From October 2025, the Federal Government expanded its First Home Buyer Guarantee into the Australian Government 5% Low Deposit Scheme, allowing all eligible first home buyers to purchase with only a 5% deposit. Under the scheme, the government acts as a guarantor on up to 15% of the home loan, which means buyers can avoid costly lenders mortgage insurance (LMI). Importantly for Victorian first home buyers, the eligible property price cap in Melbourne has been raised from $800,000 to $950,000. For example, a $950,000 home in Melbourne now requires a deposit of only $47,500 (5% of the purchase price). The scheme also removed all previous income caps and participants limits, so any Australian citizen over 18 buying their first home can apply.
Key Benefits of the Low Deposit Scheme
- Minimum Deposit (5%) - You only need a 5% deposit of the property value. The government guarantees 15% of the loan, so no LMI is required. Perfect for first home buyers in Victoria looking for a low deposit home loan.
- Property Price Cap - In Victoria, eligible properties can be up to $950,000 for Melbourne (and higher caps in regional areas). Check the exact cap for your area with the official tools.
- No Income or Allocation Limits - Any income level qualifies, and there's no limit on how many buyers can access the scheme.
- What You'll Pay - Besides the 5% deposit, first buyers must still cover costs like stamp duty, legal fees, and inspections. Note that in Victoria many first homeowners building new homes are eligible for a $10,000 State grant and stamp duty exemptions or concessions up to $750,00, which can further reduce upfront costs.
Tools and Resources for First Home Buyers
The Australian Government provides helpful online tools and guides for the 5% Low Deposit Scheme. These resources cover first home buyer incentives 2025 and help you check eligibility, price caps and lender options. Visit the First Home Buyers website to:
- Check Eligibility - Use the quick eligibility tool to see if you meet the main criteria. firsthomebuyers.gov.au
- Find Your Price Cap - Look up the price cap for your location to confirm eligible properties. firsthomebuyers.gov.au
- Read FAQs and Guides - Download detailed guides and FAQs covering the scheme rules and application steps. firsthomebuyers.gov.au
- Apply through a Lender - Once ready, contact a participating lender who can submit your application to Housing Australia.
These resources help demystify the process so you can confidently plan your home purchase under the new scheme.
Victorian State Incentives for First Home Buyers
Remember that Victoria also offers first-home incentives on top of the federal scheme. Eligible buyers building or buying a new home valued up to $750,000 can receive a $10,000 First Home Owner Grant. Additionally, Victoria provides a stamp duty relief: full exemption on homes up to $600,000 and a concession on homes up to $750,000. Combining these state benefits with the 5% deposit scheme can significantly lower your upfront costs.
JG King Homes' Low Deposit Incentive for First Home Buyers
To complement the 5% Low Deposit Scheme, JG King Homes is offering Victorian first-home buyers an exclusive deposit incentive on both titled and unregistered land builds. Under this offer, you only need to pay $7,000 upfront at contract signing (split as $2,000 on signing and $5,000 at the contract stage) – far less than the normal 5% deposit. For example, on a $250,000 build contract (where 5% deposit would be $12,500), JG King requires just $7,000 up front, with the remaining $5,500 due when the home’s slab is poured. This means you can secure your new home with minimal outlay and enjoy the freedom of a delayed final deposit.
- Available on both titled and unregistered land
- Reduces up-front costs - Pay $2,000 to reserve your contract, $5,000 at signing, and defer the rest of your deposit until slab pour.
- No extra fees - Aside from your standard contract, there are no hidden charges until construction begins.
This special offer combines with the 5% Low Deposit Scheme to make buying your first home in Victoria more affordable than ever. To learn more about this incentive and begin your home-building journey with JG King Homes, contact one of our new home advisors today.
