The Australian Government 5% Deposit Scheme & The Help To Buy Scheme
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What are the Australian Government 5% Deposit Scheme and Help to Buy Scheme?
Today, I want to talk to you about the home buying schemes and incentives, and there's two of them, just to unpack it. And we'll go through kind of in a fair bit of detail. So at the end of this episode, you'll get a really good idea about the help to buy scheme. and the 5% deposit scheme. I will say before we do get into it, this episode is sponsored by the Australian government. Full details can be found in the episode description. It's worth noting as well that since the 2026 federal budget, there have been no changes announced either since the federal budget or during the federal budget to these schemes, right? So the status quo remains. So what we're going to do, I'm going to go through each of the two schemes.
Then, and this is the cool part, at the end of my little presentation here, and this is best watched on YouTube, but if you're not watching it on YouTube, you'll actually be able to hear it as well. Like there's no major graphs or diagrams that you need to see. I'm just using the presentation to kind of guide me through so I can cover all bases. And then I'm After I've done this presentation, it's really cool. I'll play two interviews with people who have used the schemes. And the second one, like the last one that we'll play, that's the interesting one because I won't spoil it, but the types of people that are using these schemes, it's not always what you think. My name is Glenn James, and you are listening to Money, Money, Money, and we're going to unpack the two home buying schemes.
Let's do it right now. Okay, let's cover the 5% deposit scheme. This is really cool. 312,000 people have already used this scheme since 2020. So a couple of things on the scheme. This scheme has been around for a long time. It's helped a lot of people and it really got some expansion at the end of last year. They did a heap of changes. So all the information we're going to talk about. is um current and when it comes to government schemes a couple of things because over time schemes develop right and sometimes when we see online there'll be um comments from people that talk about stuff that isn't accurate um Because it's been updated, right? So number one, always make sure that you look at the government website on the scheme whenever you are listening to this to get the most up-to-date information because things change and we don't want old wives' tales getting out there.
The Australian government 5% deposit scheme supports eligible buyers to purchase a home sooner with as little as a 5% deposit without paying lender's mortgage insurance. So effectively what happens is – and I'll give you an example on the next slide. Traditionally, when you go and buy your first home, if you do not have a 20% deposit – you will need to buy or pay for lender's mortgage insurance. So you might be able to borrow 90%, save 10%, and then you might have to also pay thousands of dollars for lender's mortgage insurance. This scheme here stops you from having to pay for lender's mortgage insurance and And the government steps in and provides the guarantee that the lender's mortgage insurance would provide.
So at the moment, one of the main changes that were off the back of last year, there are no annual income caps. So you can earn as much as you like. There's also no wait list. There are now unlimited places. Again, the old stuff on different schemes, people think, oh, I might have to earn under this or there's only so many spaces. Categorically, it's now uncapped and there's no wait list. So that is awesome. Let me run through the actual eligibility, and these are the nuts and bolts. So it's for first home buyers, including those who have not owned a property or land in Australia in the last 10 years. That's really helpful because if you've been in a relationship in years gone by and then you haven't owned, you are kind of treated as a first home buyer after that 10 years.
There's also a carve out here following on the last 10 years in terms of previous owners. Single parents or legal guardians who do not hold any property interest or could be divesting property interest at a settlement.
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