5 percent deposit home loans with no LMI
Buy your first home with a 5 percent deposit home loan and pay zero Lenders Mortgage Insurance. Under the expanded First Home Guarantee, the government guarantees the gap between your deposit and 20%, so lenders waive LMI entirely. Since October 2025, there are no income caps, no annual place limits, and property price caps have increased across every state. More first home buyers qualify now than at any point since the scheme launched. Stryve compares participating lenders across our panel to find who will approve you at the best rate. A 15-minute call clarifies your position. No credit check, no obligation.
Based on 250+ reviews
Elite Broker Winner 2024 & 2025
We compare your rates with 50+ lenders
How a 5 percent deposit home loan actually works
A 5 percent deposit home loan under the First Home Guarantee works like a standard home loan, with one key difference: the government guarantees the gap between your 5% deposit and the 20% lenders would normally want. Your lender treats the loan as if you had a 20% deposit, which means no LMI.
That LMI saving alone is often worth $15,000 to $30,000. You keep that money instead of paying it upfront or adding it to the loan. Your repayments are then based on 95% of the property value, while the guarantee stays in the background between the government and the lender.
Single parents and legal guardians can access an even lower entry point through the Family Home Guarantee, which allows purchases with a 2% deposit under a similar structure.
According to Housing Australia, from 1 October 2025 the First Home Guarantee removed income caps and annual place limits, making the scheme permanently available to eligible first home buyers.
That means you can apply any time of year without racing a quota. See our full First Home Guarantee breakdown for the detailed eligibility and property rules.
What buying with a 5 percent deposit actually saves you
On a $700,000 property, a 5% deposit is $35,000. A 20% deposit is $140,000. That's $105,000 less to save, which can mean buying years sooner.
On a $665,000 loan at 95% LVR, LMI would often cost $15,000 to $30,000. Under the guarantee, you pay $0. Combined, that can mean up to $135,000 in lower deposit and LMI costs on one purchase.
These are the property price caps by state and territory from October 2025. According to Housing Australia, Sydney's cap increased from $900,000 to $1,500,000, the largest increase of any capital city. These caps apply to the purchase price, not the loan amount. For a full guide to deposit options from 2% to 20%, see our deposit guide.
NSW / Sydney
$1,500,000 in Sydney. $900,000 for the rest of NSW.
VIC / Melbourne
$950,000 in Melbourne. $700,000 for the rest of Victoria.
QLD / Brisbane
$1,000,000 in Brisbane. $750,000 for the rest of Queensland.
WA / Perth
$900,000 in Perth. $600,000 for the rest of Western Australia.
SA / Adelaide
$800,000 in Adelaide. $550,000 for the rest of South Australia.
TAS / Hobart
$700,000 in Hobart. $550,000 for the rest of Tasmania.
ACT
$1,000,000 across the Australian Capital Territory.
NT
$600,000 across the Northern Territory.
What lenders look at beyond your deposit
Having 5 percent saved is the starting point, not the finish line. Lenders still assess a few key areas before approval, and different lenders weigh them differently.
You do not need to fit every rule perfectly. The real job is matching your profile to the lender whose policy suits it best.
While true no deposit home loans are rare in Australia, 5 percent is the practical minimum under the guarantee. That’s $35,000 on a $700K property instead of $140,000.
02
Clean credit history
Lenders check for defaults, late payments, and existing debts. Minor issues can narrow your options, while serious defaults can close doors, so it helps to check your credit file before you apply.
03
Serviceability at current rates
Lenders test whether you can afford repayments at a buffer rate, usually about 3% above the current rate. That can cut borrowing capacity sharply, which is why pre-approval matters before you start searching.
04
Employment and income verification
PAYG borrowers usually need recent payslips and tax documents. Self-employed borrowers face more scrutiny, with most lenders wanting 2 years of returns, although some accept 1 year in the right scenario.
05
Eligible property type
The property must be residential and owner-occupied. Houses, townhouses, apartments, and house-and-land packages can qualify, but investment properties do not.
Not sure where you stand?
A 15-minute call can clarify your deposit position, borrowing capacity, and which lenders fit your situation. No obligation, no pressure, no hidden fees.
See if you qualifyNot all lenders participate, and rates vary more than you'd think
Your lender choice shapes your outcome
The lender you choose affects your rate, approval criteria, and even how your income is assessed. Two participating lenders can deliver very different outcomes on the same guarantee.
Rates differ between participants
Two participating lenders can charge rates 0.5% apart. On a large loan, that gap can cost thousands per year. The guarantee removes LMI, but it does not standardise pricing.
Approval criteria vary widely
A lender might decline a self-employed borrower that another would approve. Apartment policies vary too, which is why seeing across the whole panel matters.
Stryve matches you to the right lender
Instead of applying to one lender and hoping for the best, Stryve compares participating lenders to find the strongest fit for your income, deposit source, and property type.
Alternative pathways exist
If you don't qualify or the caps don't suit your area, other low-deposit options include the Help to Buy scheme with just a 2% deposit and lender-specific products that accept deposits below 10% with reduced LMI.
Frequently asked questions
Find out if you can buy with a 5 percent deposit
A personalised assessment across participating lenders, matched to your income, deposit, and property goals. No obligation. No pressure. Over 400 first home buyers approved in 2024, with an average LMI saving of $22,000. You’ll speak with a real person who specialises in first home buyer applications.
See if you qualify