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Kooky
Builder of Shaka, the payment router that pays every agent their commission on closing date.
About Kooky and Shaka →For most first buyers the hard part is not the repayments. It is the deposit. Lenders have long treated 20 per cent of the price as the line below which a borrower pays lenders mortgage insurance, a one-off premium that protects the bank, not the buyer. On a Brisbane home, 20 per cent is a six-figure sum that takes years to save while prices keep moving.
The Australian Government's 5% Deposit Scheme is built to remove that one obstacle. It lets a first buyer borrow with a deposit of 5 per cent and pay no lenders mortgage insurance, because the Government guarantees part of the loan. It is run by Housing Australia and delivered through banks and other participating lenders.
The scheme is national, but two of its settings are local: the price cap, which is set by state and by area, and the way it combines with each state's own grants and duty relief. This guide covers the scheme as it applies in Queensland in July 2026: what it is, what changed when it was expanded, the price caps for Brisbane and the rest of the State, who can use it, what a small deposit costs over time, and how it fits with Queensland's help for first buyers.
Australian Government first home buyers website and the scheme fact sheet published by the Commonwealth Bank, a participating lender, dated 1 July 2026.
A guarantee, not a payment
The first thing to understand is that nobody hands the buyer any money. The scheme is a guarantee given to the lender. Housing Australia's description of the arrangement is that the guarantee is "not a cash payment", and that it covers up to 15 per cent of the value of the property.
Related readPalm Island rent-to-buy scheme opens to its first ten householdsThe logic runs like this. A buyer with a 5 per cent deposit needs to borrow 95 per cent of the price. A lender would normally lend 80 per cent without insurance and insist on lenders mortgage insurance for the rest. Under the scheme, the Government stands behind the gap between the buyer's deposit and 20 per cent. The lender treats the loan as if the full deposit were there, and the insurance is not required.
Three consequences follow, and they are easy to lose sight of.
The buyer still borrows the whole 95 per cent, and repays all of it with interest. The guarantee is to the bank. It does not reduce the debt.
The buyer still has to qualify for the loan. The scheme changes the deposit a lender will accept, not the lender's assessment of income and spending. Housing Australia has noted that a lender may ask for a larger deposit depending on a borrower's financial circumstances.
And the buyer deals with a lender, never with the Government. Housing Australia does not take applications from the public. An application goes through a participating lender or a mortgage broker acting for one.
What changed on 1 October 2025
The scheme is not new. Before October 2025 it was called the Home Guarantee Scheme, with a First Home Guarantee as its main part. NAB, which says it has taken part since the scheme began in 2020, described the relaunch on 1 October 2025 as an expansion of that earlier scheme under the new name.
The expansion removed the features that had rationed it. Before, places were limited each year and applicants had to earn under an income cap. Housing Australia's page for the 2024-25 financial year listed 35,000 places for the First Home Guarantee and income limits of $125,000 for one applicant and $200,000 for two. The price caps were also lower.
Related readQueensland Budget keeps the $30,000 first home grant for four more years| Setting | 2024-25 | From 1 October 2025 |
|---|---|---|
| Income limit, one applicant | $125,000 | None |
| Income limit, two applicants | $200,000 | None |
| Places | 35,000 a year | Unlimited, no waitlist |
| Cap: Brisbane, Gold Coast, Sunshine Coast | $700,000 | $1,000,000 |
| Cap: rest of Queensland | $550,000 | $700,000 |
Housing Australia, First Home Guarantee settings for 2024-25; Australian Government first home buyers website and Commonwealth Bank scheme fact sheet dated 1 July 2026 for the current settings.
The Government's first home buyers website now sums the scheme up in three phrases: no income caps, no waitlists and no lenders mortgage insurance. For Queensland, the change in the caps mattered as much as the others. The Brisbane cap rose by $300,000 and the cap for the rest of the State by $150,000.
The Queensland price caps
Queensland is split into two zones. The higher cap, $1,000,000, applies to the capital city and to the State's two named regional centres, the Gold Coast and the Sunshine Coast. The lower cap, $700,000, applies everywhere else, from Toowoomba and Townsville to the smallest inland towns.
The cap is a limit on the price of the property, not on the loan. A home priced one dollar over the cap for its area is outside the scheme, whatever deposit the buyer has. The scheme's website offers a lookup tool that returns the cap for a given location, and that tool, not a map drawn from memory, is the way to check which side of a boundary a suburb falls on.
Only two Queensland regional centres carry the higher cap
The scheme fact sheet names the Gold Coast and the Sunshine Coast as Queensland's regional centres. Every other part of the State outside the capital, including the large coastal and inland cities, comes under the $700,000 cap.
How much of the market sits under those caps depends on where the buyer is looking. Mortgage broker Aussie, in an article of 29 April 2026, cited Cotality's home value index putting the median Brisbane dwelling at $1,101,151. A median is the middle of the market, so a $1 million cap in Brisbane takes in a little under half of all dwellings by that measure. Under the old $700,000 cap the scheme reached far less of the capital.
Related readFirst-buyer applications down 22.6% in Queensland as rates rise againWho is eligible
The eligibility rules are set out in the fact sheet that participating lenders publish for the scheme. Every applicant must be an Australian citizen or permanent resident and at least 18. The home must be in Australia, under the price cap for its location, and the applicant must intend to live in it as its owner. An investment property does not qualify.
A first home buyer, for the scheme's purposes, is someone who has not owned a home or land in Australia in the past 10 years. That is a wider door than the name suggests. A person who owned a home more than a decade ago and has rented since can apply as a first home buyer under this scheme, although the same person would not pass Queensland's tests for a first home duty concession or the First Home Owner Grant, which look much further back.
Applicants can apply alone or jointly with one other person, which is the fact sheet's wording.
The loan itself has conditions. It must be an owner occupier loan with principal and interest repayments, from a participating lender, with a term of up to 30 years. For a new build, the fact sheet allows up to three further years.
There is a second stream for single parents and legal guardians. They need a minimum deposit of 2 per cent, not 5. They must apply individually, with no joint application, and must not own another property once the purchase settles.
Which properties qualify
The scheme covers most forms of home a first buyer is likely to consider. The fact sheet lists houses, townhouses and apartments, house and land packages, off-the-plan purchases, and vacant land bought with a contract to build.
Related readQueensland first-buyer loans slip to 5,646 as their average size jumpsBoth new and existing homes are in. That is the scheme's main practical difference from Queensland's own help, most of which favours new construction. A first buyer set on an established house in an older suburb gets no First Home Owner Grant and, above $800,000, no first home duty concession, but can still use the 5% Deposit Scheme up to the cap.
Land alone is not enough. Vacant land qualifies when it comes with a building contract, because the scheme is for a home to live in.
What 5 per cent means in dollars
The saving in time is the scheme's whole point, and it is easiest to see at the caps.
Arithmetic on the Queensland price caps. Deposit only: transfer duty, legal fees and other purchase costs are separate.
At the Brisbane cap, the scheme cuts the deposit a lender needs from $200,000 to $50,000. In regional Queensland it cuts it from $140,000 to $35,000. A single parent using the 2 per cent stream needs $20,000 at the higher cap and $14,000 at the lower one.
The other side of the ledger is the loan. A buyer who puts down $50,000 on a $1 million home borrows $950,000. One who puts down $200,000 borrows $800,000. The first buyer owes $150,000 more from the first day, pays interest on it for as long as it is outstanding, and holds a much thinner slice of the home. If prices in the area slip, a 5 per cent stake can be used up quickly, which matters to anyone who may need to sell within a few years.
None of that argues against the scheme. It describes what the scheme trades: years of saving, and the insurance premium, against a larger debt. For a buyer whose income supports the repayments comfortably, that trade can be a good one. For a buyer stretching to the lender's limit, the guarantee makes the purchase possible without making it easier to carry.
Related readThe Queensland First Home Owner Grant: who qualifies and how to claimThe deposit is also not the only cash a buyer needs. Transfer duty, where it applies, conveyancing and the other costs of buying sit outside the 5 per cent.
How to apply
The process runs through the lender from beginning to end. The Government's first home buyers website sets out the stages and adds a time limit that surprises some buyers: once pre-approved under the scheme, a buyer has 90 days to find a property and sign a contract of sale.
- Check eligibilityThe online eligibility tool asks about citizenship, ownership history and the home.
- Check the price capThe lookup tool gives the cap for the suburb or town.
- Apply through a participating lenderDirectly or through a broker. The lender assesses the loan and reserves the guarantee.
- Find a home within 90 daysThe contract of sale must be signed inside that period.
- Settle and move inThe home must be the buyer's own residence, not an investment.
The lender will ask for more than the usual loan documents. The website lists the applicant's full name and date of birth, a Medicare number or PMKey number, proof of citizenship or permanent residency, and a completed Home Buyer Declaration form.
Because the 90 days start at pre-approval, the order of events matters. A buyer who is pre-approved long before being ready to look can run out of time. The website publishes separate information guides for first home buyers and for single parents, and those are the documents to read for the detail of that period.
How it fits with Queensland's own help
The scheme is federal and deals only with the deposit. Queensland's help comes from the State and deals with duty and, for new homes, a cash grant. The two can meet in the same purchase, and each keeps its own rules.
An existing home. Under the Queensland Revenue Office's first home concession, a first buyer pays no transfer duty on an existing home priced up to $700,000, and a reduced amount up to $800,000. The $700,000 cap for regional Queensland under the 5% Deposit Scheme happens to match the point where duty is still nil. A first buyer in a regional town at $700,000 can therefore need a $35,000 deposit and no duty at all. In Brisbane the picture changes above $800,000: the scheme still applies up to $1 million, but the first home duty concession has ended, and the Revenue Office's example of an $850,000 existing home shows duty of $24,100.
Related readHelp to Buy gets a third lender as Teachers Mutual Bank signs onA new home. A first buyer of a new home has paid no transfer duty since 1 May 2025, with no cap on the home's value, according to the Revenue Office. A new home valued under $750,000 can also attract the $30,000 First Home Owner Grant, which the State Budget of 23 June 2026 continued for contracts signed from 1 July 2026. The Revenue Office's conditions for both are personal as well as about the home, so each has to be tested separately from the federal scheme.
Shared equity. The Australian Government's Help to Buy scheme and Queensland's Boost to Buy are a different kind of help, in which a government takes a share in the home. The Help to Buy website says its applicants cannot be receiving assistance from other government schemes. A buyer weighing a guarantee against shared equity is choosing between them, and the lender is the one who can say which combinations are allowed for a particular purchase.
What the lending figures show
The expansion showed up quickly in the Australian Bureau of Statistics lending data. In its release of 11 February 2026, covering the December quarter of 2025, the Bureau reported that the number of first home buyer loans rose 6.8 per cent nationally to 31,783, and that the average first home buyer loan rose 8.5 per cent to $607,624, which it called a record increase. In Queensland, the number of first home buyer loans rose 6.4 per cent in the quarter.
The first surge did not last. The economics site MacroBusiness, writing on 14 May 2026 about the Bureau's March quarter figures, said the number of loans to first home buyers fell 4.3 per cent in the March quarter and their value fell 6.7 per cent to $17.9 billion, while staying above the level seen before the expansion.
The federal Housing Minister, Clare O'Neil, said in a statement on 12 May 2026 that more than half of first home buyers now use government support of one kind or another. The scheme has moved, in other words, from a rationed program to the ordinary route into a first home.
The questions to settle first
A Queensland buyer considering the scheme can sort most of it out with a short list.
- Have I owned a home or land in Australia in the past 10 years?
- Is the home in the Brisbane, Gold Coast and Sunshine Coast zone, with its $1 million cap, or in the rest of the State, with its $700,000 cap?
- Will I live in the home as its owner?
- Does my income support a loan of 95 per cent of the price, on a principal and interest basis, in the lender's assessment?
- Is the home new or existing, and what does that mean for Queensland duty and the grant?
- Am I ready to sign a contract within 90 days of pre-approval?
The scheme answers the deposit question and leaves the rest where it was. The price still has to be paid, the loan still has to be serviced, and Queensland's duty rules still depend on the kind of home and its price. What has changed since October 2025 is who can use it: there is no income test, no queue, and a cap in Queensland's capital that now sits close to the middle of the market.
Kooky, from Shaka
Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.
