Jump into the market up to 4 years sooner with 5% deposit scheme
September 10, 2025
If you’re like most first home buyers, you’ve probably realised by now that saving up for a 20% deposit can be a real slog. But what if we told you that you now only need a 5% deposit? And better yet, you could already have that amount ready to go now.
Saving up a deposit to buy a first home can be the equivalent of running a financial marathon.
It takes around 5.6 years for the average Australian family to save a 20% deposit, according to PropTrack (and potentially even longer, depending on where you want to buy).
But here’s the rub.
Home prices don’t stand still while you’re growing that all-important deposit.
Rising property prices can push the goal posts further out of reach no matter how hard you save.
The good news is that the recent expansion of the popular Home Guarantee Scheme (HGS) is expected to reduce the time taken to save a deposit by up to four years, says Housing Industry Association (HIA) Senior Economist Tom Devitt.
Our back-of-the-napkin maths says that means it could now take first home owners just over 18 months to save for a first home deposit – and many on their savings journey might already be there.
What is the Home Guarantee Scheme?
The HGS is designed to help first home buyers buy a place of their own sooner.
Unlike, say, the First Home Owner Grant, which sees eligible first home buyers receive a one-off payment, no money changes hands with the HGS.
Instead, it works by letting first home buyers purchase a place with just a 5% deposit, while the federal government guarantees the remaining 15%.
This provides lenders with security equal to a 20% deposit, meaning home buyers don’t need to pay lenders mortgage insurance (LMI) – which is usually not a small amount.
“First home buyers pay between $25,000 and $30,000 in LMI to purchase an average home,” explains the HIA’s Mr Devitt.
In this way, first home buyers can now get into the market with a smaller deposit while also saving on upfront costs.
Unlimited places, higher home price caps from 1 October 2025
The federal government recently announced important changes to the HGS.
From 1 October 2025, the scheme will be open to all Australian first home buyers.
There will be no limit on the number of people who can apply each year.
Income caps will be scrapped, allowing first home buyers with higher incomes to access the scheme. And property price thresholds will be raised to help home buyers where home values have increased.
The bottom line, according to the HIA, is that these changes to the HGS could see first home buyers buy a place of their own four years sooner on average.
How we can help you buy your first home
If you’re a first home buyer, the stars may finally be aligning.
Our job is to help you make the most of every opportunity to buy a home of your own.
Not all lenders have signed up to the HGS.
So talk to us to find out which loans and lenders are part of scheme and get the ball rolling on your first home.
Disclaimer:
The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Updates
Spring is traditionally the peak season for property, and three rate cuts this year could further fuel buyer competition. Check out five steps that can give you a valuable head start this spring.
The popular Home Guarantee Scheme that lets first home buyers get into the market with just a 5% deposit has been expanded sooner than expected. But an unexpected twist means first home buyers may want to bring forward their buying plans.
Since February, three rate cuts have prompted homeowners across Australia to review their mortgages. Many have found better deals through home loan refinancing. More than 100,000 home loans were approved in the past quarter. This week, the ABS reported that 1.26 million home loans have been refinanced over the past three years. Refinancing first surged during the RBA’s rate hikes in 2022 and 2023. Now that rates are falling , demand for refinancing remains as strong. In the June 2025 quarter alone, almost 100,000 mortgages were refinanced. That equals more than 1,000 home loans for refinancing every day, the highest level since September 2023. So, why are Australians turning to refinancing in such large numbers? Saving on Loan Interest and Cutting Repayments Through Refinancing The RBA’s rate cuts this year total 0.75%. That has delivered some relief. Yet many borrowers are achieving far greater savings by choosing a refinancing home loan. According to Canstar , a borrower with a $600,000 loan could save more than $12,000 in two years by switching to a lower-rate loan. This assumes they have not renegotiated their rate in the past three years. For many Australians, that is the case. A Finder survey also shows that over half of homeowners do not know their current interest rate. This lack of awareness means many are paying more than necessary instead of exploring home loans for refinancing. Accessing Home Equity Through Home Loan Refinancing Refinancing a home loan is not just about securing lower repayments. It also allows borrowers to unlock the equity in their property. Property values have risen 45% nationally in the past five years and are 65% higher than they were a decade ago. This growth gives borrowers more flexibility to use refinanced home loans to fund: Home renovations Children’s education An investment property purchase Debt consolidation at a lower rate Upgrading to a Home Loan for Refinancing That Works Better Many borrowers choose refinancing to improve loan features. These features may include: Offset accounts to cut interest Flexible repayment options The ability to split between fixed and variable rates A redraw facility for extra repayments If your current loan does not offer these features, refinancing could deliver more flexibility and long-term value. Why It Pays to Act Now on Refinancing a Home Loan In the last quarter, over 100,000 Australian families refinanced their mortgages. They secured lower repayments, unlocked equity, or upgraded loan features. Waiting longer only means paying more on an outdated loan. At Osinski Finance , we make home loan refinancing simple. We offer services in home loans , property investment , and refinancing your home loan . Whether you want to cut repayments, access equity, or enjoy smarter features, our experts compare hundreds of options and handle the process for you. Contact us today and let us help you find the best home loans for refinancing so you can save money and move forward with confidence Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.