Canberra, April 12 — In a major election promise, Prime Minister Anthony Albanese has announced that every first home buyer in Australia will be eligible to purchase a home with just a 5% deposit, if the Albanese Government is re-elected.
The bold initiative aims to tackle Australia’s ongoing housing crisis and make it easier for young Australians to enter the property market.
Under the new scheme, the government will act as a guarantor for the remaining 15% of the deposit required by banks, allowing buyers to avoid costly Lenders Mortgage Insurance (LMI).
All first home buyers will qualify for the 5% deposit scheme, regardless of income.
No caps on the number of places or income limits.
Property price caps increased to reflect current market conditions.
A $10 billion investment will build 100,000 homes, exclusively for first home buyers.
For example:
In Sydney, a buyer could purchase a $1 million property with a $50,000 deposit.
In Queensland, a buyer could purchase an $850,000 home with a $42,500 deposit.
Prime Minister Albanese told news.com.au:
“When a young person saves a 5% deposit, my government will guarantee the rest with their bank. This will help people buy their first home faster without the burden of LMI.”
Housing Minister Clare O’Neil added:
“Young Australians are bearing the brunt of the housing crisis, and our government is stepping up to give them a fair go at home ownership.”
The government plans to work with states and developers to fast-track land release and planning approvals to construct 100,000 affordable homes starting from 2026-27, with residents moving in by 2027-28.
This investment will include:
$2 billion in direct grants
$8 billion in zero-interest loans or equity contributions
State governments will be required to match the $2 billion in grants.
Separate from the 5% deposit scheme, the Help to Buy program allows eligible low- and middle-income Australians to purchase homes with just a 2% deposit, with the government providing an equity contribution of up to 40% (for new homes) or 30% (for existing homes).
Recent updates to Help to Buy include:
Income caps raised to $100,000 for individuals and $160,000 for couples or single parents.
Property price limits increased to reflect average home prices in each city and region.
No rent will be charged on the government’s stake.
Buyers will repay the government share when they sell or refinance the home.
For example:
In Sydney, a first home buyer could purchase a home worth $1.3 million, with the government contributing up to $520,000. The buyer would only need a loan for $780,000 (minus their deposit).
In Hobart, a buyer could purchase a $700,000 home with a government equity of $280,000, reducing their mortgage to around $400,000.
To be eligible for Help to Buy:
Applicants must be Australian citizens aged 18 or over.
Annual income must be below $100,000 for individuals and $160,000 for couples.
Must have at least a 2% deposit.
Must meet standard home loan requirements.
Housing Minister Clare O’Neil said:
“This budget lifts our housing commitments to $33 billion. We’re taking on the housing crisis directly, with real solutions and serious investments.”
If re-elected, the Albanese Government will implement changes from January 1, 2026, following industry consultation.
