The recent expansion of the Australian Government’s 5% Deposit Scheme has created a huge buzz, and rightly so! It’s a fantastic opportunity for first home buyers. However, with all the excitement comes a lot of chatter, and unfortunately, a lot of misinformation.
As home loan experts, we’ve heard it all. These myths can be confusing and might even discourage you from pursuing your dream of homeownership. Today, we’re setting the record straight. Let’s bust five of the most common myths about the 5% Deposit Scheme.
Myth 1: “I probably earn too much to be eligible.”
BUSTED! This is perhaps the biggest and most important change. As of October 1, 2025, the income caps for the 5% Deposit Scheme have been completely removed. It doesn’t matter if you’re a high-income earner; if you meet the other criteria (like being a first home buyer), you can now apply. This opens the door to a whole new group of people who were previously locked out.
Myth 2: “It’s impossible to get a spot; they run out instantly.”
BUSTED! This used to be a major source of stress. The scheme previously had a limited number of places available each financial year, and they were snapped up quickly. Not anymore. The government has removed the cap on the number of places. This means there’s no need to rush or worry about missing out on a spot.
Myth 3: “The price caps are so low, I can only buy a tiny apartment in the middle of nowhere.”
BUSTED! The government has significantly increased the property price caps to reflect the reality of today’s market. For example, in Sydney, the cap has been lifted from $900,000 to $1,500,000. In Melbourne, it’s up to $950,000, and in Brisbane, it’s $1,000,000. These new caps give you far more flexibility to find a home that genuinely suits your needs and lifestyle, whether it’s an apartment, a townhouse, or a house and land package.
Myth 4: “I need to have a perfect credit history and zero debt.”
BUSTED! While a good credit history is certainly helpful, you don’t need to be perfect. Lenders will look at your overall financial situation, including your income, expenses, and existing debts. The key is demonstrating that you have a solid savings history (for the 5% deposit) and the capacity to comfortably repay the loan. At Sanford Finance, we specialize in finding lenders who can work with a variety of financial situations.
Myth 5: “I can just go to my bank. I don’t need a mortgage broker.”
BUSTED! While you can go directly to a bank, you’re limiting your options. Your bank can only offer you their own products. An independent mortgage broker, like Sanford Finance, works with a wide panel of lenders (we have over 40!).
Here’s why that matters, especially with this scheme:
- Not all lenders are participating in the scheme. We know exactly which ones are.
- Different lenders have different credit policies. We can match you with the lender most likely to approve your application.
- We do the legwork for you. We handle the paperwork and the negotiations, saving you time, stress, and potentially money.
Don’t let myths and misunderstandings stand between you and your first home. The expanded 5% Deposit Scheme is a powerful opportunity, and with the right guidance, you can make it work for you.
Have more questions? Ready to find out if you qualify? Talk to the experts at Sanford Finance today! We’re here to give you the facts and help you on your journey to homeownership.
