Australian Government’s 5% Deposit Scheme – What It Means for Homebuyers

Overview

Starting 1 October 2025, the Australian Government has expanded support for first home buyers with its 5% Deposit Scheme. Traditionally, buying a home required a deposit of 20% or more, making homeownership increasingly challenging as property price rise. The scheme allows first home buyers to enter the market with just a 5%deposit – without waitlists, income restrictions and with higher property price caps.

What’s new?

Key changes from 1 October 2025 include:

1. Lower Deposit Requirement – 5%

   You can now buy a property with only a 5% deposit, instead of waiting to save 20%.

2. No Income Restrictions

   The scheme is open to all eligible first-home buyers.

3. Higher Property Price Caps 

   For example, in NSW the property price cap rises from $900,000 to $1,500,000 – giving you access to more suburbs and larger homes.

4. Unlimited Access 

   There are no limits on how many first home buyers can apply.  

Who can apply?

To be eligible, you must:

• Be an Australian citizen or permanent resident.

• Be at least 18 years old.

• Have saved a 5% deposit.

• Be a first-home buyer.

• Purchase a home within the location’s price cap.

• Planning to live in the property as your main residence (investment properties are excluded).

• Apply individually or with a partner, family member, or friend.

Use the Scheme Eligibility Checker to see if you qualify.

Benefits for Buyers

• Get into the market sooner – Save years on deposit savings by only needing 5%.

• Greater options – Removal of income caps and higher property price limits mean more homes and suburbs are accessible.

• Fairer access - Unlimited applications ensure no waitlists or missed opportunities.

Things to Keep in Mind

• Competition may increase – More buyers could drive up prices in popular areas.

• Housing supply remains limited – Intense demand could create bidding pressure.

• Potential lender conditions – Low-deposit buyers might face higher interest rates or stricter lending rules.

Conclusion

The 5% Deposit Scheme is a game changer for aspiring first home buyers. By lowering the upfront deposit and increasing your purchasing options, it makes entering the property market more achievable than ever. For anyone who has been waiting to buy their first home, this is an opportunity to turn that goal into reality.

For guidance on navigating the 5% Deposit Scheme, please contact our people.

Eollyn Cortes 0478 727 395

Sagang Chung 0431 435 333