The Allbanese Labor Government will bring forward its expanded 5 per cent deposit scheme for first home buyers, launching on 1 October 2025 instead of next year.
The scheme will guarantee a portion of a first home buyer’s loan, allowing them to purchase with a smaller deposit and avoid paying Lenders Mortgage Insurance (LMI). Unlike previous versions, the expanded program will have no caps on places or income limits, and property price caps will be lifted in line with average house prices.
Prime Minister Anthony Albanese said the move would save first home buyers years of saving and thousands in mortgage insurance costs.
“Bringing the start date of our 5 per cent deposit scheme forward will help more Australians achieve the dream of home ownership sooner, while saving them money along the way.”
For many, the changes could be game-changing. A buyer in Brisbane will be able to purchase a $1 million home with a $50,000 deposit, cutting up to 10 years off saving time and avoiding about $42,000 in LMI. In Bendigo, a buyer could secure a $600,000 property with just $30,000 down, saving up to six years of saving and around $25,000 in LMI.
With the median Australian home now costing $844,000, a 5 per cent deposit amounts to $42,200 — the same amount needed for a full 20 per cent deposit back in 2002, highlighting the generational scale of the challenge.
Housing Minister Clare O’Neil said the scheme was about levelling the playing field.
“It’s just not right that an entire generation of young Australians have been locked out of the housing market – saving for decades while paying off someone else’s mortgage. So Labor’s changing it.”
The government will also direct Housing Australia to promote a wider range of lenders, including regional and customer-owned banks, to give buyers more choice.
The 5 per cent deposit scheme is part of Labor’s $43 billion housing agenda, which also includes boosting supply and supporting renters. Since taking office in 2022, Labor says it has helped over 180,000 first home buyers into the market — 6,000 more per year on average compared to the previous Coalition government.
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