How the guarantee works
A participating lender assesses the application under its own credit criteria. Where all scheme rules are met, the government guarantee covers part of the lender risk that would otherwise exist at a higher loan-to-value ratio.
What the buyer still needs
Buyers need the required contribution plus purchasing costs, evidence to support the application and capacity to meet repayments. A smaller deposit can also mean a larger loan and more interest over time.
Questions to check before applying
Confirm participating lenders, buyer eligibility, property criteria, price limits, occupancy requirements and the treatment of prior property ownership. Check again before signing a contract.
Compare the scheme with alternatives
Depending on the circumstances, alternatives may include saving a larger deposit, a family guarantee or another suitable lending pathway. Compare risks, flexibility and total cost.
Common questions
Questions first home buyers ask
Is the 5% Deposit Scheme a grant?
No. It is a government guarantee supporting part of an eligible loan. The borrower remains responsible for the deposit, purchasing costs and home loan repayments.
Does every lender offer the scheme?
No. Applications are made through participating lenders, and each lender also applies its own credit assessment.
Can I use the scheme for an investment property?
Owner-occupancy requirements apply. Check the official rules for eligible property use and ongoing obligations.