First Home Buyers to Access 5% Deposit from October 2025
From 1 October 2025, first home buyers across Australia will be able to purchase a property with just a 5% deposit under the Federal Government’s expanded scheme.
The initiative allows eligible buyers to secure a home loan with a smaller deposit, while the Government guarantees part of the loan. This removes the need for costly Lenders Mortgage Insurance, potentially saving buyers tens of thousands of dollars.
Key updates include:
No caps or income limits – the scheme is now open to all first home buyers.
Increased property price caps – aligned with average house prices, giving buyers more choice.
Wider lender access – the scheme will be offered through major banks, smaller regional lenders, and customer-owned banks.
To put it into perspective, a buyer could purchase a $600,000 home with a $30,000 deposit instead of needing the full 20%. This change could save years of deposit saving time and significantly reduce upfront costs.
The Government expects this adjustment to save first home buyers around $1.5 billion in mortgage insurance costs in the first year alone. This is one part of the broader housing agenda aimed at easing entry into the property market, alongside increasing housing supply and support for renters.
For more information, buyers can visit the Housing Australia website.