The Albanese Government has announced a major update to its housing agenda: the expanded 5% deposit scheme will now launch earlier than expected — on 1 October 2025.

For first home buyers across Australia, this change could be life-changing. Saving a deposit has long been one of the toughest hurdles to home ownership, but now more buyers will be able to step into the property market sooner, with fewer upfront costs.

At HR Mortgage & Finance, we believe it’s important to break down what this means for everyday Australians and how brokers like us can help you navigate the options.

What Is the 5% Deposit Scheme?

Traditionally, lenders require a 20% deposit to avoid paying Lenders Mortgage Insurance (LMI) — an extra cost that protects the bank, not the borrower. For many first home buyers, saving that 20% takes years, especially with today’s house prices.

The 5% deposit scheme changes this. Under the program, the Government guarantees a portion of your loan, allowing you to purchase with as little as a 5% deposit while avoiding LMI.

For example:

• On a median Australian home priced at $844,000, a 20% deposit would normally be $168,800.
• Under the 5% scheme, the deposit drops to just $42,200 — saving buyers years of savings time and potentially tens of thousands of dollars in insurance premiums.

What’s Changing from October 2025?

The Government has accelerated the scheme’s start date to 1 October 2025 instead of 2026. Key updates include:

• Open to all first home buyers: No caps on income or limited places.
• Higher property price caps: Reflecting current market values, giving buyers more choice of homes.
• No LMI required: A guaranteed saving of tens of thousands.
• Greater lender diversity: Housing Australia will work with customer-owned, regional, and smaller banks, not just the majors.

This expansion is expected to save first home buyers around $1.5 billion in LMI costs in the first year alone.

Real-World Examples

The numbers speak for themselves:

• Brisbane Buyer: Purchase a $1 million home with just a $50,000 deposit, save up to 10 years of saving time, and avoid $42,000 in LMI costs.
• Bendigo Buyer: Purchase a $600,000 home with a $30,000 deposit, save up to 6 years, and avoid $25,000 in LMI costs.

Instead of waiting and renting, buyers can redirect those payments toward their own mortgage.

What This Means for First Home Buyers

For many Australians, this is the biggest opportunity in decades to break into the property market. With property prices rising faster than wages, lowering the deposit barrier can make the difference between renting indefinitely and owning a home.

However, as with any government scheme, there are details to consider — such as lender policies, property price caps in your area, and how the guarantee affects your overall loan structure.

That’s where mortgage brokers step in.

How HR Mortgage & Finance Can Help

At HR Mortgage & Finance, we:

• Compare loans from over 50 lenders to find the right fit for your situation.
• Explain the 5% deposit scheme clearly, including how it affects your repayments and long-term affordability.
• Help you structure your loan so you take full advantage of the Government guarantee.
• Guide you through the application process — from pre-approval to settlement.

We don’t just present you with options; we make sure you understand them, so your first home purchase is confident and stress-free.

Final Thoughts

The Albanese Government’s decision to fast-track the 5% deposit scheme is welcome news for aspiring homeowners. By removing the deposit barrier and scrapping LMI, it opens the door for thousands of Australians to achieve the dream of home ownership much sooner.