The idea of buying your first home in Australia probably makes you feel equal parts excited and terrified. But with property prices rising faster than your savings, it can feel like the dream keeps edging away.
At Remitly, we know how important it is to put down roots in a country that’s starting to feel like yours. That’s why we’ve put together this guide to explain how the Australian Government 5% Deposit Scheme is giving first-time buyers a real shot at that dream.
What is the Australian Government 5% Deposit Scheme?
Saving for a house deposit in Australia can feel like trying to fill a bucket that keeps springing leaks: rent, bills, groceries, life. That’s exactly why the Australian Government’s 5% Deposit Scheme, previously known as the First Home Guarantee, was created: to help first-time buyers get into their own home sooner.
A simple explanation
The Australian Government 5% Deposit Scheme lets eligible buyers purchase a home with as little as a 5% deposit (or 2% for single parents) without paying Lenders Mortgage Insurance, which can otherwise add tens of thousands of dollars to your costs.
Instead, the government steps in as a guarantor, backing up to 15% of the loan for first-home buyers, or 18% for single parents. This gives lenders the confidence to offer you a mortgage covering up to 95–98% of the property’s value, while you save time and money on the way to owning your first home.
Why this matters for first-time buyers
For first-time buyers, especially those balancing rent, study, or family life, the Australian Government 5% Deposit Scheme can turn a distant dream into a realistic goal. It removes one of the biggest barriers to home ownership, the massive upfront deposit, and replaces it with something more achievable.
The scheme cuts the average time it takes to save for a deposit from around 10.5 years to just two or three. Over 125,000 first-home buyer loans were issued in the year to March 2025, a clear sign that more Australians are turning the dream of home ownership into reality.
How much can you actually save?
The 5% Deposit Scheme turns home ownership from a distant dream into something actually within reach.
For example, if you’re buying a home worth $700,000, a traditional 20% deposit would mean $140,000 upfront. Under the Australian Government 5% Deposit Scheme, a 5% deposit means just $35,000. That’s not just numbers on a spreadsheet, it’s the difference between “one day” and “I’ve got an inspection this weekend.”
Are you eligible for the scheme?
If you’ve been dreaming of buying your first home in Australia, there’s good news. As of 1 October 2025, the 5% Deposit Scheme just got a major glow-up, opening it up to more people and removing some of the biggest barriers.
What’s new from October 2025
From now on, there are no limits on places and no income caps, meaning every eligible first-home buyer can apply. Whether you’re earning a little or a lot, if you’ve saved a 5% deposit, you’re in the game.
Property price caps have also gone up to reflect the market. In Sydney, you can now buy up to $1.5 million, Melbourne up to $950,000, and Brisbane up to $1 million. That means many more homes, including apartments, townhouses, and family houses, now qualify.
The core eligibility rules
The basics are still the same. You’ll need to:
- Be an Australian citizen aged 18 or over (permanent residents may still need to check alternative programs).
- Have at least a 5% deposit made up of savings.
- Be a first-home buyer who has never owned property in Australia.
- Plan to live in the property, not rent it out.
The regional version of the scheme has also been rolled into the main scheme, so it’s now one process wherever you buy.
How to apply
You can apply through one of 30+ participating lenders, including big banks and local ones. Just check your eligibility using the Housing Australia tool, chat to your chosen lender or broker, and start looking for your new home.
With more flexibility, higher price caps, and no waiting list, the 2025 update makes this the best time yet to take your first step onto the property ladder.
How does the 5% Deposit Scheme actually work?
The scheme is designed to make home ownership feel a little more achievable, even if you haven’t been saving for a decade.
Step 1: Check your eligibility
Before applying, make sure you tick the basics: you’ll need to be an Australian citizen, 18 or older, and plan to live in the home yourself. As of October 2025, there are no income caps and no limits on places, so if you’ve saved at least a 5% deposit, you’re good to go.
Step 2: Chat to a lender
You can’t apply directly through the government. Instead, participating lenders now handle applications.
They’ll check your eligibility, help with pre-approval, and submit your application to Housing Australia. Having a lender on your side makes the process far less intimidating, especially if you’re buying in Australia for the first time.
Step 3: Find your home
Once approved, it’s house-hunting time—arguably the fun part. Thanks to the new, higher price caps, you’ll have more options than ever. With regional price caps also rising, there’s more flexibility to choose the home that fits your lifestyle, whether that’s a city apartment, a coastal townhouse, or a place in the suburbs with a backyard.
What kind of property can you buy?
Once you’ve qualified for the 5% Deposit Scheme, the next big questions are what you can actually buy and how to make the most of the scheme.
Choose what suits your lifestyle (and budget)
The scheme covers a wide range of property types, from established homes and townhouses to house-and-land packages and off-the-plan apartments. What matters most is that the property is residential and owner-occupied.
If you’re new to Australia, consider starting with something manageable: a smaller home, a unit in a growing suburb, or a townhouse that doesn’t demand endless maintenance. These tend to be more affordable and can grow in value over time, especially in up-and-coming areas.
Look beyond the city centre
While inner-city homes often get the spotlight, suburbs and regional hubs are where many first-home buyers find better value. Hotspots like Dandenong, Brunswick–Coburg, and Moreland in Melbourne, North Lakes and Forest Lake in Brisbane, and Parramatta and Liverpool in Sydney are attracting first-time buyers looking for a balance between price, lifestyle, and access to public transport.
Exploring just 20–30 minutes outside a city’s Central Business District can sometimes mean tens of thousands of dollars in savings and a less stressful buying process.
Think long-term, not just entry-level
Government schemes like this one make it easier to buy your first home, but it’s worth thinking about how that property fits into your longer-term goals. A two-bedroom apartment might be perfect now, but will it still suit you in five years? Could you rent out a room later, or sell it easily if your circumstances change?
Talking to a mortgage broker or financial adviser who understands the Australian market, especially as a new citizen, can help you weigh your options confidently before signing on the dotted line.
Other home-buying schemes worth knowing about
The Australian Government 5% Deposit Scheme is one of the most popular ways to get into the housing market, but it’s not the only helping hand out there.
Family Home Guarantee
For single parents, trying to save for a home while covering rent, bills, and everything in between can feel impossible, but the Family Home Guarantee is here to make it a little easier.
Run by Housing Australia, the program helps eligible single parents or legal guardians buy a home with just a 2% deposit. The government then guarantees up to 18% of the loan.
To qualify, you’ll need to be an Australian citizen or permanent resident, 18 or older, earning under $125,000 a year, and planning to live in the home. Each year, 5,000 places are available for eligible homes within local price caps.
First Home Super Saver Scheme
If you’re someone who loves a smart savings strategy, the First Home Super Saver Scheme might be right up your alley. It lets you grow your deposit inside your superannuation fund, where your contributions are taxed at a lower rate, meaning your savings can grow faster than they would in a standard bank account.
You can later withdraw up to $50,000 of those voluntary contributions to put toward your deposit. It’s a clever way to make your money work harder for you.
Tips to boost your chances of approval
Getting approved for the Australian Government 5% Deposit Scheme can sound stressful, but it’s really about preparation and timing. A little organisation goes a long way.
Get organised early
Start by pulling together your key documents like payslips, ID, bank statements, and tax returns so everything’s ready when you apply. Being prepared saves you the last-minute scramble and helps lenders see you mean business.
Show consistent savings
Lenders like to see steady saving habits, not one-off windfalls. Even small, regular deposits show financial discipline and build trust.
Setting up an automatic transfer from your pay makes it effortless, and it looks great on your application. Over time, this consistency can also help you build confidence in your own financial habits.
Tidy up your debt
If you can, pay down credit cards or personal loans before applying. It’s not about being debt-free, just proving you can manage money responsibly. Less debt also means more room in your budget for mortgage repayments. Even trimming your balance by a few hundred dollars can make your application stronger.
Get the right advice
If the process feels confusing, talk to a mortgage broker familiar with the scheme. They can explain what lenders are looking for, help you find the right one, and guide you through the paperwork. Having expert guidance on your side can take a lot of stress out of the process.
What expats and immigrants should know
For newcomers to Australia, buying a home is a milestone that makes you feel like you truly belong.
Permanent residents and eligibility
At the moment, the scheme is open only to Australian citizens, not permanent residents. But don’t be discouraged, each state and territory has its own first-home grants and stamp duty concessions, and many of these welcome permanent residents too. It’s worth checking your local government’s website to see what support you can tap into.
Foreign income and overseas savings
If you’re earning overseas or planning to use savings from another country, most lenders will consider it, as long as it’s clearly documented. Translated payslips or bank statements are often enough.
When transferring money from abroad, keep a paper trail to show where the funds came from. Using a secure service like Remitly can make the process quick, transparent, and stress-free.
A strong credit history goes a long way in helping lenders say “yes.” If you’re new to Australia, start small: open a local bank account, pay bills on time, and stay consistent with your income. Over time, these little habits build trust with lenders and can even help you score better mortgage rates when it’s time to buy.
Take your first step toward home ownership
The Australian Government 5% Deposit Scheme could turn that “one day” dream of owning a home in Australia into something real. By lowering the deposit to just 5% and skipping the cost of Lenders Mortgage Insurance, it helps first-time buyers get their foot in the door sooner and save thousands in the process. For immigrants and expats building a life here, it means feeling at home in the place you’ve chosen to build your future.
FAQs
Can permanent residents apply for the Australian Government 5% Deposit Scheme?
No. The scheme is open only to Australian citizens. However, permanent residents may be eligible for other programs.
Can couples apply together?
Yes, provided both applicants meet the eligibility criteria. Couples should apply jointly for the same property and loan.
How long does the approval process take?
Approval times vary by lender but typically range from one to four weeks, depending on documentation and demand.
Can I combine this scheme with other grants?
Yes. Buyers can combine the scheme with state-level grants, stamp duty concessions, and the First Home Super Saver Scheme.
Can I use a remittance or gifted funds for my deposit?
Yes, but lenders usually require evidence of where the funds came from. Keeping clear transfer records helps ensure compliance.
Can I use the scheme for an investment property?
No. It applies only to homes that will be used as a primary residence.