Buying your first home in Australia just became a lot easier. From1 October 2025, the Australian Governments5% Deposit Schemewill officially expand, making it possible forFirst Home Buyer Australiato purchase a property with as little asa 5% deposit and no Lenders Mortgage Insurance (LMI). This update could save eligible buyerstens of thousands of dollarsand help them enter the market years sooner. What Is the 5% Deposit Scheme for First Home Buyer Australia? TheAustralian Government 5% Deposit Schemeallows first home buyers to secure a mortgage with adeposit as low as 5%, while the government guarantees up to the remaining 15%.
This means you will not need to payLenders Mortgage Insurance (LMI), a fee usually required when your deposit is under 20%. It is part of the governments broader housing affordability plan to help more Australians get into home ownership sooner.
on the official government website
Whats Changing from October 2025? The 5% Deposit Scheme isnt new, but the 2025 update makes it far more accessible.
Heres whats changing
No income caps, higher earners can now qualify.
No limits on places, there are no annual quotas or waiting lists.
Higher property price caps, to reflect the real cost of housing in each region.
Support for single parents, eligible parents can still buy with a 2% deposit.
Expanded home types, includes houses, apartments, townhouses, and house and land packages. In short, more Australians will finally have the chance to buy their first home without the years of saving that used to be required.
on the Prime Ministers official release
Whos Eligible? To qualify for the 5%
Deposit Scheme, you need to meet these basic criteria
Be anAustralian citizenor permanent resident.
Be18 years or older.
Havesaved at least 5%of the homes purchase price (2% for single parents).
Be afirst home buyer(or havent owned property in Australia in the last 10 years).
Plan tolive in the home(it cannot be an investment).
Apply through aparticipating lender, including: Commonwealth Bank: Bank: Choice:
Apply through aparticipating lender, including
Commonwealth Bank
NAB
Bendigo Bank
Peoples Choice: How Does It Work?
Heres a simple breakdown of how the scheme works
Check your eligibilityusing the governments online tools
Check your eligibilityusing the governments online tools
Talk to a participating lenderto discuss pre-approval.
Find an eligible propertyunder the price cap for your region.
Apply for your loan, the lender manages the guarantee with the government.
Settle and move in! Youll still need to meet standard lending requirements (like proof of income and credit checks), but the key difference is that the government guarantee removes the need for LMI, which can save you anywhere between $10,000 and $30,000 depending on your loan size. Property Price Caps by Region The property price caps vary by location, but theyve increased significantly from previous years.
Adelaide metro: up from $600,000 to$900,000
Regional SA: up to$500,000
Sydney: up to$1.5 million
Melbourne: up to$1.2 million
Brisbane: up to$900,000 These higher limits reflect todays real property prices, helping buyers in major cities and growing regions alike.
Source
9News Australia Benefits of the 5%
Deposit Scheme Heres why the update is such a game changer:
You can buy sooner, no more waiting years to save a 20% deposit.
No LMI, saving you potentially tens of thousands of dollars.
No income limits, available to a much wider group of buyers.
Higher property caps, more choice of homes and suburbs.
Available nationwide, no regional restrictions. For many Australians, this scheme will make the difference between renting indefinitely and owning a home this year. Things to Keep in Mind While the scheme is an incredible opportunity, there are a few things to be aware of
Asmaller depositmeans alarger loan, so make sure repayments fit your budget.
Interest ratesstill apply on the full amount you borrow.
Youll still paystamp duty,legal fees, andongoing home ownership costs.
You mustlive in the hometo remain eligible under the guarantee. Before applying, speak to your lender or a financial advisor to understand your total costs and obligations. What This Means for South Australians For South Australians, especially first home buyers in Adelaide, this expansion is huge. The $900,000 price cap now covers a wide range of homes across Adelaides metro area, not just outer suburbs. That opens the door for more buyers who previously would have been priced out of the scheme. At BuildPilot, weve already seen a spike in first home buyers wanting to explorehouse and land packagesthat fall under the new caps. If youre ready to find out what you can afford, well help you compare builders, designs, and land options that work within your 5% deposit. **Next Steps:**
How to Take Advantage of the Scheme
Visit the official scheme page to confirm your eligibility
Visit the official scheme page to confirm your eligibility
Talk to one or more participating lenders: Commonwealth Bank: Bank: Choice:
Talk to one or more participating lenders
Connect withBuildPilotto help you: Find the right builder for your budget and design. Compare house and land options that meet the schemes limits. Understand total costs and timelines before you commit.
Connect withBuildPilotto help you
Find the right builder for your budget and design.
Compare house and land options that meet the schemes limits.
Understand total costs and timelines before you commit. Final Thoughts The expansion of the 5% Deposit Scheme is one of the most significant housing policy shifts in recent years and a real win for first home buyers across Australia. It removes the biggest barrier for most people:saving the deposit. At BuildPilot, were here to help you take that next step with confidence. From choosing land and builder options to comparing designs that fit your budget, our goal is to make your home buying journey clear, affordable, and stress free. Useful Links
Commonwealth Bank, 5% Deposit Scheme
NAB, Government 5% Deposit Scheme
Bendigo Bank, First Home Buyer Hub
Peoples Choice, First Home Buyer Resources
Official Government Page: Disclaimer This article is intended to provide general information only and should not be taken as financial, legal, or lending advice. BuildPilot is not a financial advisor or mortgage broker and does not provide credit assistance. Eligibility for the 5% Deposit Scheme depends on government criteria and the policies of individual participating lenders. Always seek independent advice from a qualified financial advisor, mortgage broker, or lender before making any property purchase or financial decision.
Frequently Asked Questions
When does the updated 5% Deposit Scheme officially begin?
The updated 5% Deposit Scheme officially expands from 1 October 2025.
What is Lenders Mortgage Insurance (LMI), and how does the 5% Deposit Scheme help buyers avoid it?
Lenders Mortgage Insurance (LMI) is a fee usually required when a home buyer's deposit is under 20%. The 5% Deposit Scheme allows buyers to secure a mortgage with as little as a 5% deposit, with the government guaranteeing up to the remaining 15%, eliminating the need for LMI.
What are some of the key changes being introduced to the 5% Deposit Scheme in October 2025?
Key changes include the removal of income caps, no limits on the number of places available, higher property price caps, support for single parents with a 2% deposit option, and expanded eligible home types.
