You don’t need a 20% deposit. You might be closer than you think.

Most first-home buyers anchor to the old rule: 20% down, or you can’t play. No wonder it feels out of reach. Cotality and ANU’s latest Housing Affordability Report found it now takes a record 11 years to save a 20% deposit on a typical Australian home, and 16.7 years for a Sydney house.

But between government support and a hand from family, plenty of people with 5% saved are already in a position to buy. The question isn’t “have I saved enough?” It’s “how do the pieces I already have fit together?” That is a different question, and for a lot of people it has a much better answer.

You wouldn’t be unusual in getting help, either. Money.com.au’s 2026 survey found 46% of Australians had help from the Bank of Mum and Dad to buy their first home.

Under the Australian Government 5% Deposit Scheme (previously known as the First Home Guarantee), eligible first-home buyers can buy with as little as a 5% deposit and no Lenders Mortgage Insurance (LMI), because the government guarantees part of the loan to the lender. According to firsthomebuyers.gov.au, the scheme has helped more than 320,000 Australians since 2020.

It has also opened up. Since 1 October 2025 there are no income caps and no limits on places. Property price caps still apply, and they’re higher than many people assume: $1.5 million in Sydney, $1 million in Brisbane and Canberra, $950,000 in Melbourne, $900,000 in Adelaide and $850,000 in Perth. Caps are lower outside the capitals and major regional centres, and the lender’s valuation has to fit under the cap too.

The other rules are fairly simple. You need to be an Australian citizen or permanent resident aged 18 or over, buying alone or with one other person, with no property owned in Australia in the last 10 years, and you need to move in within six months. Single parents and legal guardians can buy with 2% down.

Avoiding LMI can save thousands. It isn’t a discount on the price of the house. It is a cost you simply don’t pay. Combine the scheme with family help in the right way and it can be the difference between buying this year and waiting three more.

One scheme rule changes how you use family money. If your savings plus family help reach 20% or more after you’ve covered stamp duty and other costs, you can’t use the scheme. That’s usually fine, because at 20% you generally won’t pay LMI anyway. So rather than simply stacking on top, family help gives you options worth comparing:

• Top up to 5%. If you’re a little short, family help gets you to the scheme’s minimum, and the guarantee does the rest.
• Cover the costs. The scheme helps with the deposit, not stamp duty, legal fees or other purchase costs. Family money can cover those so your own savings stay in the deposit.
• Borrow less inside the scheme. LMI is already waived between 5% and 20%, so extra family money shrinks the loan and your repayments instead.
• Go to 20% and buy outside it. At a full 20% you usually avoid LMI anyway, with no scheme price cap to fit under.

Which suits you depends on the price, the location, your income and how the family money is structured. The scheme also expects you to put as much of your own savings as possible towards the deposit, and not to move money around just to fit the rules. And a gift and a loan can look very different to a lender, which comes back to gift vs loan.

The picture is easiest to see with numbers. Each example assumes family help arrives as a documented $40,000 gift. (Illustrative, not advice. Excludes stamp duty, legal and other purchase costs. Price caps checked October 2026; confirm at firsthomebuyers.gov.au.)

A $600,000 apartment in a capital city. Say you’re buying on your own and have $30,000 saved. That’s 5%, so under the scheme you could borrow $570,000 with no LMI. If your parents add $40,000, your deposit becomes $70,000 (11.7%) and the loan drops to $530,000. You’re still under 20%, so the scheme still applies and there’s still no LMI. You just owe $40,000 less. $600,000 fits under the cap in every capital city.

An $800,000 house for a couple. Say you and your partner have $40,000 saved between you, which is 5%. Under the scheme that can be enough to buy in Sydney, Melbourne, Brisbane, Perth, Adelaide or Canberra with no LMI, borrowing $760,000. If family adds $40,000, the deposit becomes $80,000 (10%) and the loan drops to $720,000. You still use the scheme, but you borrow less. This price is over the cap in Hobart, Darwin and much of regional Australia.

A $1,000,000 house in Sydney, Brisbane or Melbourne. 5% is $50,000, and the loan would be $950,000. With $40,000 from family, the deposit becomes $90,000 (9%) and the loan $910,000. In Sydney or Brisbane that’s within the cap, so the scheme still applies. In Melbourne it isn’t, and outside the scheme a 9% deposit would normally mean paying LMI. There, the options worth comparing are family help that moves you towards the full 20% ($200,000), or a family guarantee, where your parents offer part of their home’s equity as security.

If you’ve got around 5% saved and any family help on the table, you’re worth a proper look right now, not in two years. The next step is to confirm three things: your eligibility, your real borrowing capacity, and the cleanest way to combine the two. Eligibility is a rules question. Borrowing capacity is an income question. How the family money is structured is a documents question.

Most hold-ups at this stage are avoidable: family money that lands the week before you apply (many lenders like to see part of your deposit held for around three months), or a family loan that trims your borrowing because it wasn’t written up the way your lender needed. Either can mean a delay or a smaller loan than you wanted. Both are easy to head off early.

Price caps and eligibility rules move, so being close this year isn’t the same as being close next year. That is the whole argument for checking now rather than saving on in the dark.

Real situations are messier than the examples above. Whether you can buy now depends on things an article can’t see: the price and location you’re looking at, your income and debts, how much family help is on the table and in what form, and whether you’re better off inside the scheme or outside it.

That’s what a conversation with Fledge is for. It’s free and confidential, and we come back to you within 24 hours. We look at the whole picture with you and help you work out what’s realistic. For a 5% buyer with family help, that usually covers:

• whether your target price and location sit under the scheme’s cap
• which use of the family money suits you best: topping up, covering costs, borrowing less, or reaching 20%
• whether the money should be a gift or a loan, and what a lender will want in writing
• what needs to be in place before you apply, and in what order

You leave knowing what matters for you, what to decide, and what order to do it in, before any money moves. If now isn’t the right time, we’ll tell you that too. When you’re ready, we introduce you to a mortgage broker who can check your eligibility and borrowing with the lenders that offer the scheme.

It’s free because the specialists we introduce may pay us a referral fee if you choose to work with them. That never costs you anything, and it never changes who we recommend. You can start without any paperwork or numbers.

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