Most first home buyers in Australia can now buy with a 5% deposit and pay no Lenders Mortgage Insurance, through the Australian Government 5% Deposit Scheme. The scheme was previously called the First Home Guarantee, and the version running now is materially more generous than the one most articles still describe: there are no income caps, and no limit on the number of places.

Scheme details on this page were last verified on 18 August 2026. Government programs change — always confirm current rules at the source links below before relying on them.

The 5% deposit scheme, in plain terms

Normally, if you borrow more than 80% of a property’s value, the lender requires Lenders Mortgage Insurance. LMI protects the lender, not you, and on a typical purchase it can cost many thousands of dollars added to your loan. Under the scheme, the government guarantees part of your loan instead, so an eligible buyer with a 5% deposit avoids LMI entirely.

As verified at firsthomebuyers.gov.au:

• Minimum 5% deposit for first home buyers, and minimum 2% for eligible single parents.
• No income caps. Your income still determines what you can borrow through ordinary serviceability assessment, but it no longer disqualifies you from the scheme.
• Unlimited places, no waiting list. The old annual quota is gone.
• Applies to houses, townhouses, units and apartments, new or existing, plus house-and-land packages, off-the-plan, and vacant land with a building contract.
• You must buy through a participating lender, and the property must be your home to live in.

Property price caps, every state and territory

There is a cap on what you can buy, set by location. We work with clients across Australia, so here is the full table rather than just our own state:

One detail that catches people out: both the purchase price and the lender’s assessed valuation must sit at or below the cap. A property you buy at $895,000 that the lender values at $910,000 does not qualify. Caps also vary by postcode within a region, so check the official postcode tool rather than assuming.

State help sits on top — and every state does it differently

The 5% deposit scheme is federal and works the same everywhere. Grants and stamp duty concessions are state programs, and they differ a lot: what qualifies, how much, and whether established homes are included at all. Getting this wrong is expensive, so check your own state before you start inspecting.

We deliberately do not reprint each state’s dollar figures here — they change often enough that a stale number on a broker’s website is worse than no number. Tell us where you are buying and we will walk you through what currently applies.

South Australia in detail

SA is where our office is, so this is the one we can set out fully. Two separate state benefits, assessed independently, each with its own application — being approved for one does not grant the other. Verified at RevenueSA:

First Home Owner Grant — up to $15,000

• For new homes only: building a new home, buying one never lived in, an off-the-plan apartment, a substantially renovated home, or a building contract. Buying vacant land by itself does not qualify — entering a building contract can.
• No property value cap for contracts signed on or after 6 June 2024.
• You must live in the home as your principal place of residence for at least six continuous months, and move in within 12 months of completion if building.

Stamp duty relief

• Eligible first home buyers may pay no stamp duty on a new home, or on vacant land they intend to build their home on.
• Not available on established homes. This is the distinction that decides the benefit, and it is worth real money — so it is worth understanding before you fall in love with a property.

The practical consequence: in South Australia, a new build and an established home of the same price are not the same purchase. The new build can attract both the grant and the stamp duty saving. That does not automatically make it the better buy — location, quality and resale matter more over time — but it should be part of the arithmetic.

What you actually need saved

The deposit is not the only cost. Budget for:

• Deposit — 5% under the scheme, otherwise typically 10–20%.
• Stamp duty — unless relief applies.
• Conveyancing and legal fees.
• Building and pest inspection — do not skip this to save a few hundred dollars.
• Lender fees — application, valuation, settlement.
• Council and water rates adjustments at settlement.
• Moving, connections and immediate repairs.

Lenders also want to see genuine savings — deposit accumulated over time rather than appearing suddenly. A gift can usually still work, but it changes how the file is presented.

What decides how much you can borrow

Borrowing capacity is calculated by each lender under its own rules, so the same income produces different answers. The main drivers:

• Income and how stable it looks. Casual, probation and contract income are each treated differently, and lenders disagree on minimum employment periods.
• Existing debts. Credit cards are assessed on the limit, not the balance — an unused $15,000 card reduces what you can borrow. Personal loans and car finance bite hard.
• HECS/HELP. Compulsory repayments are counted as a commitment. It reduces capacity but does not disqualify you.
• Dependants and living expenses. Lenders apply a benchmark and compare it to your declared spending, taking the higher figure.
• The assessment rate. Lenders test you at a rate above the actual rate to check you could cope with increases.

Common questions

Do I still need a 20% deposit?

No. 20% avoids LMI on a standard loan, but the 5% deposit scheme avoids LMI at 5% for eligible buyers. Outside the scheme you can still borrow above 80% — you just pay LMI.

Can I use the scheme and the SA grant together?

They are separate programs with separate criteria, so eligibility for one does not decide the other. Whether both apply depends on your circumstances and the property, particularly whether it is new or established.

Does a HECS debt stop me getting a loan?

No. It reduces borrowing capacity because the repayment counts as an ongoing commitment, but it is not a barrier to approval. Paying it off early is not automatically the best use of savings — run the numbers before deciding.

What is pre-approval, and is it binding?

Pre-approval is a lender’s conditional indication of what it would lend, based on information that has usually been partly verified. It is not a guarantee: it is subject to a satisfactory property valuation and final checks, and it expires. It is still worth having before you bid.

Can I buy with a friend or family member?

Yes, though it changes the assessment and the scheme’s eligibility rules apply to each applicant. It is worth getting legal advice on the ownership structure before you commit.

How long does the process take?

From first conversation to pre-approval is often a couple of weeks if your documents are ready. From accepted offer to settlement is typically 30–60 days depending on the contract.

Where to start

The most useful first step is finding out your real number — what you can borrow, what you will need saved, and which benefits you qualify for. That conversation costs nothing and does not affect your credit file.

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Official sources

• firsthomebuyers.gov.au — the Australian Government 5% Deposit Scheme, eligibility and price caps
• RevenueSA — First Home Owner Grant
• RevenueSA — stamp duty relief for eligible first home buyers

This page is general information only and does not take your objectives, financial situation or needs into account. It is not credit assistance, a credit quote, or legal or taxation advice. Government schemes and lender policies change; confirm current rules with the official sources above. Nothing here is a guarantee of eligibility or approval. Easy Loan Finance is a Credit Representative (CRN 568863) of Beagle Finance Pty Ltd, Australian Credit Licence 383640.