Short answer
The First Home Guarantee, now called the Australian Government 5% Deposit Scheme, lets eligible first home buyers buy with a 5% deposit without paying lenders mortgage insurance (LMI). Since 1 October 2025 there are no income caps and no limit on places. In NSW the property price cap is $1.5 million in Sydney and regional centres, and $800,000 elsewhere.
Who's eligible?
To use the 5% Deposit Scheme as a first home buyer, you must:
- be an Australian citizen or permanent resident, aged 18 or over
- be a first home buyer, or not have owned property or land in Australia in the last 10 years
- buy a home to live in yourself (investment properties don't qualify)
- have a deposit of at least 5% of the price
- take a principal-and-interest loan of up to 30 years (plus up to three years to build a new home)
- buy at or below the price cap for the area
There are no income caps and no limit on places, both from 1 October 2025.
What are the price caps?
| 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 | |
| Northern Territory | $750,000 (capital city) | $600,000 |
As at 26 October 2026. Source: Housing Australia. In NSW the regional centres are the Central Coast, Coffs Harbour–Grafton, Illawarra, Mid North Coast, Richmond–Tweed, Newcastle and Lake Macquarie. Some suburbs span postcodes with different caps, so check the exact postcode with the official tool.
How does the guarantee work?
Normally, if your deposit is under 20%, the lender charges lenders mortgage insurance (LMI). Under the scheme, the Government guarantees part of your loan to the lender instead, so you can buy with a 5% deposit and don't pay LMI.
You apply through a participating lender, not directly with the Government. The lender checks your eligibility as part of its normal assessment, so you still need to meet the lender's own lending criteria.
Single parents and legal guardians
Single parents and legal guardians can buy with a deposit of as little as 2%. They don't need to be first home buyers, but they can't own another home or property interest once the new home settles.
Can you combine it with NSW stamp duty relief?
The 5% Deposit Scheme and NSW's First Home Buyers Assistance Scheme are separate schemes with their own rules. If you're eligible for the NSW scheme, you pay no transfer duty on a home up to $800,000 and a reduced rate up to $1 million (or up to $350,000 and $450,000 for vacant land).
What the scheme doesn't do
- It doesn't lower your interest rate. Your rate and loan features come from the lender.
- A smaller deposit means a bigger loan. Borrowing 95% of the price means more interest over the life of the loan than borrowing 80%.
- You must keep living in the home. There are ongoing owner-occupier obligations. If you don't meet them, the lender may require you to pay LMI or other costs.
What are the steps?
- Check your eligibility and the price cap for your postcode.
- Talk to us about participating lenders and how much you may be able to borrow.
- Apply for pre-approval with a participating lender, which assesses you for the scheme as well as the loan.
- Find your home, sign the contract and settle.
How MoneyGenie helps
- Checks your eligibility and the price cap for the suburb you want, before you start making offers.
- Compares participating lenders on our panel for you, not just the one you bank with.
- Works out whether NSW stamp duty relief also applies, so you know your full upfront costs.
Nabita compares options from MoneyGenie's panel of 35+ lenders, tells you upfront which are realistic for your situation, and handles the application with you through to settlement. Our service is generally at no cost to you, as we're paid a commission by the lender, which we disclose to you upfront. Details are in our Credit Guide, available on request. Talk to Nabita: call 040 110 1608 or send an enquiry.
Call 040 110 1608 Send an enquiryLast reviewed by Nabita, mortgage broker, MoneyGenie Finance.
Official sources
Frequently asked questions
Is the First Home Guarantee the same as the 5% Deposit Scheme?
Yes. The First Home Guarantee is now part of the Australian Government 5% Deposit Scheme, which Housing Australia runs. Many people and lenders still use the old name.
Are there income caps for the 5% Deposit Scheme in 2026?
No. Income caps were removed from 1 October 2025, and there's no longer a limit on the number of places.
What's the price cap in Sydney?
$1.5 million for Sydney and the NSW regional centres (Central Coast, Coffs Harbour–Grafton, Illawarra, Mid North Coast, Richmond–Tweed, Newcastle and Lake Macquarie), and $800,000 for the rest of NSW. Check the exact postcode with the official tool.
Can temporary visa holders use it?
No. The scheme is only for Australian citizens and permanent residents. Our guide on buying now or waiting for PR explains the options on a temporary visa.
The rules and figures in this guide were checked against the official sources above on the review date. Government rules and lender policies change, so check your own situation with us or the relevant authority before acting.