5% Deposit Scheme: How Much Do You Really Need to Buy a First Home in Perth?
“You only need a 5% deposit to buy your first home.”
I hear that line from first home buyers in Perth almost every week. It’s true, but it isn’t the whole story. The 5% deposit scheme has made buying a home possible for thousands of Australians. What catches people out is the gap between the 5% deposit and the total cash they need on settlement day.
In this guide I’ll cover how the scheme works in 2026, what it costs to buy in Perth, and how to work out your own number before you start looking.
What is the 5% Deposit Scheme?
The Australian Government 5% Deposit Scheme is part of the Home Guarantee Scheme. You may still see it called the First Home Guarantee or the First Home Loan Deposit Scheme. It lets eligible first home buyers purchase with as little as 5% deposit without paying lenders mortgage insurance (LMI).
Normally, a bank charges LMI when you borrow more than 80% of the property’s value. With a 5% deposit, LMI can easily cost $20,000 or more. Under the scheme, the Government guarantees up to 15% of the loan to the lender, so the LMI cost disappears.
The scheme was expanded on 1 October 2025, and it’s now more accessible than ever:
- No income caps. Your salary no longer rules you out.
- No limit on places. There’s no waitlist and no scramble for spots.
- Higher property price caps.
Who is eligible for the 5% Deposit Scheme?
To qualify, you must:
- be 18 or older
- be an Australian citizen or permanent resident
- not have owned property or land in Australia in the past 10 years
- buy the home to live in as an owner-occupier (not as an investment)
- take a principal and interest loan
- apply through a participating lender
Single parents and guardians can apply for the related Family Home Guarantee, which requires only a 2% deposit.
What is the price cap for the 5% Deposit Scheme in Perth?
| Location | Property price cap |
| Perth | $850,000 |
| Regional WA | $600,000 |
So, is it really just 5%?
No. The 5% is your minimum deposit. On top of it, you need to cover buying costs:
- Stamp duty (transfer duty), which depends on your purchase price
- Settlement agent fees, usually $1,200 to $2,000 in WA
- Building and pest inspections, around $400 to $800
- Government registration fees for the transfer and mortgage
- Loan establishment or application fees, depending on the lender
- Moving costs, connections and a buffer for the unexpected
The good news for Perth buyers is that WA stamp duty concessions changed significantly in 2026.
If you’re trying to estimate the upfront amount you may need, Financehub Co’s mortgage and property calculators can also help you get a clearer starting point for borrowing capacity, repayments and property fees.
Stamp duty for first home buyers in WA (from 7 May 2026)
From 7 May 2026, the WA Government lifted the first home owner stamp duty thresholds:
- Full exemption up to $600,000. You pay no stamp duty on a new or established home valued up to $600,000.
- Concessional rate from $600,001 to $800,000. Duty is charged at $16.15 for every $100 above $600,000.
- Full duty above $800,000. Standard rates apply.
- Vacant land exemption up to $450,000. There is a concessional rate up to $550,000.
This is a major change. Many first home buyers in Perth’s outer suburbs can now buy with zero stamp duty, which can save them tens of thousands of dollars.
Real Perth examples: how much cash do you need?
Here’s what the numbers look like at three price points. Other costs are estimated at $4,000.
| $600,000 home | $700,000 home | $850,000 home | |
| 5% deposit | $30,000 | $35,000 | $42,500 |
| Stamp duty | $0 | $16,150 | approx. $37,300 |
| Other costs (est.) | $4,000 | $4,000 | $4,000 |
| Total cash needed | $34,000 | $55,150 | approx. $83,800 |
| As % of price | 5.7% | 7.9% | 9.9% |
Under $600,000, a 5% deposit is close to the true figure. At the $850,000 Perth cap, you need nearly double the deposit in total cash, mainly because of stamp duty.
My tip: know which band you’re buying in before you start searching. A $20,000 difference in purchase price can mean a much larger difference in the cash you need upfront.
Can I use the 5% Deposit Scheme with the First Home Owner Grant?
Yes. In WA, the First Home Owner Grant of $10,000 is available for eligible buyers purchasing or building a new home. For homes south of the 26th parallel, which includes all of Perth, the value cap is now $800,000. Established homes don’t qualify.
You can stack three benefits together:
- 5% Deposit Scheme, which removes LMI
- Stamp duty exemption or concession
- $10,000 First Home Owner Grant on a new build
For a first home buyer building in Perth’s growth corridors, the combined savings can be substantial.
Is the 5% Deposit Scheme worth it?
For most first home buyers, yes. It gets you into the market years earlier and saves you the LMI cost. There are some trade-offs to understand:
- A bigger loan means bigger repayments. Borrowing 95% of the price means paying interest on more debt.
- You still have to pass serviceability.The lender will assess your income, expenses and debts, and the scheme doesn’t change your borrowing power.
- You start with less equity. If prices dip in the short term, your buffer is thin.
- You must live in the property. It can’t be rented out as an investment while you’re in the scheme.
The alternative is saving for a 20% deposit. For many Perth buyers that means buying property now or waiting in 2026 while prices keep rising. The right choice depends on your income, savings and plans, which is exactly the conversation I have with clients every day.
Frequently asked questions
Do I pay LMI with a 5% deposit?
Not under the 5% Deposit Scheme. Outside the scheme, yes, and it can cost $20,000 or more.
Are there income limits for the 5% Deposit Scheme?
No. Income caps were removed on 1 October 2025.
How much deposit do I need for a first home in Perth?
The minimum is 5%, but plan for 5.5% to 10% of the purchase price once stamp duty and costs are included, depending on your price range.
Can I use a guarantor instead?
Yes. A guarantor home loan, usually backed by a parent’s property, can let you borrow up to 100% of the price. It’s another option worth comparing.
Your next step: find out your real number
Every buyer’s situation is different. Your deposit, borrowing power, purchase price and eligibility for grants all affect what you need. The fastest way to get clarity is a quick chat with a broker who knows the Perth market.
Before you start making offers, you can also use Financehub Co’s borrowing capacity and repayment calculators to get an initial estimate of your numbers. The calculators are intended as a guide, so your individual circumstances still need to be assessed by a finance professional.
At Financehub Co, we help first home buyers across Perth work out their numbers, choose the right scheme and get pre-approved with a participating lender. The chat is obligation-free.
📅 Book your home loan chat: www.financehubco.com.au
📞 Call Edy Hartono: 0452 520 430
✉️ Email: edy@financehubco.com.au
