5% Deposit Scheme 2025: What Sunshine Coast First-Home Buyers Need to Know
By Leigh Martinuzzi | Martinuzzi Property Group – eXp Australia
Buying a home has never been easy and the real hurdle has always been saving a large enough deposit.
But from 1 October 2025, that’s changing. The Federal Government’s expanded 5% Deposit Scheme gives eligible Australians a faster, more achievable path to home ownership.
It’s big news for Sunshine Coast locals, where lifestyle demand and steady price growth have made it increasingly difficult for first-time buyers to break in. Here’s how the scheme works, who’s eligible, and how to make the most of it.
What is the 5% Deposit Scheme?
The 5% Deposit Scheme, officially called the First Home Guarantee, allows eligible buyers to purchase a property with as little as 5% deposit without having to pay Lenders Mortgage Insurance (LMI).
Normally, banks require a 20% deposit to avoid LMI, which can easily add $10,000–$20,000 or more to upfront costs. Under this scheme, the Australian Government acts as guarantor for the remaining 15%, effectively removing the need for that insurance.
This means buyers can get into a home years sooner, without needing to save hundreds of thousands before applying for a loan.
What’s Changing from October 2025
The new updates coming into effect make the scheme more flexible and accessible than ever.
Here’s what’s new:
- No more income caps – Previously, singles earning above $125,000 or couples above $200,000 didn’t qualify. Those limits are now gone.
- Higher property price caps – Reflecting current market prices, thresholds have been lifted. For example:
- Brisbane: up to $950,000
- Sunshine Coast and Gold Coast: up to $900,000
- Unlimited scheme places – No more fighting for limited spots; if you meet the criteria, you can apply anytime.
You must be an Australian citizen or permanent resident, aged 18 or over, and planning to live in the property as your home (not as an investment).
Why it matters for Sunshine Coast buyers
Saving a 20% deposit for a $900,000 home on the Coast means coming up with $180,000. Not to mention stamp duty and other costs.
Under the new scheme, you’d only need a $45,000 deposit. That’s a life-changing difference, cutting saving times from 8–10 years down to around 2–3 years for most households.
For single parents, there’s even better news: you may qualify with as little as 2% deposit under the Family Home Guarantee.
For many locals, it could mean finally buying near work, schools, or the beach and not being pushed further inland.
How it could shape the Sunshine Coast market
The scheme is expected to increase buyer activity across Australia, especially in regional lifestyle areas like the Sunshine Coast where demand is already high.
With easier access to finance, more first-home buyers will be competing for entry-level homes. Think Buderim, Palmwoods, Nambour, and Aura potentially pushing up prices in that segment.
However, it also gives locals the chance to buy sooner rather than later, before further price growth widens the gap.
Things to Watch out for
While the scheme offers a huge helping hand, it’s not without risks. Here are a few things to keep in mind:
- Smaller deposit = bigger loan
A 5% deposit means borrowing 95% of the property’s value. You’ll pay more in interest over time, so make sure repayments fit comfortably within your budget. - Don’t overextend
With income limits gone, it’s tempting to stretch your budget. But your lender will assess your borrowing power carefully, and you should too. Leave room for rate rises or life changes. - Eligibility rules
You must not have owned a home in the past 10 years (unless you’re a single parent). Make sure you check all details with your lender or mortgage broker before applying. - Still need strong financial planning
Even without LMI, you’ll still pay regular mortgage repayments, council rates, and insurance. It’s smart to build an emergency buffer or use an offset account to reduce risk.
Smart Strategies to Get the Most out of it
✔ Get pre-approval early
Participating lenders will assess your eligibility and borrowing capacity. Having pre-approval means you can move quickly when you find the right home.
✔ Target strategic suburbs
Look for suburbs under the price cap but with long-term growth potential. Areas like Palmwoods, Baringa, or Woombye often offer better value than coastal centres.
✔ Build a financial safety net
Even a small offset or savings account can help protect against interest rate increases or unexpected costs.
✔ Seek professional guidance
Talk to your mortgage broker or trusted real estate professional that’s where we come in!). A local perspective can help you buy smart and avoid overpaying.
My Final Take
The 5% Deposit Scheme is a major step forward for aspiring homeowners especially here on the Sunshine Coast, where lifestyle and affordability rarely go hand in hand.
It’s designed to help people get into their first home sooner, with less saving, less stress, and more flexibility. But it’s important to plan carefully, understand your financial comfort zone, and make informed decisions.
If you’re thinking about buying your first home or want to understand what you could afford under the new rules, reach out anytime. We can walk you through the process, share insights into local suburbs, and connect you with trusted mortgage partners who can help you take the next step.
👉 Book a chat today to find out what the 5% Deposit Scheme could mean for your home-buying journey.
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