The Australian Government 5% Deposit Scheme, formerly called the Home Guarantee Scheme, is a government guarantee that can help eligible buyers get an owner-occupier home loan with a smaller deposit and without paying lenders mortgage insurance (LMI).

From 1 October 2025, the official scheme pages say there are no income caps and no place limits or waitlists. First home buyers need a minimum 5% deposit. Single parents and legal guardians may be able to use a minimum 2% deposit. You apply through a participating lender, not directly to Housing Australia.

This explainer sets out the current eligibility rules, the location price caps published on firsthomebuyers.gov.au, and how the scheme differs from Help to Buy, first home owner grants and the First Home Super Saver Scheme. It sits with the Never Lose Interest guides to how much deposit you need, lenders mortgage insurance and the first home buyer checklist.

This is general information only. It is not personal advice, and it is not an offer of a loan or a guarantee. Even if you meet the scheme rules, a lender still has to approve the loan.

What does the scheme actually do?

It does not give you a grant, and it does not pay part of the purchase price. The Australian Government gives a guarantee to your lender so the lender can accept a smaller deposit without charging LMI.

You still borrow the rest of the purchase price, and you are responsible for the loan, interest, fees and all ongoing costs. If you stop meeting the scheme rules, for example if you no longer live in the home as an owner-occupier, the guarantee may end and the lender may require you to pay LMI or other costs.

The guarantee is therefore a way to reduce the cash you need upfront. It is not a subsidy that shrinks the loan. A smaller deposit still means a larger loan, and a larger loan costs more interest over time. Use the mortgage repayment calculator and the borrowing power calculator to look at the ongoing cost, not only the deposit.

Who is eligible?

The firsthomebuyers.gov.au first home buyer page lists these criteria. You also have to meet the participating lender's credit policy.

  • you are an Australian citizen or permanent resident, and at least 18 years old
  • you have saved a minimum deposit of 5%, or 2% if you are applying as a single parent or legal guardian under that part of the scheme
  • you are a first home buyer, or you have not owned a property or land in Australia in the last 10 years
  • you are buying a home in Australia priced at or below the location's price cap
  • you plan to live in the home as an owner-occupier (investment properties are not eligible)
  • you are applying for an owner-occupier loan with principal and interest repayments from a participating lender, for a term of up to 30 years (plus up to three years to build a new home)
  • you are applying on your own, or jointly with one other person (a partner, friend or family member)

A 5% or 2% deposit is a scheme minimum, not a promise that a lender will accept that figure. Lenders still assess income, expenses, existing debts and credit history. See how much deposit you need.

The scheme can be used for a wide range of home types, as long as the price stays within the cap: new or existing houses, townhouses, apartments, house and land packages, off-the-plan purchases, or vacant land with a building contract.

What are the price caps?

Both the purchase price and the home's value, as assessed by the participating lender, must be at or below the cap for that location. If you are buying vacant land and building under separate contracts, the land price plus build costs must also come in under the cap.

The table below is from the official property price caps page on firsthomebuyers.gov.au, retrieved on 15 November 2026. Caps can change, some suburbs sit in more than one postcode, and the official postcode search is only a guide. Confirm the cap with your participating lender for any home you are considering.

State or territory Capital city and regional centres Other areas
New South Wales $1,500,000 $800,000
Victoria $950,000 $650,000
Queensland $1,000,000 $700,000
Western Australia $850,000 $600,000
South Australia $900,000 $500,000
Tasmania $700,000 $550,000
Australian Capital Territory $1,000,000 $1,000,000
Northern Territory, capital city $750,000 n/a
Northern Territory, rest of Territory n/a $600,000
Jervis Bay Territory and Norfolk Island n/a $550,000
Christmas Island and Cocos (Keeling) Islands n/a $400,000

The official regional centres on that page are: in New South Wales, the Central Coast, Coffs Harbour-Grafton, Illawarra, Mid North Coast, Richmond-Tweed, and Newcastle and Lake Macquarie; in Victoria, Geelong; and in Queensland, the Gold Coast and Sunshine Coast.

These caps are not the same as the Help to Buy caps. In particular, Help to Buy's New South Wales capital city and regional centre cap, and its Northern Territory cap, were lower than the 5% Deposit Scheme caps on the same date. Use the table that belongs to the scheme you are applying for.

A simple deposit comparison

Take a home with a purchase price of $800,000 in a location where that price is under the cap, and ignore other buying costs for a moment.

  • A 20% deposit would be $160,000. Many lenders would then treat the loan-to-value ratio as 80%, which is the usual point at which lenders mortgage insurance is not required.
  • A 5% deposit would be $40,000. Without a guarantee, a lender would often require LMI on a 95% loan. Under this scheme, the official pages say there is no LMI.
  • A 2% deposit, where the single parent or legal guardian rules apply, would be $16,000.

The lower deposit gets you to a contract sooner, but the loan is larger. On an $800,000 price, the difference between a 5% and a 20% deposit is $120,000 more to borrow. Stamp duty, legal fees, inspections, moving costs and insurance still have to be paid, and they are not covered by the guarantee. Use the stamp duty calculator for a duty estimate in your state or territory.

How do I apply?

You cannot apply directly to Housing Australia. The official steps are:

  1. Check eligibility with the scheme's online tool, and read the Information Guide (there is a separate guide for single parents or legal guardians).
  2. Speak to a participating lender. The lender assesses you, explains the loan options, and lodges the application. You will need identity details, proof of citizenship or residency, and a completed Home Buyer Declaration, among other documents.
  3. Once you are pre-approved, you have 90 days to find a home and sign a contract of sale. Confirm the price cap for that property with the lender.
  4. The lender manages final approvals. After settlement, you move in and need to keep meeting the owner-occupier and other ongoing rules.

A list of participating lenders is published on firsthomebuyers.gov.au. Shopping around still matters: the guarantee is the same idea at each participating lender, but the loan rate, fees and credit policy are not.

How is this different from Help to Buy and other first-home help?

The 5% Deposit Scheme is a guarantee. Help to Buy is a shared-equity scheme: the government contributes part of the purchase price, up to 30% for an existing home or 40% for a new home, in return for a share of the property. Help to Buy still has income caps and an annual places limit. The two schemes also have different citizenship rules and different price caps.

First home owner grants are state and territory payments, usually for new homes, and they are assessed separately. Stamp duty concessions are also separate. The First Home Super Saver Scheme is a way to save part of a deposit in super. None of these automatically replaces the others, and none of them is a substitute for a lender saying yes to the loan.

Frequently asked questions

Is this still called the Home Guarantee Scheme?

The official site now uses Australian Government 5% Deposit Scheme, and says it was formerly known as the Home Guarantee Scheme. Older pages and search results may still use the earlier name, or names such as First Home Guarantee. Check the date on any page you read. Material that still talks about income caps or a fixed number of places is describing the rules before 1 October 2025.

Can I use the scheme to buy an investment property?

No. You must plan to live in the home as an owner-occupier, and you have to keep meeting that obligation if you want the guarantee to continue.

Do I need to be a first home buyer?

Not always. The official rule is that you are a first home buyer, or you have not owned a property or land in Australia in the last 10 years. Other conditions still apply, including the deposit, citizenship or permanent residency, and the price cap.

Is there an income cap?

The official scheme pages, as they stood in November 2026, say that from 1 October 2025 there are no income caps. Your lender can still decline a loan if it does not think you can service it.

General information warning

This article is general information only. It is not personal financial product advice, and it is not a recommendation to use the 5% Deposit Scheme or to take out a particular loan. It does not take into account your objectives, financial situation or needs. Eligibility, price caps and lender policies can change, and a scheme place is not a loan approval. Consider speaking with a licensed adviser or your participating lender before you apply, and confirm the current rules on firsthomebuyers.gov.au.

Sources

Last reviewed: November 2026.