The 5% deposit scheme that’s changing the game for first-home buyers

For years, the dream of owning a home has felt like an ever-receding horizon for many Australians. The biggest hurdle? The formidable 20% deposit, a figure that often grew faster than savings could accrue. But a significant shift is sweeping the property landscape, and it’s enabling thousands of first-home buyers to turn their aspirations into reality, years ahead of schedule.

If you’ve been dreaming of owning your first home, there’s now a faster way to get there. Since October 2025, the Australian Government’s First Home Guarantee scheme has been helping buyers step into the market with as little as a 5% deposit, while completely skipping the hefty cost of Lenders’ Mortgage Insurance (LMI).

It’s a shift that’s already making a visible difference, helping more Australians escape the rental squeeze and start building equity in a home of their own.

A headstart for first-home buyers

Originally set to launch in 2026, the 5% deposit scheme was fast-tracked to October 2025, and that early arrival has proven a welcome surprise. With no income caps, no limit on places, and higher property price thresholds, the scheme removes several of the biggest barriers of owning your first home in Australia.

Eligible buyers can now purchase:

• Sydney: homes up to $1.5 million
• Melbourne: up to $950,000
• Brisbane: up to $1 million
• With increased limits across other capital cities and regional areas too.

Buyers who once faced a decade of saving for a 20% deposit are now entering the market years earlier — and with greater confidence.

“This is one of the most significant boosts to housing accessibility we’ve seen in years,” says Brent Hill, Frasers Property Australia Director of Sales and Marketing.

“By removing the twin hurdles of large deposits and mortgage insurance, the scheme opens the door for more people to make that life-changing first step — especially in quality new communities where long-term value and liveability are front and centre.”

How much faster could you buy?

Take Melbourne, where the median house price rose to around $1,012,000 by December last year. Under traditional rules, a 20% deposit meant saving almost $202,400 — a process that could take up to a decade for many households. Under the new First Home Guarantee scheme, a 5% deposit is just $50,600, potentially getting you into your home seven years sooner.

In Sydney, the savings are even more dramatic. With a median price of over $1.6 million, a 20% deposit once meant more than $320,000 in savings. Now, a 5% deposit of $80,000 can open the same door — a difference of over $240,000.

How to take advantage

If you’re thinking of buying, here’s how to make the most of the new scheme:

1. Check your eligibility

Visit housing.gov.au to confirm you qualify.

2. Talk to your lender early

Many banks and customer-owned lenders are already approved to offer loans under the scheme.

3. Get your 5% deposit ready

Remember to budget for stamp duty and other upfront costs too.

4. Choose a community with long-term value

A trusted developer like Frasers Property offers peace of mind that your home, and your neighbourhood, will stand the test of time.

A clearer path to home ownership

Buying your first home is a major milestone, but it no longer has to feel out of reach. With the 5% Deposit Scheme now in play, more Australians are finding that their home ownership goals are not only achievable but closer than ever.