For many young Australians, saving for a first home feels like chasing a moving target. Rising property prices, higher living costs, and stricter lending requirements make the deposit hurdle harder to clear every year. 

The government’s First Home Guarantee (often referred to as the “5% Deposit Scheme”) is designed to help. It allows eligible first-home buyers to purchase a property with as little as a 5% deposit without paying lenders' mortgage insurance (LMI). For someone buying a home in a capital city, that could mean saving tens of thousands of dollars upfront. 

How the Scheme Works 

• Eligible buyers can purchase with only 5% deposit 

• The government guarantees up to 15% of the loan, removing the need for LMI 

• Property price caps apply, and these vary by city and region 

• Places in the scheme are limited each year 

Updated Price Caps (October 2025) 

These are the maximum property values eligible under the scheme from October 2025: 

These higher thresholds make the scheme far more accessible, particularly in Sydney, Melbourne and Brisbane, where property prices have risen sharply. 

Why This Matters 

For younger Australians, including the children of many of our clients, the scheme could mean: 

• Entering the property market sooner 

• Saving thousands by avoiding LMI 

• Reducing the years spent saving for a full deposit 

But while the scheme lowers barriers, it doesn’t remove the need for careful planning. Buyers still need to consider affordability, interest rates, and how home ownership fits into their broader financial goals. 

Final Thought 

The 5% Deposit Scheme won’t be right for everyone, but for eligible first-home buyers it represents a rare opportunity to step onto the property ladder sooner. 

If you or your family members are considering your first home, now is the time to learn more about how the scheme works before the places are taken.