5% Deposit Scheme

The Australian Government 5% Deposit Scheme Explained

The Australian Government 5% Deposit Scheme is one of the most significant changes to home ownership support in recent years. Formerly known as the Home Guarantee Scheme, it was renamed and expanded on 1 October 2025 and is now administered by Housing Australia on behalf of the Australian Government. At Double Bay Mortgage Broker, we help residents in Double Bay understand exactly what this scheme means for them and whether they may be eligible to use it.

What the Scheme Does

Under the 5% Deposit Scheme, Housing Australia provides a guarantee to a participating lender covering up to 15% of the property value for eligible first home buyers. This means an eligible buyer can purchase a home with a minimum deposit of just 5% of the property value without paying Lenders Mortgage Insurance (LMI). LMI is a cost that lenders typically require when a borrower has less than a 20% deposit, and it can add tens of thousands of dollars to the cost of buying a home. The government backed guarantee effectively replaces that requirement, which can make a real difference to how much you need to save before entering the market.

For eligible single parents and legal guardians, the scheme goes even further. A 2% deposit home loan is available under the same framework, with Housing Australia guaranteeing up to 18% of the property value. This recognises the additional financial pressures that single-parent households often face when trying to purchase a home.

No Income Cap and No Place Limits

One of the most notable changes introduced on 1 October 2025 is the removal of income caps. Prior to this date, the scheme applied individual income thresholds of $125,000 for single applicants and $200,000 for joint applicants, and there was an annual cap of 35,000 places. Under the current rules, there are no income caps and no limits on the number of guarantees available. This opens the 5% Deposit Scheme to a much broader group of buyers than before.

HGS Eligibility Requirements

HGS eligibility requires applicants to be Australian citizens or permanent residents aged 18 years or over. For the first home buyer component, applicants must not have owned property or land in Australia in the prior 10 years, measured from the date of sale of a previous property to the date of entering a new loan agreement. Single parent or legal guardian applicants do not need to be first home buyers, but they must not own or hold a beneficial interest in any other property at the time their new home settles.

The property must be used as the buyer's principal place of residence. Investment properties are not eligible. The loan must require regular principal and interest repayments with a loan term of up to 30 years, plus up to three years for construction of a new home.

Property Price Caps

Property price caps apply under the scheme and vary by location. For New South Wales, including Sydney and regional centres, the cap is $1,500,000 from 1 October 2025. Both the purchase price and the lender's assessed property value must be at or below the applicable cap. For house and land package scheme purchases involving separate land and construction contracts, the combined cost must also remain within the cap. Double Bay Mortgage Broker can help you check whether the property you are considering falls within the relevant price cap for your postcode.

Eligible Property Types

Eligible properties include existing homes, newly built homes purchased as a house and land package, off-the-plan purchases, and vacant land with a signed building contract. Applications must be made through one of the HGS participating lenders. As of 2026, the panel includes 31 lenders, comprising three major banks and 28 non-major lenders, with Housing Australia indicating the panel is being expanded through 2026.

It is also worth noting that the 5% Deposit Scheme cannot be combined with the Australian Government Help to Buy Scheme. If you are weighing up which scheme may be more relevant to your situation, Double Bay Mortgage Broker can walk you through the differences so you have a clear picture before making any decisions. Speak with our team to understand how the Housing Australia guarantee may apply to your circumstances.

The Simple Steps

Initial Consultation

Your journey begins with a conversation about your property goals - whether you're purchasing a home, investing, refinancing, or seeking another type of loan. Our Finance & Mortgage Brokers explain the overall loan application process, assess your financial position, and begin identifying suitable loan options from a wide panel of banks and lenders across Australia.

Financial Assessment

Your broker conducts a detailed review of your finances, including income, expenses, assets, liabilities and savings. They determine your borrowing capacity and explain key terms like loan-to-value ratio (LVR), lenders mortgage insurance (LMI), and any government schemes or discounts you may be eligible for.

Loan Comparison & Selection

With a clear understanding of your financial situation, our Finance & Mortgage Brokers research and compare a range of loan options. These may include fixed or variable interest rate loans, products with offset accounts, or flexible repayment features. Our brokers help you weigh the pros and cons of each loan, ensuring you choose the one that aligns best with your needs and preferences.

Loan Pre-Approval

Securing loan pre-approval provides a clear idea of how much you can borrow and strengthens your position in the property market. Your broker prepares and submits the required documents - such as payslips, tax returns, and bank statements - to the lender for assessment. Pre-approval also gives you confidence to make offers when you find the right property.

Formal Loan Application

Once you've chosen your preferred loan, your broker completes and submits the formal application to the lender. They manage all required documentation, respond to any queries from the lender, and keep you informed throughout the process to avoid unnecessary delays.

Loan Approval & Settlement Preparation

After your loan is formally approved, our brokers review the loan agreement with you and confirm that all terms - such as interest rate, fees, and repayment schedule - are clear and understood. They also help you set up your loan account and arrange any necessary insurance, such as mortgage or home loan protection.

Settlement & Ongoing Support

At settlement, the lender advances the funds and ownership of the property is transferred to you. Our brokers coordinate with your solicitor or conveyancer to ensure everything runs smoothly. After settlement, our Finance & Mortgage Brokers remain available for ongoing support - whether it's managing repayments, exploring refinancing opportunities, or helping with future property plans.

Double Bay Mortgage Broker discussing no LMI home loan options with a first home buyer

Find out more

The removal of income caps and place limits from the 5% Deposit Scheme has changed the conversation around first home buyers in Double Bay significantly. Previously, buyers who earned above the income threshold were locked out of the scheme regardless of how much they had saved or how ready they were to buy. That restriction no longer applies.

For buyers in Double Bay, where property values tend to sit at the higher end of the Sydney market, the increased property price cap of $1,500,000 for New South Wales is particularly relevant. This means more properties in the area may fall within the eligible range than under the previous caps, giving local buyers more options to consider.

Avoiding Lenders Mortgage Insurance (LMI) is one of the most practical benefits of the scheme. LMI is not a small cost. Depending on the loan size and deposit amount, it can run into the tens of thousands of dollars. By using the government backed guarantee under the 5% Deposit Scheme, eligible buyers can direct those funds elsewhere, whether that is toward purchase costs, building savings, or simply retaining a financial buffer after settlement.

For eligible single parents and legal guardians, the no income cap home loan option with a 2% deposit provides a meaningful pathway into home ownership that was not previously available at this scale. Double Bay Mortgage Broker works with clients across a range of family and financial situations, and we take the time to understand your specific circumstances before discussing which options may be worth exploring.

Applications under the 5% Deposit Scheme can only be made through a participating lender. Double Bay Mortgage Broker works with a broad panel of lenders, including those on the HGS participating lenders list, which means we can help you identify lenders that are both eligible under the scheme and suited to your overall borrowing needs. Learn more about getting pre-approval and how we can support you through the process.

Hear From Our Clients

Client Reviews

Nick and the team at Azura Financial exceeded our expectations at every step. Their guidance was clear, their expertise was evident, and they handled every financial detail with care — giving us complete peace of mind throughout the process. We couldn't have asked for a better team by our side. Thank you very much, V&V.

Van Tran

As a founder, getting a mortgage requires a couple more hoops to jump through, which is why I couldn't recommend Nick O'Sullivan and the Azura team more highly. Not only were they able to offer a seamless process, but Nick was also patient with us as we changed our minds about when to buy (over a period of years!). The truth is anyone can approach a bank and get a mortgage, but when things don't go perfectly (e.g. abrupt government changes), that's when you want a pro on your team like Nick.

Shaun Cunningham

As a first home buyer, Carl and the team at Azura were incredibly helpful throughout the whole process. They made everything feel straightforward and were always there to answer any questions along the way. I’ve already recommended them to friends and would highly recommend them to anyone looking to get a mortgage!

sarah ander

Your Questions Answered

Frequently Asked Questions

Why choose Double Bay Mortgage Broker over a broker based elsewhere?

Choosing a local broker means working with someone who genuinely understands the Double Bay area, the types of properties here, and the people who live and invest in this community. We are not a call centre or a faceless online service. We are a local business that takes pride in building real relationships with our clients. When you work with Double Bay Mortgage Broker, you get personalised service from someone who is invested in your outcome. We are accessible, we communicate clearly, and we are here for the long term. Many of our clients come back to us when their circumstances change, and that kind of ongoing relationship is something we value deeply.

Can Double Bay Mortgage Broker help if I am self-employed?

Yes, we work with self-employed clients regularly. Getting a home loan when you are self-employed can be more involved than a standard application because lenders assess income differently for business owners. Some lenders require two years of tax returns, while others offer what are known as low-doc loans, which require less documentation but may come with different conditions. At Double Bay Mortgage Broker, we understand how to present a self-employed application in a way that gives it the strongest possible chance of being assessed fairly. We will take the time to understand how your income works and match you with lenders who are well suited to your type of borrowing situation.

What documents will I need to provide?

The documents required will depend on your individual circumstances, but as a general guide, most lenders will want to see proof of identity, recent payslips or tax returns, bank statements, details of any existing debts or liabilities, and information about the property you are looking to purchase or refinance. If you are self-employed, you may need to provide additional documentation such as business financial statements or BAS statements. At Double Bay Mortgage Broker, we will give you a clear checklist of what is needed for your specific situation so you are not scrambling to pull things together at the last minute. Being organised early can help keep the process on track.

How long does the home loan process take?

The timeline can vary depending on a number of factors, including the lender you go with, the complexity of your application, and how quickly documents are provided. In general, once we have everything we need from you, a straightforward application can take anywhere from a few days to a few weeks to receive formal approval. At Double Bay Mortgage Broker, we work to keep things moving as efficiently as possible and keep you updated along the way. We know that waiting for news on something as important as a home loan can be stressful, so we make it a priority to stay in regular contact and answer your questions promptly.

What is refinancing and how do I know if it is worth looking into?

Refinancing means replacing your existing home loan with a new one, either with your current lender or a different one. People refinance for a number of reasons, including accessing equity in their property, consolidating debts, changing their loan structure, or simply reviewing whether their current loan still suits their needs. At Double Bay Mortgage Broker, we can review your existing loan and compare it against what else is available in the market. We will give you an honest assessment of whether refinancing makes sense for your situation. There are costs involved in refinancing, such as exit fees or application fees, and we will make sure you understand these before making any decisions.

I am a first home buyer. Can Double Bay Mortgage Broker help me?

Absolutely. Buying your first home is one of the biggest financial decisions you will ever make, and it can feel overwhelming when you are not sure where to start. At Double Bay Mortgage Broker, we work with first home buyers regularly and understand the questions and concerns that come with it. We will walk you through the process from start to finish, explain the different loan options available to you, and help you understand what government grants or schemes you may be eligible to apply for, such as the First Home Owner Grant. We want you to feel informed and confident at every stage, not left in the dark.

What types of loans can Double Bay Mortgage Broker help with?

We help clients with a wide range of lending needs. This includes home loans for owner-occupiers, investment property loans, refinancing existing loans, construction loans, and loans for self-employed borrowers. We also assist with commercial finance and asset finance depending on your situation. Whether you are buying your first home in Double Bay, looking to grow a property portfolio, or wanting to review your current loan to see if there is a more suitable option out there, we are here to help. Every client has a different set of circumstances, and we take the time to understand yours before recommending any course of action.

How much does it cost to use Double Bay Mortgage Broker?

In most cases, our service comes at no direct cost to you. Mortgage brokers in Australia are typically paid a commission by the lender once a loan settles. This means you can access our knowledge and support without paying out of pocket. We are upfront about how we are paid and will always explain this to you clearly before we get started. There are some situations where a fee may apply, and if that is the case, we will let you know well in advance so there are no surprises. Transparency is something we take seriously at Double Bay Mortgage Broker.

Why should I use a mortgage broker instead of going directly to my bank?

When you go directly to your bank, you only see what that one lender has to offer. A mortgage broker like Double Bay Mortgage Broker has access to a broad panel of lenders, which means we can present you with a wider range of options. Your bank is focused on selling its own products, whereas we are focused on finding the right fit for your circumstances. We also know how different lenders assess applications, which means we can help you put your best foot forward. For residents in Double Bay, having someone local who understands the property market in this area can make a real difference.

What does a mortgage broker actually do?

A mortgage broker acts as the go-between for you and a range of lenders. Rather than you having to approach each bank or lender on your own, a mortgage broker does the legwork for you. At Double Bay Mortgage Broker, we look at your financial situation, understand what you are trying to achieve, and then search through a wide panel of lenders to find options that suit your needs. We handle the paperwork, liaise with lenders on your behalf, and guide you through each step of the process. It is our job to make sure you understand what you are signing up for before you commit to anything.

5% Deposit Scheme in Double Bay

Buy Your First Home With Just a 5% Deposit in Double Bay