The 5% deposit scheme for couples in Victoria

Still being told you need 20% saved before you can buy? For most couples buying their first home in Melbourne, that isn't true any more. Here's how the 5% deposit scheme works when there are two of you.

By Jacob Williams · Updated 7 October 2026

first home buyers settled: 156first home buyers settled
median starting deposit: $52kmedian starting deposit
bought in Werribee: 67bought in Werribee

What the scheme does

The federal 5% deposit scheme (it used to be called the First Home Guarantee) lets you buy with a deposit of 5% instead of 20%, without paying lenders mortgage insurance. The government guarantees the rest of the gap to the lender. On a $650,000 home, that's $32,500 down instead of $130,000, and no LMI bill on top.

What changed for couples

Since 1 October 2025 there's no income cap and no limit on places. Couples earning over $200,000 together used to miss out. Now they don't. That matters a lot in the west, where plenty of the couples I help earn between $150k and $250k together.

The price cap where you're buying

The home has to be under the scheme's price cap. In Melbourne and Geelong that's $950,000. Every suburb in the west, from Footscray out to Melton, uses the Melbourne cap.

Who qualifies when you buy together

You're both Australian citizens or permanent residents.
Neither of you has owned property in Australia in the last 10 years.
You're going to live in the home.
You've got at least 5% of the price saved, and a lender on the scheme approves the loan.

If one of you has owned before, talk to me first. There are still ways through it, but the rules change.

How it stacks with Victorian savings

This is where it gets good for couples in the west. On top of the 5% scheme:

Stamp duty: first home buyers pay none up to $600,000, and a reduced amount up to $750,000.
First Home Owner Grant: $10,000 if you're buying or building a brand new home up to $750,000.

A couple buying a new townhouse in Tarneit for $640,000 could put down 5% ($32,000), pay a reduced stamp duty, skip LMI and get $10,000 back from the grant. That's general maths, not a quote. Your numbers depend on the property and the lender.

What it doesn't do

It doesn't lower the loan you can get. You still need to borrow 95% of the price, so the lender has to be happy with both your incomes and your spending. That's why I'd always start with what you can borrow.

What I've seen

Of the 156 first home buyers I've helped settle, 81% were couples. The median deposit when they started was $52k, nowhere near 20%.