What is the 5% Deposit Home Guarantee Scheme?
The Home Guarantee Scheme allows eligible first home buyers to purchase a property with just a 5% deposit, without paying lenders mortgage insurance (LMI). This government-backed initiative helps young Australians and families in Hawthorne and across the country get into the property market sooner.
Traditionally, buying a home requires a 20% deposit to avoid LMI costs. For a $600,000 property in Hawthorne, this means saving $120,000 rather than just $30,000 with the 5% scheme. The difference can save years of additional saving while property prices continue to rise.
How Does the Scheme Work?
Under this first time home buyer scheme, the government acts as guarantor for the portion of your loan above 80% loan to value ratio (LVR). This means:
• You contribute a minimum 5% deposit
• The government guarantees up to 15% of the property value
• Your lender provides the remaining loan amount
• No LMI premiums are charged to you
At LBK Lending, we can access Home Loan options from banks and lenders across Australia that participate in this program, ensuring you get suitable interest rate and loan terms for your financial situation.
Eligibility Requirements
To qualify for this scheme, you must meet specific criteria:
- Income Limits: Individual income under $125,000 or combined income under $200,000 annually
- Australian Citizenship: You must be an Australian citizen aged 18 or older
- First Home Buyer Status: You haven't owned property in Australia before
- Property Value Caps: The property must be under specific price thresholds for your location
- Genuine Savings: Demonstrate you can save the required deposit amount
Ready to get started?
Book a chat with a Finance & Mortgage Broker at LBK Lending today.
Benefits of the 5% Deposit Scheme
This first time home buyer program offers several advantages:
Faster Market Entry: Rather than spending additional years saving for a larger deposit, you can start buying your first home sooner. In a rising property market, this timing can be crucial.
LMI Savings: Avoiding lenders mortgage insurance can save thousands of dollars upfront. For a $500,000 loan, LMI could cost between $10,000-$20,000.
Access to Finance: Through our borrowing capacity assessments, we help determine your maximum loan amount under the scheme.
Application Process
Applying for a home loan under this scheme involves several steps:
- Get Pre-Approved: Start by getting pre-approved to understand your borrowing capacity and strengthen your position when making offers
- Gather Documentation: Prepare bank statements, payslips, and other financial documents
- Property Search: Find a suitable property within the scheme's price limits
- Formal Application: Submit your complete application through participating lenders
Our streamlined application process helps connect you with lenders nationwide who offer this scheme, comparing interest rate discounts and loan packages to find the right fit.
Interest Rate Options
Participating lenders offer both variable interest rate and fixed interest rate options under the scheme. Some considerations include:
• Variable Rates: Can fluctuate with market conditions but often start lower
• Fixed Rates: Provide certainty for budgeting over the fixed period
• Split Loans: Combine both variable and fixed portions
• Offset Account: Some lenders offer offset facilities to reduce interest paid
Additional First Home Buyer Support
Beyond the 5% deposit scheme, first home buyers in Queensland may access:
• First Home Owner Grants (FHOG): Direct government grants for eligible purchases
• Stamp Duty Concessions: Reduced or waived stamp duty for qualifying buyers
• Other First Time Home Buyer Programs: Various state and territory initiatives
Our team at LBK Lending helps Hawthorne clients identify all available benefits and packages to maximise their savings when buying a home.
Working with LBK Lending
As mortgage brokers, we provide access to banks and lenders nationwide, not just major banks. This broader access means we can compare:
• Interest rates across multiple lenders
• Loan features and flexibility
• Settlement timeframes
• Ongoing service quality
Whether you're looking at your first Home Loan or considering investment loan options for the future, we're here to guide you through each step.
The 5% deposit scheme represents a significant opportunity for eligible first home buyers in Hawthorne to enter the property market. With proper planning and the right mortgage broker support, you can take advantage of this initiative to start building equity in your own home rather than continuing to pay rent.
Call one of our team or book an appointment at a time that works for you to discuss how the Home Guarantee Scheme could work for your situation.
