How to Buy Your First Home with Less Than 20% Deposit in 2025

Saving a 20% deposit for a home can be difficult - especially with rising property prices, living costs and tighter rental conditions. But the good news is that in 2025, first-home buyers in Australia still have several pathways to buy with a smaller deposit.

Here’s how you can get into your first home with as little as 5% saved, and what to consider along the way.

1. Government Schemes That Support Low-Deposit Buyers

The First Home Guarantee (FHBG) is one of the most effective ways to buy with a small deposit. Backed by the Australian Government and managed by Housing Australia, the scheme allows eligible first-home buyers to purchase with as little as 5% deposit and without paying lender’s mortgage insurance (LMI).

 In 2025, up to 35,000 places are available for the FHBG across the year. To qualify, you must:

• Be a first-home buyer or not have owned a home in the past 10 years
• Have a taxable income up to $125,000 for singles or $200,000 for couples
• Intend to live in the property
• Meet property price thresholds (which vary by region)

In October 2025, this was updated to:

• No place limits: all Australian first home buyers who have saved a 5% deposit can apply.
• No income caps: first home buyers with higher incomes can access the Scheme.
• Higher property price caps: to help home buyers where property prices have increased.
• Simpler access in regional areas: Regional First Home Buyer Guarantee will be replaced by the First Home Guarantee. 

This scheme can save buyers thousands in LMI costs, which typically apply when you borrow more than 80% of a property’s value. 

2. Family Guarantee or Parental Support

If you're not eligible for the First Home Guarantee, you may still be able to buy with less than a 20% deposit by using a family guarantee.

This involves a parent or close relative offering part of their own property as security for your loan, reducing your deposit requirement and helping you avoid LMI. You still remain responsible for the loan, but the added security can strengthen your application and improve your borrowing power. 

In many cases, lenders allow the guarantee to be released once the loan is paid down to 80% or less of the property’s value. 

3. Lenders That Accept 5% or 10% Deposits

Some banks and lenders accept deposits as low as 5%, even without government support or a family guarantee. However, you may need to pay LMI, a one-off insurance premium that protects the lender, not the borrower, if you default on the loan. 

While LMI can be costly, some lenders offer LMI discounts or waivers for certain professions (like nurses, teachers, and doctors) or income levels. 

At Regional Finance Solutions, we work with lenders across the market, many of whom offer flexible policies for low-deposit borrowers. 

4. Other Costs to Consider

When buying with less than 20% deposit, keep in mind the other upfront costs, such as:

• Stamp duty (though exemptions or concessions may apply for first-home buyers)
• Legal and conveyancing fees
• Building and pest inspections
• Loan establishment and bank fees 

A smaller deposit may also mean higher loan repayments, so it’s important to budget carefully and seek advice before proceeding. 

Ready to Get Started?

You don’t need to wait until you have a 20% deposit to own your first home. Whether you’re eligible for a government scheme or exploring family support, there are real options available right now. 

Speak to one of our mortgage experts today to find out what you qualify for and how we can help you take the first step towards home ownership, sooner than you think. 

Contact Regional Finance Solutions for a free, no-obligation discussion.