Small deposit? 50,000 Home Guarantee Scheme spots just opened up

Growing a 20% deposit isn’t just challenging—it’s a long slog. Fortunately, 50,000 new places in the 5% deposit Home Guarantee Scheme 2025 opened July 1.

Struggling to reach that seemingly mythical 20% milestone? You’re not alone. Property exchange platform PEXA says it can now take buyers more than a decade to save up a deposit for a home.

Who’s got that sort of time? This is where the Home Guarantee Scheme (HGS) can come in. It allows first home buyers to enter the market with as little as a 5% deposit. The good news is that on the 1st of July, 50,000 new HGS places became available.

How the 5% deposit first home buyer scheme works

Instead of providing a cash payment, the HGS sees the federal government guarantee your home loan. In this way, the HGS offers a chance to buy a place of your own with just a 5% deposit – and pay zero lenders mortgage insurance (LMI).

The savings on LMI alone can be worth tens of thousands of dollars. The real clincher is that it can take far less time to save a 5% deposit compared to pulling together a 20% deposit.

And right now, time kind of matters. According to CoreLogic, home prices will increase by 5.8% over the next 12 months.

HGS places are limited

Given the potential benefits, it’s no surprise that over 230,000 first home buyers have already taken advantage of the 5% deposit Home Guarantee Scheme 2025 to achieve their goal of home ownership. However, only a limited number of HGS spots are available each year. That’s why it’s so exciting to see the extra 50,000 places become available on 1 July. The government has allocated these spots across three different guarantees – 35,000 to the First Home Guarantee, 10,000 to the Regional First Home Buyer Guarantee, and 5,000 to the Family Home Guarantee aimed at single parents.

The fine print

The HGS does come with eligibility criteria. If you’re unsure whether you’re eligible, get in touch and we can let you know if you’re eligible straight away. As a quick guide, singles have an income limit of $125,000, or up to $200,000 combined for a couple (this includes mates or siblings buying together).

If your income is above this, the Albanese Government has pledged to expand the HGS by scrapping home buyer income limits in 2026. While the HGS also sets property price limits (these vary according to location), the scheme gives you the freedom to choose a new or established home, a house-and-land package or even an off-the-plan apartment.

Get in touch

Not surprisingly, HGS places can fill up fast. Don’t miss out — get in touch to check your eligibility for the 5% deposit, no-LMI Home Guarantee Scheme. Get in contact with our Lending Specialists today to start your journey toward home ownership sooner rather than later.

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