The basic idea
Lenders usually ask for a 20% deposit to avoid lenders mortgage insurance (LMI), a one-off cost that protects the lender, not you. Government-backed guarantee schemes can let eligible buyers purchase with as little as 5% deposit without paying LMI, because the government guarantees part of the loan.
What usually decides eligibility
Schemes set rules around who can apply, property price caps that vary by location, and the number of places available. These details change, so always confirm them with Housing Australia and your state revenue office before relying on them.
What lenders still look at
A small deposit does not change the fundamentals. Lenders still assess income, living expenses, existing debts, savings history and credit file. A smaller deposit means a larger loan, so repayments and buffers matter even more.
Before you start
Work out what you can comfortably repay, not only what a lender might offer. Gather payslips, ID and savings history. Then talk to a broker about which lenders participate in the scheme and how their policies differ.