Beat the 10-year wait to save a deposit

Buying your first home is an exciting milestone. And there is a way to get into the market sooner. We reveal the smart strategy first home buyers are tapping into.

There’s nothing quite like the feeling of buying your first home.

It’s not just about buying a place to live. It’s a sign you’ve achieved a massive personal goal.

That same feel-good vibe is shared by tens of thousands of first homeowners every year.

Over the 12 months to October 2025, more than 145,000 first home buyers joined the ranks of Australian homeowners.¹

Of course, it’s not always easy, or quick, saving a deposit.

Research firm Cotality says it now takes over a decade to save a standard 20% deposit in major capital cities including Sydney, Adelaide, Brisbane and Perth.²

Who has that sort of time to wait?

So, how are all those first home buyers getting into the market?

The answer lies in a clever strategy.

Buy with a 5% Deposit and Pay Zero LMI

Plenty of first home buyers are bypassing a 20% deposit and getting into a place of their own sooner, thanks to the Australian Government’s 5% Deposit Scheme.

Let’s take a look at how it works.

For context, many lenders allow first home buyers to purchase with a smaller deposit.

The catch is that when your deposit is less than 20%, you’ll typically need to pay lenders mortgage insurance (LMI), a type of insurance that protects the lender, not the borrower.

And LMI is not cheap. The one-off premium can add thousands of dollars to the upfront cost of buying a home.

That’s where the Australian Government’s 5% Deposit Scheme can make a real difference.

Under the scheme, eligible first home buyers need a minimum deposit of just 5%, while eligible single parents and legal guardians may only need a 2% deposit (plus funds to cover other upfront costs such as legal fees and pre-purchase inspections).

The federal government then guarantees part of the loan, allowing eligible buyers to avoid paying LMI.

This means buyers can enter the market sooner without the added cost of LMI. It may also allow buyers to benefit from property value growth earlier and start building equity sooner.

More than 300,000 first home buyers have used the scheme since it commenced in 2020.³

Today, around one in three first home buyers rely on the Australian Government’s 5% Deposit Scheme to help them get into the market.

Who Is Eligible for the Australian Government 5% Deposit Scheme?

In October 2025, the Australian Government expanded the scheme.

There are now no personal income limits and no waitlists.

However, property price caps still apply and vary depending on where you are purchasing.

Talk to our Mortgage Specialists to find out whether you’re eligible for the Australian Government 5% Deposit Scheme.

Community First Is Helping First Home Buyers

Not all lenders participate in the Australian Government’s 5% Deposit Scheme.

That’s why it’s important to talk to us.

We’ve long been committed to helping first home buyers achieve their goals. We can help eligible first home buyers purchase with just a 5% deposit, or a 2% deposit for eligible single parents and legal guardians, with zero LMI.

References
1. Australian Bureau of Statistics, Lending Indicators, September Quarter 2025.
2. Cotality, Australia’s Housing Affordability Hits New Lows.
3. Housing Australia, Expanded Australian Government 5% Deposit Scheme Support.