Low Deposit Scheme Helps More Buyers Enter

More first-home buyers are entering the property market with smaller deposits, supported by the expanded Federal Government 5% Deposit Scheme.

Around 120,000 first-home buyer households took out a mortgage during the 2026 financial year. The proportion using the government scheme rose from about 25% before its expansion to approximately 50% afterwards.

The expanded program increased property price caps, removed income limits and eliminated place quotas. Eligible buyers can purchase with a deposit of as little as 5% without paying lenders mortgage insurance, potentially bringing home ownership forward by several years.

Saving a traditional 20% deposit can take an average-income household about six years.

The scheme does not remove the need for careful budgeting. A smaller deposit means borrowing more, paying additional interest and beginning with less equity. Buyers must be confident they can manage repayments if rates or household expenses rise.

Government assistance can also add competition for affordable properties, so buyers should avoid stretching beyond a sensible limit simply because they qualify.

Used carefully, however, the scheme provides a practical pathway into ownership. It does not solve the broader affordability challenge, but it can help financially prepared buyers overcome one of the largest barriers to purchasing their first home.