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5% Deposit Scheme · NSW

Australian Government 5% Deposit Scheme in NSW: Who Qualifies, Price Caps and How to Apply

By the Mortgagefy Team · Published 25 Oct 2026 · Last reviewed 25 Oct 2026

The 5% Deposit Scheme, formerly the Home Guarantee Scheme, lets eligible first home buyers buy with a deposit of as little as 5% and no lenders mortgage insurance. The rules changed on 1 October 2025, and a lot of older articles are now out of date. Here is what applies now, checked on 25 October 2026.

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General information only, not financial advice. Conditions apply.

Who this guide is for

First home buyers saving a deposit of 5% to 10% in Sydney, Newcastle, the Hunter or regional NSW
Single parents and legal guardians, who can use a deposit as low as 2%
Buyers who read an older article mentioning income caps or limited places and are unsure what is true now
People deciding between a smaller deposit now and saving longer to reach 20%
Buyers combining the scheme with NSW duty relief, the First Home Owner Grant or the First Home Super Saver Scheme

What changed on 1 October 2025

Before 1 October 2025 the scheme had a limited number of places each year and income caps. From that date the government removed the limits on places, removed the income caps, and raised the property price caps. It also replaced the separate Regional First Home Buyer Guarantee with the one scheme. If a guide still talks about 35,000 places, a $125,000 income limit or a $900,000 Sydney cap, it is describing the old rules.

What has not changed is that the scheme is a guarantee to your lender, not a cash grant. You are still responsible for the loan, you still need a genuine deposit, and you must meet ongoing conditions such as living in the property as your home.

How Mortgagefy helps

Check eligibility early

We walk through the government's eligibility tool with you and tell you honestly what looks likely before you start looking at properties.

Price caps against your search

We check the cap for the suburb and postcode you are targeting, and what happens if the lender's valuation comes in under the price.

A lender that fits your file

You can only apply through a participating lender. Policy on income type, deposit source and credit history still differs between lenders, so we match your file.

Combine the right schemes

We explain how NSW duty relief, the First Home Owner Grant and the First Home Super Saver Scheme can sit alongside the scheme, and where they do not apply.

The rules at a glance (checked 25 Oct 2026)

Deposit: a minimum of 5% for first home buyers, or 2% for single parents and legal guardians. There are no income caps, no waiting list and no lenders mortgage insurance, with unlimited places from 1 October 2025. You apply only through a participating lender as part of a home loan application, not directly to Housing Australia, and you provide documents such as proof of citizenship or residency and a signed home buyer declaration.

Price caps in NSW: $1.5 million for the capital city and listed regional centres, and $800,000 for other areas. The listed NSW regional centres are Central Coast, Coffs Harbour-Grafton, Illawarra, Mid North Coast, Richmond-Tweed, and Newcastle and Lake Macquarie. Both the purchase price and the home's value as assessed by your lender must be at or below the cap, and some suburbs have more than one postcode with different caps. Use the government's postcode tool and confirm with your lender.

Process: once pre-approved you have 90 days to find a home and sign a contract. You can buy a house, townhouse or apartment, new or existing, a house-and-land package, an off-the-plan home, or vacant land with a building contract. To keep the guarantee you must meet ongoing obligations, including living in the property as an owner-occupier.

Other help that can sit alongside it

NSW transfer duty: eligible first home buyers pay no duty on a new or existing home valued up to $800,000, with a concessional rate up to $1 million (contracts from 1 July 2023). At least one buyer must be an Australian citizen or permanent resident, and you must live in the home for 12 continuous months. Temporary residents are not eligible. Source: Revenue NSW.

First Home Owner Grant: $10,000 for new or substantially renovated homes up to $600,000 (up to $750,000 for land plus a building contract), not for established homes. First Home Super Saver Scheme: lets you save up to $50,000 plus earnings towards a first home through voluntary super contributions. Help to Buy: a separate shared-equity scheme with a minimum 2% deposit where the government contributes up to 30% (existing homes) or 40% (new homes). It has 10,000 places a year, all applicants must be Australian citizens, and taxable income must be at or below $103,000 for individuals or $165,000 for single parents and joint applicants (indexed each year). See our Help to Buy guide. Each scheme has its own eligibility rules, so check the official sites.

How it works

1
Free call
Tell us your income, savings, visa or citizenship status and the area you want to buy in.
2
Eligibility and cap check
We check the scheme, price cap and any NSW relief against your plan.
3
Pre-approval
We lodge with a participating lender that suits your file, starting your 90-day search window.
4
Contract to settlement
We coordinate valuation, conditions and settlement with your conveyancer.

Run your numbers first

Estimate repayments and borrowing power with our home loan calculators or the borrowing power calculator.

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Frequently asked questions

No. From 1 October 2025 the government removed the income caps and the limit on the number of places. Older articles that quote a 125,000 dollar single or 200,000 dollar couple limit, or 35,000 places, describe the old rules.

The cap is 1.5 million dollars for the capital city and listed regional centres, and 800,000 dollars for other areas. The listed regional centres are Central Coast, Coffs Harbour-Grafton, Illawarra, Mid North Coast, Richmond-Tweed, and Newcastle and Lake Macquarie. Check your suburb and postcode in the government's tool and confirm with your lender.

No. It is a government guarantee to your lender that lets you borrow with a smaller deposit without paying lenders mortgage insurance. You still need to save the deposit, pay the costs of buying and repay the loan.

No. You apply through a participating lender as part of a home loan application. The lender assesses your eligibility and submits the application.

Single parents and legal guardians can use the scheme with a minimum 2 percent deposit. Eligibility conditions apply, so check the government's information for single parents and confirm with a participating lender.

Both the purchase price and the lender's valuation must be at or below the price cap, and a low valuation can also mean you need more deposit. We build a buffer into your plan and talk through this before you exchange.

Often yes, because they are separate programs with their own rules. The First Home Owner Grant applies only to new homes, while NSW duty relief can apply to new or existing homes up to the price thresholds. Check each program's eligibility with Revenue NSW and your lender.

Information checked on 25 Oct 2026. Lender policies, grants and visa rules change often, so confirm current requirements with your chosen lender or the relevant authority before applying. This information is general in nature and is not financial, tax, legal or migration advice.

More first home buyer guides

First Home Buyer LakembaLocal guide for Lakemba buyers. First Home Buyer BankstownLocal guide for Bankstown buyers. Mortgage Broker Newcastle and HunterHome loans in Newcastle and the Hunter.

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