2025 Update: What You Need to Know About the 5% Deposit Scheme

If you’ve been keeping an eye on first‑home buyer options — good news. As of 1 October 2025, the 5% Deposit Scheme has had major updates that make it easier than ever for first‑home buyers and single parents / legal guardians to get into a home.

Whether you’ve been saving for a deposit or just starting to think about home ownership — this could be the boost you’ve been waiting for. For a full, detailed breakdown, make sure you watch our video. 

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✅ What’s Changed (Oct 1 2025)

Thanks to the most recent expansion of the scheme, the following apply now: Housing Australia+2Housing Australia+2

• Unlimited places — no cap on the number of participants. No more waiting lists or quotas. Housing Australia+1

• No income caps — eligibility is no longer restricted by income. First Home Buyers+1

• Higher property price caps across jurisdictions. The scheme is now adjusted to reflect current market conditions. Housing Australia+1

• Lower deposit for single parents/legal guardians — from 2% under the relevant stream (instead of the usual 5%). Housing Australia+1

• No lenders mortgage insurance (LMI) required — because the government provides a guarantee to the lender. CommBank+1

• Wide property eligibility — houses, townhouses, units, off‑the‑plan, house/land packages or building on vacant land are allowed as long as the property meets the scheme’s caps and conditions. First Home Buyers+1

In short: if you have saved a 5% deposit (or 2% for eligible single parents), and plan to live in the home, you could now access the scheme regardless of income — and you don’t have to worry about waiting lists or mortgage insurance.

📝 What This Means for Buyers

• You might be able to enter the market much sooner, without years spent saving for a large deposit.

• Lower upfront costs make home ownership more attainable and less stressful, especially for buyers with modest savings.

• For single parents / legal guardians — this scheme offers a realistic path to own a home with minimal deposit.

• Because property price caps have increased, you have greater flexibility in where you buy (capital cities or regional centres, depending on the cap).

• With no income test, more households now qualify — including those who might have previously been excluded.

⚠️ What to Keep in Mind

• You still need to meet other eligibility criteria (e.g. not owning another home, being Australian citizen or permanent resident, intend to live in the home as owner-occupier — depending on lender requirements). tmbank.com.au+1

• Even with a low deposit, there will be other costs — stamp duty (if applicable), legal fees, loan establishment fees, ongoing repayments, maintenance, etc.

• Because demand has surged under the expanded scheme, lenders and brokers may be busy — it’s worth getting in touch early to confirm eligibility and get pre-approval.

✅ What to Do Next

1. Head to the official scheme website: firsthomebuyers.gov.au — there you can check updated details, eligibility, and property price caps. First Home Buyers+1

2. Talk to a participating lender or mortgage broker about your deposit, income, and what properties are eligible under the new price caps.

3. If you’re eligible, start house‑hunting with realistic expectations — and don’t forget to factor in all homeownership costs, not just the deposit.

4. If you’re a single parent or legal guardian — check the 2% deposit option to see if you qualify under that stream.

🕒 Why It Matters Right Now

With housing prices climbing, delaying entry to the market could mean paying significantly more later. The updated 5% Deposit Scheme gives many Australians a genuine opportunity to buy sooner — saving thousands on deposit and mortgage insurance, while locking in a home before prices rise further.

If you’ve been waiting for a sign — this may be it. 

The Victorian Homebuyer Fund can be the key to getting into your first home sooner — but only if you understand the rules and obligations.

Before applying, make sure you weigh the benefits, understand the pitfalls, and think about the impact on your future property goals.

For a deeper dive — including more detailed calculations and real-world tips — watch our video on the Victorian Homebuyer Fund below.

And if you’d like personalised advice on buying or selling on the Mornington Peninsula, get in touch with one of our friendly team members at McNeill Real Estate. We’re here to help you buy smarter and move with confidence.

Disclaimer: The contents of this video do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such. You should seek legal advice or other professional advice in relation to any particular matters you or your organisation may have.