Low-Deposit First Home Buyers Now Have $82,000 In Equity Have $82,000 In Equity
New data shows first home buyers who used the federal government’s 5% deposit scheme have built an average of $82,000 in home equity, despite rate rises and market swings. If you’re weighing up a first home buyer loan, the results suggest that buying sooner with a low deposit (and no LMI) can still stack up when the lending is structured well.
From $35k Deposit To $82k In Equity: How Buyers Got Ahead
New figures from the National Housing Finance and Investment Corporation (NHFIC), which administers the Home Guarantee Scheme (HGS), show that buyers who tapped the 5% pathway are now averaging $82,000 in equity.
Back in 2020, the average first-home deposit across the scheme was around $35,200 (rising to ~$36,400 by mid-2023), far below the broader market’s ~$159,000 average deposit. In short: the scheme allowed many to enter the market earlier with a smaller deposit, then build equity over time.
Key takeaway: Getting in with a 5% deposit (and avoiding LMI) can accelerate your timeline and still lead to meaningful equity, provided your first home buyer loan is matched to a sensible budget and long-term plan.
What is the Home Guarantee Scheme (HGS)?
Saving a 20% deposit is tough. The HGS helps eligible buyers purchase with a lower deposit without paying lenders’ mortgage insurance (LMI):
- First Home Guarantee (FHBG): Buy with as little as 5% deposit and no LMI.
- Regional First Home Buyer Guarantee (RFHBG): As above, focused on regional areas.
- Family Home Guarantee (FHG): Eligible single parents/guardians can purchase with 2% deposit and no LMI.
Each pathway has eligibility rules, property price caps, and participating lenders. A specialist broker can confirm which option fits your situation and location.
“Isn’t a low deposit risky?”
A lower deposit can increase sensitivity to interest rate changes and price movements. That’s why structure matters. We help first-time buyers mitigate risk by:
- Stress-testing repayments at higher rates
- Choosing the right loan features (offset/redraw) rather than chasing the lowest teaser rate
- Planning for ongoing costs (rates, insurance, maintenance)
- Mapping a refinance or extra-repayments plan once your equity improves
When done well, a first home buyer loan with a 5% deposit can be a practical stepping stone, not a trap.
Other Ways to Buy Sooner (beyond HGS)
If you don’t qualify for a place in the HGS, there are still pathways that can reduce time to keys:
- Family pledge / guarantor options: Use equity from a family property to reduce or eliminate LMI.
- Targeted state grants and stamp duty concessions: Depending on your location and property type.
- Co-borrower strategies: Where appropriate and sustainable.
- Financial coaching: A short plan to optimise savings, spending and credit score can shave months off your timeline.
Ready to Check Eligibility and Numbers?
A Quick Strategy Call Can Confirm:
- Which Hgs Stream You May Qualify For
- Your Borrowing Capacity and Repayments Under Different Rate Scenarios
- Whether a First Home Buyer Loan or An Alternative Pathway (e.G., Guarantor) Will Get You There Faster
- When a Future Loan Refinancing Could Help Reduce Repayments as Your Equity Grows
You could be in a place of your own by Christmas, if the numbers work for you.
FAQs
How much deposit do I really need as a first-home buyer?
With the First Home Guarantee, eligible buyers may purchase with 5% deposit and no LMI. Without a scheme or guarantor, most lenders prefer 10–20%, and LMI usually applies under 20%.
Can I use the HGS to build a new home?
In some cases, yes, subject to the relevant HGS stream, price caps, and lender policies (e.g., construction loans). A broker can confirm which lenders accept construction under the scheme.
What happens after I buy with 5%?
As your equity grows, you may consider refinancing to sharpen the rate or switch features. We’ll map a plan that aligns with your goals and risk tolerance.
Is a first home buyer loan only for new builds?
No. Eligible borrowers can purchase established properties or new builds, subject to the scheme’s rules and lender criteria.
Will using a broker cost me more?
Typically, our service is paid by the lender, not by you. Our role is to compare lenders, explain trade-offs, and structure the lending for long-term success.