The dream of owning your own home in Australia just became a whole lot more achievable. In a move that has been celebrated by aspiring homeowners across the country, the Australian Government has significantly expanded its 5% Deposit Scheme as of October 1, 2025. This isn’t just a minor tweak; it’s a fundamental game-changer that opens the door to property ownership for thousands.
At Sanford Finance, we’ve been helping Australians navigate the path to homeownership since 2006. We’ve seen many government initiatives come and go, but this is one of the most significant we’ve encountered. As your trusted mortgage experts, we’ve created this comprehensive guide to walk you through everything you need to know.
What is the 5% Deposit Scheme?
In a nutshell, the scheme allows eligible first home buyers to purchase a home with a deposit of as little as 5% of the property’s value. The government then guarantees a portion of the loan, which means you don’t have to pay costly Lenders Mortgage Insurance (LMI) – a fee that can often run into tens of thousands of dollars.
For single parents or legal guardians, the deposit requirement is even lower, at just 2%.
The Game-Changing New Rules
So, what’s all the excitement about? The recent expansion has removed some of the biggest hurdles that previously held people back.
- No More Income Caps: That’s right. Previously, if you earned over a certain threshold, you were ineligible. Now, your income level no longer disqualifies you from accessing the scheme.
- Unlimited Places: The scheme used to have a limited number of spots available each year, creating a frantic rush. Now, there is no cap on the number of applicants. If you’re eligible, you can apply.
- Higher Property Price Caps: The government has increased the maximum property value you can purchase under the scheme, reflecting the real-world state of the property market. In Sydney, for example, the cap has been raised from $900,000 to a much more realistic $1.5 million.
What are the Benefits?
The advantages are clear:
- Get into the market sooner: Saving a 20% deposit can take years. This scheme dramatically shortens that timeline.
- Save thousands on LMI: Waiving the Lenders Mortgage Insurance fee is a massive upfront saving.
- More property choices: The higher price caps give you a wider range of homes to consider.
Are There Any Risks?
It’s important to go in with your eyes open. A smaller deposit means a larger loan. This will result in higher monthly mortgage repayments. It’s crucial to budget carefully and ensure you can comfortably service the loan without falling into “mortgage stress” (where more than 30% of your income goes to your mortgage).
This is where expert advice is invaluable. A good mortgage broker won’t just get you a loan; they’ll help you understand the long-term implications and ensure your financial wellbeing.
How Sanford Finance Can Help You Succeed
Navigating government schemes and home loan applications can be complex. As independent mortgage brokers, we work for you, not the banks. Our job is to make the process simple, clear, and successful.
- •We’re Experts: We specialize in low-deposit loans and have a deep understanding of the 5% Deposit Scheme.
- We Have Options: We have access to a panel of over 40 lenders, so we can find the perfect loan to suit your individual circumstances.
- We Guide You: From checking your eligibility to submitting the application and celebrating at settlement, we’re with you every step of the way.
The Australian dream is alive and well. With this expanded scheme, it might be closer than you think.
Ready to take the next step? Contact Sanford Finance today for a FREE, no-obligation consultation and let’s make your homeownership dream a reality!