A client asked me last month: "So under the 5% deposit scheme, the government pays 15% of our home… right?"

Not quite. And the difference really matters.

Since 1 October 2025, the scheme (now the Australian Government 5% Deposit Scheme) has no income caps, no limit on places, and a $1.5 million price cap for Sydney. That's opened the door for a lot of Inner West buyers who were previously locked out.

But here's what it actually does: the government guarantees part of your loan to the lender, so you skip Lenders Mortgage Insurance.

It's not a grant.

No one hands you cash.

You still borrow up to 95% of the purchase price… and you repay every dollar of it.

That means a bigger loan, bigger repayments, and less equity on day one. The lender will still test whether you can service it, and so should you. A 5% deposit gets you in the door sooner, but it doesn't build in a buffer; that part is still your job.

The takeaway: the scheme changes when you can buy, not what you can afford. Before you chase the price cap, work out the repayment and buffer that fit your life — then let the property follow the strategy.

MyMortgageConcierge #InnerWest #Sydney #Homebuyer #FirstHomeBuyer

My Mortgage Concierge is licensed under ACL 392736 Sattout Accounting Services Pty Ltd. General information only — seek personal advice before acting.