Buying your first home with a small deposit might feel impossible, especially when you’re juggling rent, bills, and everyday life. But the good news? You don’t always need 20%. Thanks to several government-backed low-deposit schemes may help eligible buyers enter the market sooner, depending on individual circumstances.
Let’s break down how.
5% Deposit First Home Scheme: The First Home Guarantee
Saving a massive deposit is one of the biggest challenges first-home buyers face, but you don’t have to wait forever. With the First Home Guarantee, eligible buyers can purchase a home with just 5% deposit, and avoid Lenders Mortgage Insurance (LMI), which can be a significant cost depending on the loan size and circumstances.
Here’s how it works:
- You provide a 5% deposit.
- The government guarantees the remaining 15%.
- Your lender waives LMI.
- You must live in the property and meet income and property price caps.
This scheme is federally run and places are limited, so it’s helpful to check availability early in your planning.
Buying Regional? There’s a Guarantee for That Too
If you’re planning to buy outside the major cities, the Regional First Home Buyer Guarantee offers the same perks as the First Home Guarantee, but is reserved for regional areas.
To qualify, you’ll need to have lived in the region (or nearby) for at least 12 months, and meet similar income, deposit, and price cap criteria.
For Single Parents: The Family Home Guarantee (2% Deposit)
For eligible single parents, the Family Home Guarantee allows purchase with as little as a 2% deposit.
- You don’t need to be a first-home buyer (next-home buyers may qualify)
- Income cap: $125,000
- You must live in the home
This scheme may assist eligible single-parent families who are working toward homeownership. Be sure to keep in mind, that where the deposit is lower, the loan amount is higher, and saving for a 2% deposit may be one thing; can you afford the repayments?
Coming Soon: Help to Buy (Shared Equity Scheme)
Another scheme worth watching is Help to Buy. It’s still rolling out, but here’s the gist:
- The government contributes up to 40% of the home’s purchase price (30% for existing homes).
- You contribute as little as 2% deposit.
- The government owns that portion of the equity.
This shared-ownership model can reduce the loan amount required. Eligibility and outcomes depend on individual circumstances.
Quick Heads-Up: Limited Spots & Strict Rules
These schemes can offer meaningful assistance to eligible buyers, but they aren’t unlimited. Places can fill quickly, and you’ll need to go through approved lenders, meet income thresholds, and stay within property value caps. Not sure where you stand? That’s where a bit of guidance goes a long way.
You may be closer than you think; understanding the options available can help you plan your next steps
Getting into your first home with a small deposit is possible, and these government schemes could be the boost you need. But understanding the eligibility, rules, and application process can get overwhelming fast.
That’s where we’ve got your back.
Download the free First Home Buyer e-book, packed with everything you need to know about low-deposit options, grants, checklists, budgeting tools, and step-by-step guidance from saving to settlement (and beyond). It's a helpful resource to guide you through low-deposit options and home-buying steps.
Grab your copy now and take that next step. Your first home might be closer than you think.
