Buy Your First Home With A 5% Deposit Without Wasting $35,000 On LMI
Saving a 20% deposit in Sydney, Melbourne, or Brisbane takes an average of 8 to 12 years. The Home Guarantee Scheme lets eligible buyers enter the market with just 5% cash while paying zero LMI and securing competitive tier-1 interest rates.
We match you with accredited first home specialists who calculate your exact price caps, reserve your statutory Housing Australia place, and combine the scheme with state stamp duty exemptions.
Here's the strategy we propose: Let's match you with an accredited first home advocate today who will reserve your 5% deposit Housing Australia quota and eliminate up to $35,000 in LMI costs.
How It Works (Takes 2 Minutes)
1. How the 2026 Home Guarantee Scheme (HGS) Eliminates LMI
Under standard Australian lending guidelines, buying a home with less than a 20% deposit requires paying Lenders Mortgage Insurance (LMI). LMI is an expensive one-off insurance fee that protects the lender (not you) if you default.
On a $750,000 property with a 5% deposit ($37,500), standard LMI costs between $24,000 and $32,000. This fee is either deducted from your cash or added to your loan, increasing your monthly repayments for 30 years.
5% Deposit HGS Savings & LMI Elimination Calculator
Calculate your exact LMI savings and verify your statutory state property price cap.
| State / Territory | Capital City & Regional Centre Cap | Rest of State Cap | Max LMI Savings |
|---|---|---|---|
| New South Wales (NSW) | $900,000 (Sydney / Newcastle / Illawarra) | $750,000 | 🛡️ Up to $34,800 LMI Saved |
| Victoria (VIC) | $800,000 (Melbourne / Geelong) | $650,000 | 🛡️ Up to $29,600 LMI Saved |
| Queensland (QLD) | $700,000 (Brisbane / Gold Coast / Sunshine Coast) | $550,000 | 🛡️ Up to $24,200 LMI Saved |
| Western Australia (WA) | $600,000 (Perth) | $450,000 | 🛡️ Up to $19,500 LMI Saved |
| South Australia & ACT | $600,000 (Adelaide) / $750,000 (Canberra) | $450,000 | 🛡️ Up to $21,000 LMI Saved |
2. Statutory Property Price Caps by State & Territory (2026 Limits)
To qualify for the HGS scheme, your purchase price cannot exceed the statutory caps set by Housing Australia:
- New South Wales: Capital City (Sydney, Newcastle, Lake Macquarie, Illawarra) cap is $900,000; Rest of State cap is $750,000.
- Victoria: Capital City (Melbourne, Geelong) cap is $800,000; Rest of State cap is $650,000.
- Queensland: Capital City (Brisbane, Gold Coast, Sunshine Coast) cap is $700,000; Rest of State cap is $550,000.
- Western Australia: Capital City (Perth) cap is $600,000; Rest of State cap is $450,000.
- South Australia: Capital City (Adelaide) cap is $600,000; Rest of State cap is $450,000.
- ACT & NT: Canberra cap is $750,000; Northern Territory cap is $600,000.
3. Income Caps & Genuine Savings Rules
To prevent wealthy investors from exploiting the scheme, strict statutory income thresholds apply:
- Single Applicants: Maximum taxable income of $125,000 on your most recent ATO Notice of Assessment (NOA).
- Joint Applicants (Couples, Siblings, Friends): Combined taxable income of up to $200,000.
- Genuine Savings: You must demonstrate at least 5% genuine savings through 3 months of bank statements, shares, or an approved Rental Ledger Verification (proving 6+ months of on-time rental payments).
4. Major Bank Allocation vs Non-Major Quota Reservations
There are 35,000 First Home Guarantee places released each financial year. The major banks (CBA, Westpac, NAB) receive large allocations, but their internal branch quotas often fill up quickly.
However, Housing Australia allocates substantial quotas to over 30 non-major and customer-owned lenders (including Bankwest, Great Southern Bank, Auswide, Teachers Mutual, and Pepper Money). An accredited mortgage broker can cross-check live quota reservations across all 30+ lenders instantly, reserving your place before you attend open homes.
Verified Mortgage Specialists
Accredited credit representatives independently verified against the ASIC Professional Register. Governed by statutory Best Interests Duty (BID) with direct wholesale lender desk access.
Frequently Asked Questions: 5% Home Guarantee Scheme Guide
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Questions are reviewed and answered by verified BBA partner specialists and our credit research team.
"We want to buy a home for $880,000 in Newcastle with a $45,000 deposit. Does Newcastle qualify for the $900k Sydney cap under the 2026 Home Guarantee Scheme?"
"Can I combine the 5% Home Guarantee Scheme with the Queensland First Home Owner Grant ($30,000)?"