5% Deposit Options

Buy Your Home With 5% Deposit and Zero LMI

Two proven paths let you skip the 20% deposit barrier and avoid Lenders Mortgage Insurance entirely — the Australian Government's First Home Guarantee or a professional LMI waiver. Whether you're a first home buyer or an experienced professional upgrading, this guide covers every option available in 2026.

5% Minimum deposit needed

$60K+ Potential LMI savings

$0 LMI to pay

Check Your Eligibility Free, 60 Seconds

Free, no obligation Result in 60 seconds 50+ lenders compared

4.9

Google Reviews

How Much Does LMI Cost on a 5% Deposit?

Lenders Mortgage Insurance at 95% LVR is the most expensive tier of LMI you can pay. On a $1 million property with a 5% deposit, LMI typically costs between $28,000 and $38,000 — and most borrowers add it to their loan balance, increasing both the amount they owe and their monthly repayments.

LMI protects the lender (not you) if you default on your home loan. It's required whenever you borrow more than 80% of a property's value. At 95% LVR, the premium is significantly higher than at 90% or 85% LVR because the lender's risk exposure increases with each percentage point above 80%.

When LMI is capitalised (added to your loan), you also pay interest on the premium for the life of the loan. On a $33,000 LMI premium at 6.5% over 30 years, that's an additional ~$42,000 in interest — making the true cost of LMI roughly double the upfront premium.

5% Deposit: What Could You Save on LMI?

Compare the cost of buying with 5% deposit — with and without an LMI waiver.

Property Price	Loan Amount	LMI (Without Waiver)	LMI (With Waiver)
$600,000	$570,000	$17,100 – $22,800	$0
$800,000	$760,000	$24,300 – $32,300	$0
$1,000,000	$950,000	$33,200 – $42,750	$0
$1,500,000	$1,425,000	$60,500 – $71,250	$0

$600,000

Loan: $570,000

Without waiver

$17,100 – $22,800

With waiver

$800,000

Loan: $760,000

Without waiver

$24,300 – $32,300

With waiver

$1,000,000

Loan: $950,000

Without waiver

$33,200 – $42,750

With waiver

$1,500,000

Loan: $1,425,000

Without waiver

$60,500 – $71,250

With waiver

We compare 50+ lenders to find you the best LMI waiver

Two Ways to Buy With 5% Deposit and No LMI

There are two distinct paths to purchasing a home with just a 5% deposit and zero Lenders Mortgage Insurance in Australia. Each serves a different buyer profile.

Feature	First Home Guarantee (Gov)	Professional LMI Waiver
Who qualifies	First home buyers (or haven't owned in 10 years)	Qualifying professionals (any buyer)
Income limit	No income cap (removed Oct 2025)	Typically $150K+ (varies by lender)
Property price caps	Yes — varies by state	No property price caps
Available places	Unlimited (from Oct 2025)	Unlimited — lender policy, not a scheme
Investment property	No — owner-occupier only	Some lenders allow investment
How LMI is avoided	Government guarantees 15% of loan	Lender waives LMI based on profession
Application process	Through participating lenders	Through any broker or lender offering waivers
Best for	First home buyers in any profession	Professionals (first buyer or not)

Who qualifies

First Home Guarantee (Gov)

First home buyers (or haven't owned in 10 years)

Professional LMI Waiver

Qualifying professionals (any buyer)

Income limit

First Home Guarantee (Gov)

No income cap (removed Oct 2025)

Professional LMI Waiver

Typically $150K+ (varies by lender)

Property price caps

First Home Guarantee (Gov)

Yes — varies by state

Professional LMI Waiver

No property price caps

Available places

First Home Guarantee (Gov)

Unlimited (from Oct 2025)

Professional LMI Waiver

Unlimited — lender policy, not a scheme

Investment property

First Home Guarantee (Gov)

No — owner-occupier only

Professional LMI Waiver

Some lenders allow investment

How LMI is avoided

First Home Guarantee (Gov)

Government guarantees 15% of loan

Professional LMI Waiver

Lender waives LMI based on profession

Application process

First Home Guarantee (Gov)

Through participating lenders

Professional LMI Waiver

Through any broker or lender offering waivers

Best for

First Home Guarantee (Gov)

First home buyers in any profession

Professional LMI Waiver

Professionals (first buyer or not)

Many first home buyers in qualifying professions can potentially access both options and should compare which offers better loan terms for their situation.

Not Sure Which Path Is Right for You?

Our free eligibility check compares both government and professional waiver options in 60 seconds.

Check Your Eligibility — Free

1 Government Scheme

Path 1 — First Home Guarantee (Government Scheme)

The First Home Guarantee is an Australian Government initiative administered by [Housing Australia](https://www.housingaustralia.gov.au/).

The First Home Guarantee (formerly the First Home Loan Deposit Scheme) allows eligible first home buyers to purchase a property with as little as 5% deposit. The government guarantees the remaining 15% gap between the borrower's deposit and the 80% LVR threshold — meaning no Lenders Mortgage Insurance is required.

The guarantee does not give you cash or a grant. The government acts as a guarantor for the portion of the loan between 80% and 95% LVR. You still repay the full loan amount.

Major Changes from October 2025

No income caps — The previous limits of $125,000 (individuals) and $200,000 (couples) were removed entirely
Unlimited places — No annual cap on the number of guarantees available (previously limited to 35,000 per year)
Higher property price caps — Thresholds were increased across all states and territories
Expanded eligibility — Permanent residents and individuals who haven't owned property in the past 10 years can now access the scheme

Property Price Caps by State (2026)

You can only use the First Home Guarantee for properties below these thresholds:

State/Territory	Capital City & Major Regional	Rest of State
NSW	$1,500,000	$800,000
VIC	$950,000	$650,000
QLD	$1,000,000	$700,000
WA	$850,000	$600,000
SA	$900,000	$500,000
TAS	$700,000	$550,000
ACT	$1,000,000	N/A
NT	$600,000	N/A

NSW

Capital City

$1,500,000

Rest of State

$800,000

VIC

Capital City

$950,000

Rest of State

$650,000

QLD

Capital City

$1,000,000

Rest of State

$700,000

Capital City

$850,000

Rest of State

$600,000

Capital City

$900,000

Rest of State

$500,000

TAS

Capital City

$700,000

Rest of State

$550,000

ACT

Capital City

$1,000,000

Capital City

$600,000

Price caps current as of February 2026. Capital city thresholds also apply to designated regional centres — check Housing Australia for the full list of included areas.

Who Can Apply

Be an Australian citizen or permanent resident aged 18+
Be a first home buyer, or not have owned property in the past 10 years
Intend to live in the property as your primary residence
Purchase below the price cap for your state and location
Apply through a participating lender (most major banks and many smaller lenders participate)

Limitations to Consider

First home buyers only — If you've owned property in the last 10 years, you cannot access the scheme
Owner-occupier only — No investment properties
Property price caps apply — In high-cost areas like Sydney's Inner West or Melbourne's inner suburbs, many properties exceed the caps
Limited lender choice — Only participating lenders can offer the guarantee, which may not include the lender with the best rate
No refinancing benefit — The guarantee is for purchases only and does not transfer if you refinance

2 Professional Waivers

Path 2 — Professional LMI Waivers (5% Deposit)

A lender policy that exempts borrowers in certain professions from paying LMI — even when borrowing above 80% LVR.

A professional LMI waiver is a lender policy (not a government program) that exempts borrowers in certain professions from paying Lenders Mortgage Insurance. Select lenders waive LMI for professionals they consider lower credit risk based on income stability, career trajectory, and historically low default rates.

Unlike the government scheme, professional LMI waivers have no property price caps, no limited places, and are available to both first home buyers and existing homeowners. At 95% LVR, a professional waiver saves exactly the same amount as the government guarantee — the full LMI premium — but with fewer restrictions.

Not a first home buyer?

Professional LMI waivers are available to any qualifying professional — upgraders, downsizers, and second home buyers included. The government scheme is not available to you, but a professional waiver offers the same savings with no restrictions on purchase history.

Professions eligible at 95% LVR (5% deposit)

Profession	Min Income	Max LVR	Key Requirement
Medical Doctors	$150,000+	95%	AHPRA registration
Dentists	$150,000+	90–95%	AHPRA registration
Lawyers	$150,000+	90–95%	Admitted to practice
Accountants	$150,000+	90–95%	CA/CPA membership

Medical Doctors 95%

$150,000+ AHPRA registration

Dentists 90–95%

$150,000+ AHPRA registration

Lawyers 90–95%

$150,000+ Admitted to practice

Accountants 90–95%

$150,000+ CA/CPA membership

Professions typically eligible at 90% LVR (10% deposit)

Profession	Min Income	Max LVR	Key Requirement
Engineers	$100,000+	90%	Engineers Australia membership
Nurses & Midwives	$80,000+	90%	AHPRA registration
Teachers	$80,000+	90%	State registration
Police Officers	$80,000+	90%	Sworn officer status
IT Professionals	$100,000+	90%	Relevant qualifications
Paramedics	$80,000+	90%	AHPRA registration

Engineers 90%

$100,000+ Engineers Australia membership

Nurses & Midwives 90%

$80,000+ AHPRA registration

Teachers 90%

$80,000+ State registration

Police Officers 90%

$80,000+ Sworn officer status

IT Professionals 90%

$100,000+ Relevant qualifications

Paramedics 90%

$80,000+ AHPRA registration

LVR limits vary between lenders. A mortgage broker can identify the best option for your specific situation.

See the full list of eligible professions

Why Professional Waivers Can Be Better Than the Government Scheme

No property price caps — Buy a $2 million property in Sydney with 5% deposit if you qualify
Not limited to first home buyers — Upgraders, downsizers, and professionals buying their second or third property can all access LMI waivers
Investment property options — Some lenders extend LMI waivers to investment purchases for certain professions (typically at lower LVRs like 85-90%)
Full lender choice — You're not restricted to participating scheme lenders, so you can shop for the best rate across the entire market
Stackable with government benefits — First home buyers can use a professional LMI waiver AND claim the First Home Owner Grant, stamp duty concessions, and other state-based benefits

Which Path Is Right for You?

Your ideal path depends on three factors: whether you're a first home buyer, whether you're in a qualifying profession, and the property price you're targeting.

First home buyer, NOT in a qualifying profession

Your path: First Home Guarantee

This is exactly what the government scheme was designed for. As long as your target property is below the price cap for your state, you can buy with 5% deposit and zero LMI.

First home buyer AND a qualifying professional

Your path: Compare both options

You're eligible for both the government scheme and a professional LMI waiver. Compare interest rates, loan features, and borrowing power across both options — the best choice depends on the specific lender offers available to you.

NOT a first home buyer, qualifying professional

Your path: Professional LMI waiver

The government scheme isn't available to you (unless you haven't owned property in 10+ years). A professional LMI waiver lets you buy with 5% deposit and no LMI regardless of your purchase history.

NOT a first home buyer, NOT a qualifying professional

Your path: Alternative options

Consider a guarantor home loan, saving to a 10% or 15% deposit to reduce LMI costs, or refinancing to remove LMI if you already have a loan with LMI attached.

How Much Could You Save? Real-World Examples

See what real savings look like for different buyer profiles across Australia.

Dr Sarah

First home buyer, GP in Sydney

Property $1,200,000 apartment

Location Parramatta, NSW

Deposit 5% ($60,000)

Loan $1,140,000 at 95% LVR

LMI Without Waiver

~$48,000

You Save

$48,000

This property exceeds the NSW regional price cap of $800K but is below the Sydney cap of $1.5M. Sarah qualifies for both the government scheme and a professional waiver and should compare rates.

James

Upgrader, Senior Lawyer in Melbourne

Property $1,100,000 house

Location Essendon, VIC

Deposit 5% ($55,000)

Loan $1,045,000 at 95% LVR

LMI Without Waiver

~$44,000

You Save

$44,000

James already owns an apartment, so the government scheme is not available. His professional LMI waiver has no property price cap restrictions.

Emma

First home buyer, Teacher in Brisbane

Property $750,000 townhouse

Location Chermside, QLD

Deposit 10% ($75,000)

Loan $675,000 at 90% LVR

LMI Without Waiver

~$10,100

You Save

$10,100

Teachers typically qualify at 90% LVR, not 95%. Emma could also use the First Home Guarantee at 5% deposit ($37,500) since the property is below the $1M QLD cap.

Use our LMI savings calculator for your numbers

Other Ways to Avoid LMI With a Low Deposit

If you don't qualify for the First Home Guarantee or a professional LMI waiver, these alternatives can help.

Guarantor Home Loans

A family member (usually a parent) uses equity in their own property as additional security for your loan. This can allow you to borrow up to 100% of the property value — sometimes even including purchase costs — with zero LMI. The guarantor doesn't make repayments, but their property is at risk if you default.

Family Pledge or Gift Deposit

Some lenders accept gifted deposits from family members to help you reach the 20% threshold. While this doesn't technically waive LMI, it eliminates the need for it by reducing your LVR to 80% or below. Lenders have specific policies about gifted funds.

Save to a Higher Deposit Level

If a 5% deposit incurs LMI that no waiver can remove, consider whether saving to 10% or 15% is feasible. LMI costs drop significantly at each threshold — from ~$33,000 at 95% LVR to ~$8,000 at 90% LVR on a $1M property.

Explore 10% deposit options

What You Need to Buy With 5% Deposit

Beyond the deposit itself, here's what lenders assess when you apply.

Genuine Savings

Most lenders require your 5% deposit to include genuine savings — funds you've accumulated over at least 3 months. This demonstrates financial discipline and reduces the lender's risk.

Regular savings account balances
Term deposits
Shares or managed funds held for 3+ months
Equity in an existing property
Tax refunds and bonuses (if held for the required period)

Additional Purchase Costs

Your 5% deposit covers the property price only. You'll also need funds for stamp duty (varies by state, first home buyers may be exempt), conveyancing/legal fees ($1,500-$3,000), building and pest inspections ($500-$1,000), loan application fees ($0-$600), and registration and transfer fees ($200-$500). Budget approximately 2-5% of the property price for these costs on top of your deposit.

Credit and Employment Requirements

Lenders assess your ability to service the loan. At 95% LVR, expect stricter scrutiny.

Credit history — Clean file with no defaults, judgments, or missed payments
Employment stability — Typically 6-12 months in current role
Debt-to-income ratio — Total debts relative to your gross income
Living expenses — Verified through bank statements and the Household Expenditure Measure (HEM)

How to Buy With 5% Deposit and No LMI

Three steps to getting into your own home sooner.

Check Your Eligibility

Enter your profession, income, and borrowing target. We'll instantly show which lenders let you buy with 5% deposit and zero LMI.

We Find Your Best Option

We compare lenders that offer 5% deposit LMI waivers for your profession — looking at rates, fees, borrowing power, and approval speed.

Move Into Your Home

Your loan settles with just 5% deposit and zero LMI. No extra insurance costs, no waiting years for a bigger deposit — just your new home.

Professional LMI Waiver Eligibility Requirements

Employment in a recognised qualifying profession
Registration with the relevant professional body (AHPRA, Law Society, CPA Australia, etc.)
Minimum income threshold met (varies by lender and profession, typically $150,000+)
At least 5% of the property value as genuine savings
Clean credit history with no defaults or adverse events
Property must be standard residential (not rural, commercial, or high-density small apartments)
Owner-occupier purpose (for 95% LVR — investment may be available at lower LVRs)

First home buyers can potentially access both the government scheme and a professional waiver. We compare all options to find the best fit for your situation.

5% Deposit No LMI FAQs

Common questions about buying with a 5% deposit and no LMI.

Do I have to pay LMI with a 5% deposit?

Normally, yes. Any home loan above 80% LVR requires Lenders Mortgage Insurance. However, two pathways let you avoid it entirely: the Australian Government's First Home Guarantee (for eligible first home buyers) and professional LMI waivers (for qualifying professions). Both allow you to purchase with just 5% deposit and pay zero LMI.

How much is LMI on a 5% deposit home loan?

At 95% LVR, LMI typically costs 4-5% of the loan amount. On a $600,000 property with a $570,000 loan, expect $17,000-$23,000. On a $1 million property with a $950,000 loan, expect $33,000-$43,000. When capitalised onto the loan, the true cost increases further due to interest charged on the premium over the loan term.

Can I buy with 5% deposit if I'm not a first home buyer?

Yes — if you're in a qualifying profession. Professional LMI waivers are available to any eligible professional, regardless of whether you've previously owned property. Doctors, dentists, lawyers, and accountants can typically access 95% LVR (5% deposit) with no LMI through select lenders. The government's First Home Guarantee is only available to first home buyers (or those who haven't owned in 10+ years).

What's the difference between the First Home Guarantee and a professional LMI waiver?

The First Home Guarantee is a government program where Housing Australia guarantees 15% of your loan, removing the need for LMI. It's only for first home buyers and has property price caps. A professional LMI waiver is a lender policy that waives LMI for certain professions — no property price caps, no buyer restrictions, and available through any lender that offers waivers. Both achieve the same result: 5% deposit, zero LMI.

Who is eligible for the First Home Guarantee in 2026?

Since October 2025, the scheme is open to Australian citizens and permanent residents who are first home buyers or haven't owned property in 10 years. Income caps were removed entirely, and places are now unlimited. You must buy below the property price cap for your state and live in the property as your primary residence.

Can I combine the First Home Owner Grant with an LMI waiver?

Yes. The First Home Owner Grant (FHOG) and LMI waivers operate independently. First home buyers can claim their state's FHOG (typically $10,000-$30,000 for new builds), receive stamp duty concessions, AND have their LMI waived through a professional waiver — maximising all available benefits simultaneously.

What counts as genuine savings for a 5% deposit?

Genuine savings are funds accumulated over at least 3 months. Accepted sources include regular savings, term deposits, shares or managed funds, and equity in existing property. Tax refunds and work bonuses usually qualify if held for the required period. Some lenders also accept rental payment history as evidence of savings capacity. Gifts from family may be accepted by certain lenders, though policies vary.

Can I use a 5% deposit for an investment property?

The government's First Home Guarantee is strictly owner-occupier only. Professional LMI waivers for investment properties are available through some lenders, but typically at lower LVRs (85-90%) rather than 95%. If you're a qualifying professional looking to invest, explore other deposit options or contact our team to discuss your situation.

What are the property price caps for the First Home Guarantee?

Property price caps vary by state and location. As of 2026, the caps for capital cities are: NSW $1,500,000, VIC $950,000, QLD $1,000,000, WA $850,000, SA $900,000, TAS $700,000, ACT $1,000,000, and NT $600,000. Regional areas have lower caps. These were significantly increased from October 2025 to better reflect market prices. Professional LMI waivers have no property price caps.

Is it risky to buy with only 5% deposit?

Buying at 95% LVR means you have less equity buffer if property values decline. However, Australia's major capital cities have shown long-term capital growth, and the risk is mitigated if you plan to hold the property for 5+ years. The key risk to manage is ensuring your repayments are comfortably affordable — at 95% LVR, your loan amount and monthly repayments are higher than with a larger deposit.

How long does it take to get approved for a 5% deposit home loan?

Pre-approval typically takes 1-5 business days. Full approval after finding a property takes 3-10 business days depending on the lender and complexity of your application. Professional LMI waivers are applied during the standard approval process — there's no separate application or additional waiting time.

Can I get a 5% deposit home loan if I'm on probation?

It depends on your profession and lender. Some lenders accept borrowers on probation if they're in a qualifying profession with a signed employment contract. Medical professionals transitioning between hospital positions, for example, are often assessed favourably due to the stability of the medical profession. Each lender has different policies — we compare 50+ lenders to find those that will accept your employment situation.

Other Deposit Options

Explore other ways to save on Lenders Mortgage Insurance.

10% deposit

10% Deposit No LMI

Buy a home with just 10% deposit and pay zero LMI. Professionals save $8,000 to $35,000+. Compare 20+ lenders, check eligibility in 60 seconds.

Learn more 15% deposit

15% Deposit No LMI

Buy your home with a 15% deposit and pay zero Lenders Mortgage Insurance. The widest lender choice, best rates, and maximum flexibility for qualifying professionals.

Learn more 5% deposit

95% LVR No LMI

Medical professionals and select occupations can borrow 95% LVR with zero LMI. Save $20,000 to $60,000+. Compare lenders and check eligibility free in 60 seconds.

Learn more

Ready to Save Thousands on Your Home Loan?

Find out if your profession qualifies for an LMI waiver. It's free, takes 60 seconds, and there's no obligation.

Check Your Eligibility

Free • 60 seconds • No credit check

The information on this page is general in nature and does not constitute financial advice. LMI waiver eligibility, savings estimates, and loan terms vary between lenders and are subject to individual assessment. LMI cost estimates are indicative only, based on typical Helia and QBE premium schedules for owner-occupier P&I loans. Property price caps for the First Home Guarantee are current as of February 2026. Deposit requirements exclude purchase costs (stamp duty, legal fees, etc.). Always obtain personalised advice before making financial decisions.