The 5% Deposit Scheme in 2026: A Sydney First Home Buyer’s Guide

The expanded Home Guarantee Scheme, most people just call it the 5% deposit scheme, changed the maths for Sydney first home buyers. Here is how it works in 2026.

What it does

Housing Australia guarantees part of your loan so a participating lender can accept a 5% deposit without charging lenders mortgage insurance. It is a guarantee, not a grant, you borrow the rest and make normal repayments.

What changed in October 2025

Income caps were removed and the cap on places was lifted. Property price caps rose too: $1.5 million for Sydney and NSW’s major regional centres, $800,000 for the rest of the state.

The fine print that matters

You need to be an Australian citizen or permanent resident, live in the home, and hold at least 5% in genuine savings plus buying costs. Buyers who have owned before can qualify if they have not owned in the last ten years. Eligibility is assessed by Housing Australia and the lender, not by a website quiz.

Can it be combined with other help?

Often, yes, the NSW stamp duty exemption and the First Home Owner Grant may apply alongside it, depending on eligibility. Some programs cannot be combined, so check before you count on anything.

Two minutes with the 5% deposit checker on our first home buyers page gives you a first read; a proper conversation confirms it.

General information only, not credit, legal or tax advice. Your situation is assessed properly before any recommendation. Government scheme details change; figures are current at the time of writing.