The Albanese Labor Government is helping more Australians realise their dream of home ownership sooner, by launching 5 per cent deposits for all first home buyers early on 1 October 2025, instead of next year.
Through the expanded 5 per cent deposit scheme, the Albanese Government will guarantee a portion of a first home buyer’s home loan, so they can purchase with a lower deposit and not pay Lenders Mortgage Insurance.
Under the changes, all first home buyers will have access, with no caps on places or income limits. Property price caps will also be set higher in line with average house prices, providing access to a greater variety of homes.
For the average first home buyer, access to the scheme cuts years off the time it takes to save for a deposit and saves tens of thousands of dollars on Lenders Mortgage Insurance. In just the first year alone, first home buyers using the scheme are expected to avoid around $1.5 billion in potential mortgage insurance costs.
The median home price in Australia today is $844,000 and 5 per cent of that is $42,200. The last time $42,200 covered the 20 per cent deposit for a median home was 2002, which shows the generational scale of this change.
The expanded scheme means a first home buyer in Brisbane can purchase a $1 million home with a $50,000 deposit. They could save up to 10 years off the time it takes to save for a deposit, save about $42,000 in mortgage insurance, and could pay up to $350,000 towards their own loan instead of paying rent.
It means that a first home buyer in Bendigo could purchase a $600,000 home with only a $30,000 deposit. They could save up to 6 years off the time it takes to save for a deposit, save about $25,000 in mortgage insurance, and could pay up to $126,000 towards their own loan instead of paying rent.
After consulting with industry, the Government will also direct Housing Australia to promote the diversity of lenders who offer the scheme, giving first home buyers greater choice to buy a home through smaller, customer-owned and regional banks.
Labor was re-elected with a clear mandate to bring down the deposit hurdle for first home buyers and this is just one part of the Albanese Labor Government’s ambitious $43 billion housing agenda. We are building more homes, backing first home buyers, and supporting renters.
Since coming to office in 2022, Labor has helped over 180,000 first home buyers get a home of their own with a lower deposit. On average, there have been 6,000 more first home buyer loans a year under Labor compared to the Coalition’s previous period in office.
For more information on the 5 per cent deposits scheme, go to the Housing Australia website.
Quotes attributable to Prime Minister Anthony Albanese
“We want to help young people and first home buyers achieve the dream of home ownership sooner.
“Bringing the start date of our 5 per cent deposit scheme forward will do just that.
“Getting more Australians into their own home quicker, while saving them money along the way.
“Labor was re-elected with a clear mandate to bring down the deposit hurdle for first home buyers, and we’re delivering.”
Quotes attributable to Minister for Housing, Clare O’Neil
“5 per cent deposits for all first home buyers will mean people can get into their own home sooner.”
“The Albanese Labor Government is stepping up to level the playing field and back a new generation of first home buyers into the housing market.”
“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.”
“Yesterday we announced reforms to unlock tens of thousands of new homes and today we’re announcing changes to help tens of thousands of first home buyers get into home ownership.”