5% deposit scheme for first homebuyers now underway

The expanded First Homebuyer Guarantee has officially begun, giving Australians looking to buy their first home a new opportunity. From October, first-time buyers can purchase a property with just a 5% deposit.

This scheme allows buyers to avoid lenders’ mortgage insurance (LMI), which can be a significant upfront cost. The government covers the remaining deposit if a buyer defaults, making it easier for more people to step onto the property ladder sooner.

Previously, eligibility was limited by income and property price caps. These restrictions have now been lifted: – Sydney: up to $1.5 million – Melbourne: up to $950,000 – Brisbane: up to $1 million

Officials estimate that the expansion could help around 20,000 additional buyers secure homes in the first year. By shortening the time needed to save a deposit, participants may also save significantly on rent. The scheme is expected to have only a minor impact on property prices, projected at roughly 0.5% over six years.

The 5% deposit scheme now provides an accessible path to homeownership with lower upfront costs. First-time buyers can enter the property market earlier and with fewer financial barriers.

If you’re considering buying your first home, BTMH is ready to help you plan the tax side with confidence.