Buying Your First Home in Perth With a 5% Deposit: How It Works in 2026

For eligible first home buyers, the Australian Government 5% Deposit Scheme can make it possible to purchase a home with a minimum deposit of just 5%, without paying Lenders Mortgage Insurance.

In 2026, the scheme also has no income caps, no waiting list and unlimited places, making it available to a much broader group of buyers than earlier versions of the scheme.

For someone who has the income to manage a home loan but is struggling to save a huge deposit while paying rent, that can significantly change the timeline to buying.

Here's how it works.

What is the Australian Government 5% Deposit Scheme?

The scheme allows eligible first home buyers to purchase an owner-occupied property with a minimum 5% deposit.

The Australian Government provides a guarantee to the participating lender for part of the loan, which allows the eligible borrower to avoid paying Lenders Mortgage Insurance, or LMI.

You still borrow the money from a participating home loan lender.

The Government doesn't make your repayments for you, and you remain responsible for the home loan and associated costs.

How much is a 5% deposit in Perth?

Here's what 5% looks like at some common purchase prices:

These figures show the 5% deposit only.

They don't include other purchasing costs or account for any difference between the purchase price and the lender's valuation.

What's the property price limit in Perth?

Under the current Australian Government 5% Deposit Scheme, the property price cap for Western Australia's capital city and designated regional centres is $850,000.

Other areas of WA currently have a $600,000 cap.

The Government recommends confirming the applicable cap for the property's postcode with the participating lender.

For Perth buyers, this means properties up to $850,000 can potentially fall within the scheme, subject to all other eligibility and lending requirements.

Who is eligible for the 5% Deposit Scheme?

The current eligibility requirements include being:

• an Australian citizen or permanent resident
• at least 18 years old
• able to contribute the required minimum 5% deposit
• a first home buyer, or someone who has not owned property or land in Australia during the previous 10 years
• purchasing within the relevant property price cap
• buying the property to live in as an owner-occupier.

Applications can be made individually or jointly with one other person, who can be a partner, friend or family member.

The loan must also meet the scheme requirements, including generally being an owner-occupier Principal and Interest home loan with a participating lender.

Most importantly, scheme eligibility does not guarantee home loan approval.

You still need to satisfy the lender's credit policy, borrowing capacity and other assessment requirements.

Is there still an income limit?

No.

The Australian Government 5% Deposit Scheme currently has no income cap for eligible first home buyers.

This is an important difference from earlier versions of the government guarantee scheme, where income limits could prevent some first home buyers from participating.

It means the focus is now much more heavily on whether you meet the other eligibility requirements and can qualify for the loan itself.

Why is avoiding Lenders Mortgage Insurance important?

When borrowing more than 80% of a property's value, lenders may ordinarily require Lenders Mortgage Insurance.

LMI protects the lender, not the borrower.

Depending on the loan and lender, it can add a substantial extra cost to purchasing with a small deposit.

For eligible borrowers under the 5% Deposit Scheme, the Government guarantee allows participating lenders to provide the loan without requiring LMI.

That's one of the scheme's biggest benefits.

Do I still need money on top of my 5% deposit?

Usually, yes.

A 5% deposit doesn't necessarily mean your total savings requirement is exactly 5% of the property price.

You may still need to allow for:

• transfer duty where applicable
• settlement or conveyancing costs
• title and registration fees
• building and pest inspections
• lender fees where applicable
• settlement adjustments
• moving costs
• additional funds if the lender valuation is lower than the purchase price.

That's why we calculate a funds-to-complete position for first home buyers rather than simply multiplying the house price by 5%.

What about stamp duty for WA first home buyers?

This is where the 2026 WA changes can work particularly well alongside the 5% Deposit Scheme.

For eligible contracts entered into from 7 May 2026, first home buyers in WA pay:

• $0 transfer duty on new or established homes up to $600,000
• concessional duty from $600,001 to $800,000.

This can considerably reduce the additional cash required to purchase with a small deposit. For example, an eligible first home buyer purchasing a $600,000 home could potentially have:

Other purchasing costs would still need to be allowed for.

What happens between $600,000 and $800,000?

Eligible WA first home buyers don't suddenly lose all of their stamp duty assistance once the purchase price exceeds $600,000.

Instead, the concessional rate applies between $600,001 and $800,000 for qualifying transactions entered into from 7 May 2026.

This is worth understanding if you're deciding whether to offer slightly more on a property. A purchase at $625,000, $650,000 or $700,000 will have a different funds requirement from a purchase at $600,000.

Use our WA Stamp Duty Calculator to compare the different price points before you make an offer.

What if the property costs $850,000?

Here's where the different scheme thresholds matter.

A Perth first home buyer could potentially purchase a property up to $850,000 under the Australian Government 5% Deposit Scheme.

However, the WA first home buyer duty concession for transactions from 7 May 2026 only extends to homes valued up to $800,000.

So an $850,000 Perth property may potentially qualify for the federal 5% Deposit Scheme while being above the WA first home buyer duty concession threshold.

This is exactly why it's worth looking at all of the schemes separately rather than assuming they use the same limits.

Can I also get the $10,000 First Home Owner Grant?

Potentially, if you're buying or building an eligible new home.

The WA First Home Owner Grant is currently worth up to $10,000, with the property value cap increased to $800,000 in Perth and southern WA for eligible transactions commencing from 7 May 2026.

It isn't generally available for established homes.

That means an eligible first home buyer purchasing a qualifying new property could potentially combine several forms of support, provided the separate eligibility criteria are satisfied.

Do I have to buy a new home under the 5% Deposit Scheme?

No.

The federal scheme allows eligible buyers to purchase a range of property types, including houses, townhouses, apartments, house-and-land packages, off-the-plan properties and eligible building arrangements, subject to scheme requirements and property price caps.

So buying an established Perth home can still potentially qualify.

This is another important distinction between the 5% Deposit Scheme and the WA First Home Owner Grant.

Is buying with a 5% deposit always the best option?

Not necessarily.

A smaller deposit can help you buy sooner, but it also means you're borrowing more.

That generally means:

• a larger home loan balance
• higher repayments than if you contributed a larger deposit
• less equity in the property from day one.

On the other hand, waiting several more years to save a 20% deposit isn't automatically the best answer either.

The right decision depends on your income, savings, property budget, loan options and how comfortable you are with the repayments.

Rather than treating 5%, 10% or 20% as automatically right, we can compare them.

Should I use all my savings as my deposit?

Not always.

It's easy to focus on getting the home loan as small as possible and forget that life continues the day after settlement.

You may need money for:

• moving
• furniture and appliances
• unexpected repairs
• insurance
• rates and household expenses
• emergencies.

Keeping a sensible buffer can be just as important as reducing the loan balance.

A good first home buyer structure looks beyond settlement day.

What if I don't qualify for the 5% Deposit Scheme?

There may still be other options.

Depending on your circumstances, these could include:

• a standard low-deposit home loan
• using a larger deposit
• a Family Guarantee Home Loan
• using equity in a parent's property as additional security
• the Help to Buy shared-equity scheme, if eligible
• adjusting your purchase price.

The right solution depends on why the 5% Deposit Scheme isn't available to you.

How do I apply for the 5% Deposit Scheme?

You can't apply directly to Housing Australia.

Applications are made through a participating lender as part of the home loan application process.

That's where working with a mortgage broker can be helpful.

Rather than only asking, "Do I qualify for the scheme?", we can also look at:

• which participating lenders fit your circumstances
• borrowing capacity
• deposit requirements
• loan features
• estimated repayments
• funds required at settlement
• the other first home buyer assistance you may qualify for.

Want to buy your first home in Perth with a 5% deposit?

You may be closer than you think.

If you've been waiting until you save a 20% deposit before speaking with anyone, you don't have to. We actually prefer talking to first home buyers early.

Even if you're not quite ready yet, we can help you understand your borrowing capacity, your realistic purchase price and exactly how much you need to save.

Once you know the target, saving towards your first home becomes a lot clearer.

At Mesh Finance, we help first home buyers across Perth and WA understand their options and put a plan around getting into the market.