Five Per Cent Home Deposit Scheme Brought Forward to October
The government’s first homebuyer deposit scheme is being kicked off earlier than expected, and that’s big news for Australians who’ve been struggling to crack into the housing market. Originally promised to start later, the initiative will now begin in October—three months ahead of schedule.
So, what’s this all about? Well, the scheme lets first homebuyers purchase a property with just a 5 per cent deposit. Normally, buyers who put down less than 20 per cent are hit with lenders’ mortgage insurance, which can add tens of thousands of dollars to the cost. But under this plan, that insurance won’t be required. Instead, the government will step in and guarantee the rest of the deposit if things go wrong. It’s designed to cut down the time people spend saving and to bring the goal of owning a home a lot closer.
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Some important changes are being rolled out too. Previously, strict income caps and property price limits meant that many people—especially in expensive cities—were shut out. From October, those income caps will disappear altogether, and the property price caps are being lifted significantly. For example, in Sydney, the limit will jump from $900,000 to $1.5 million, while in Melbourne it’ll rise from $800,000 to $950,000, and in Brisbane from $700,000 to $1 million. That means more realistic options are finally on the table.
Treasury estimates show that about 20,000 extra guarantees will be taken up in the first year alone. And beyond helping people get into the market earlier, modelling suggests that buyers will also save thousands of dollars in rent by shaving years off the deposit-saving process. There may be a small bump in house prices over the long term, but only about half a per cent after six years.
Prime Minister Anthony Albanese says the earlier start is about helping young people and families achieve home ownership sooner, calling it a key election promise delivered ahead of time. Housing Minister Clare O’Neil added that it’s unacceptable for younger Australians to be locked out of the market for decades while paying off someone else’s mortgage.
That said, not everyone’s convinced it’s a game changer. Housing advocates point out that while the scheme might help up to 80,000 people, that’s still a drop in the ocean compared to the wider affordability crisis. Critics argue it eases the path for some, but doesn’t fix the broader issues of supply and skyrocketing prices.
Even so, the scheme is expected to make a real difference for thousands of first homebuyers starting this October, giving many their first genuine shot at breaking into the property market without waiting years on the sidelines. It’s not the entire solution, but for a lot of people, it’s a much-needed chance to finally call a place their own.
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