5% Deposit Scheme opens more doors for first-time buyers 

Exciting news for first home buyers! The Australian Government has fast-tracked the expansion of its 5% Deposit Home Guarantee Scheme – previously known as the Home Guarantee Scheme. Originally scheduled for 2026, the changes officially came into effect on 1 October 2025.

We look at what it can mean for your buying plans – and how you could benefit.

Under the changes, all first home buyers who have saved a minimum 5% deposit will be able to access the Scheme, with no limits on places or income caps. Jocelyn Martin, HIA Managing Director, commented, “Previously the Scheme has been capped at 50,000 new places each year, but [this] announcement will mean there are no caps or income limits, and property prices have been adjusted in line with average house prices in both metropolitan and regional areas.

“This will mean more Australians can access the Scheme and get into housing sooner.¹”

Increased price caps have risen in line with average house prices (see Table 1 below) and will open the door to a wider variety of properties to be purchased through the Australian Government 5% Deposit Scheme. 

Table 1: Property cap changes from 1 October 2025

Source: https://firsthomebuyers.gov.au/australian-government-5-percent-deposit-scheme/property-price-caps  

Shaving years and dollars from your mortgage

For the average first-time homebuyer, accessing the expanded Scheme can help reduce the time needed to save for a deposit and can shave up to tens of thousands of dollars on Lenders Mortgage Insurance².

To put this into perspective, the median home price in Australia is currently $844,000. A 5% deposit on that figure is $42,200 — an amount that, back in 2002, would have covered a full 20% deposit on a median-priced home². This comparison underscores just how significant the changes are today.

In practical terms, the expanded Scheme makes it possible for first home buyers in Brisbane to purchase a home valued at $1 million with a deposit of just $50,000. That could mean potentially shaving up to a decade off the time that it would normally take to save for a deposit. Additionally, they could save around $42,000 in mortgage insurance and contribute as much as $350,000 towards their own loan rather than paying rent².

And it’s not just the capital cities that stand to benefit. Federal Government analysis shows that in Bendigo, a first time buyer could purchase a $600,000 property with just a $30,000 deposit. This could save six years of deposit-saving time, cut out $25,000 in mortgage insurance, and direct $126,000 directly towards a mortgage instead of paying rent².

Looking to buy your first home? Community First Bank, a Participating Lender in the Australian Government 5% Deposit Scheme, can help you secure a loan with just a 5% deposit. Call 1300 13 22 77 (Mon-Fri 8am-8pm, Sat 8am-3pm) or visit any of our stores for more information.

Credit eligibility criteria, terms & conditions, fees & charges apply 

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