5% Deposit Scheme

For many South Australians, saving a 20% home deposit can feel like the biggest obstacle to getting into the property market. The Australian Government's First Home Guarantee (FHG) helps eligible buyers purchase a home with as little as a 5% deposit while avoiding the significant cost of Lenders Mortgage Insurance (LMI).

What Is the First Home Guarantee?

The First Home Guarantee is an Australian Government initiative administered by Housing Australia that allows eligible buyers to purchase a home with a deposit of at least 5%, without paying Lenders Mortgage Insurance (LMI).  Normally, lenders require borrowers to have a 20% deposit to avoid LMI. Under the scheme, the government guarantees a portion of the loan, allowing lenders to treat your loan as though you have a 20% deposit. 

What's Changed Recently?

The scheme expanded significantly from 1 October 2025.

Key changes include:

• No income caps for eligible applicants.
• Unlimited places available.
• Increased property price caps.
• Continued access with a minimum 5% deposit.
• No LMI required. 

These changes have made the scheme far more accessible for first home buyers across South Australia. 

Who is Eligible?

To access the First Home Guarantee, you generally need to:

• Be an Australian citizen or permanent resident: Applicants must be Australian citizens or permanent residents and at least 18 years old. 
• Be a first home buyer: The scheme is designed for people purchasing their first home, or those who have not owned residential property in Australia within the previous 10 years. 
• Intend to live in the property: The home must be your principal place of residence. Investment properties are not eligible. 
• Have at least a 5% deposit: You must contribute a minimum deposit of 5% of the property's value.

One of the biggest advantages for South Australian first home buyers is that the scheme can be used for:

• House and land packages
• Building contracts on vacant land
• Off-the-plan properties

South Australia Property Price Caps

To qualify, the property must fall within the Government's price cap limits. Current South Australia caps are:

The value of the land plus build cost must remain within the applicable cap when constructing a new home.

Can You Combine it with other First Home Buyer Benefits?

Absolutely. Many South Australian buyers combine the First Home Guarantee with:

First Home Owner Grant (FHOG) South Australia currently offers a $15,000 First Home Owner Grant for eligible buyers purchasing or building a new home.

Stamp Duty Relief South Australia has introduced significant stamp duty concessions for eligible first home buyers purchasing new homes and vacant land. This can save buyers thousands of dollars on upfront costs.

First Home Super Saver Scheme (FHSSS) This federal initiative allows first home buyers to make voluntary contributions into superannuation and withdraw eligible amounts to help fund their deposit.

Combining multiple schemes can dramatically reduce the amount of savings needed to enter the market.

How Do You Apply?

You cannot apply directly through Housing Australia.

Applications must be lodged through an approved participating lender as part of your home loan application.

The process typically involves:

1. Checking your eligibility.
2. Speaking with a participating lender or mortgage broker.
3. Obtaining loan pre-approval.
4. Finding a suitable property or building package.
5. Completing the guarantee application.
6. Proceeding to settlement and moving into your new home. 

Disclaimer: Government schemes and eligibility criteria can change. Always confirm the latest requirements with Housing Australia and your lender before making financial decisions. for further information visit https://firsthomebuyers.gov.au/