How does the 5% deposit First Home Guarantee work?
Under the First Home Guarantee, Housing Australia guarantees up to fifteen per cent of the property value to a participating lender, so you can buy with a five per cent deposit and pay no lenders mortgage insurance. You still borrow ninety-five per cent and still need to service the loan; what you save is the LMI premium, which on a $700,000 purchase at 95 per cent can be $25,000 or more.
From 1 October 2025 the scheme was expanded: the income caps were removed, the annual place limits were removed, and the price caps were lifted (for example $1.5 million in Sydney and $950,000 in Melbourne). You need to be a first home buyer (or not have owned property in the last ten years), an Australian citizen or permanent resident, and live in the home.
The catch is that a five per cent deposit still has to cover stamp duty and costs unless a concession applies, and at 95 per cent LVR your borrowing power, not your deposit, is usually the binding constraint. The check below runs both.
Want the number for your situation? The first home buyer check asks the same questions Joshua would and shows the working.
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Related
How much can I borrow on a $90,000 salary?
A single applicant on $90k with no debts and no dependants typically lands in the $380,000 to $440,000 range, and here is what moves it.
Does HECS affect how much I can borrow for a home loan?
Yes. HECS reduces your take-home pay, and lenders assess take-home pay. Here is how much it costs and what changed in 2025.
Do first home buyers pay stamp duty in NSW?
Not up to $800,000, and a reduced amount up to $1 million. Above that, full duty applies.