More First Home Buyers enter the market with 5% deposits
The expansion of the 5% Deposit Scheme in October 2025 has had a big impact.
According to Equifax, lenders that participate in the scheme recorded a 16.4% increase in loan volumes between October 2025 and March 2026, while demand for non-participating lenders fell 6.5%.
At the same time, borrower enquiries increased 22.8% among 18–25-year-olds and 17.4% among 26–35-year-olds.
Why the scheme is attracting attention
Normally, buyers with less than a 20% deposit need to pay lenders mortgage insurance (LMI).
Under the 5% Deposit Scheme, eligible buyers can purchase with as little as a 5% deposit without paying LMI, because the federal government guarantees part of the loan.
That can save thousands of dollars and help buyers enter the market sooner.
Buyers are broadening their search
Interestingly, Equifax found 81.9% of first home buyers purchased outside their existing suburb.
That suggests many buyers are prioritising affordability and opportunity over familiarity.
The trade-offs to consider
A smaller deposit can help you buy sooner.
But it also means:
- Borrowing more
- Paying more interest over time
- Having less equity initially
Not sure whether the 5% Deposit Scheme is the right fit? Let’s explore your options and see what may be available.
Contact Donna-lee – 0418903954 or email donna-lee@celsius.com.au