suggests that Australians are actively exploring the option of building or purchasing brand-new homes.

Read the article

FAQs: 5% Deposit Scheme Australia

How does the 5% deposit scheme work in Australia?

Eligible buyers can purchase a property with a 5% deposit, with the government guaranteeing part of the loan. This reduces lender risk and can remove the need for LMI.

Who is eligible for the scheme?

Eligibility typically includes:

First home buyers
Income thresholds
Australian citizenship or permanent residency
Purchase within set property price caps

Always confirm current criteria with official sources.

Can you buy land with a 5% deposit?

Yes, depending on the lender and structure, buyers can use the scheme for house and land packages. Conditions may vary, so it’s important to confirm details early.

Do you still pay Lenders Mortgage Insurance (LMI)?

In most cases under the scheme, LMI is not required because the government provides a guarantee to the lender.

Is the scheme only for first home buyers?

The First Home Guarantee is designed for first home buyers, but other programs (like the Family Home Guarantee) support different buyer types.

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