If saving a 20% deposit felt like running a marathon in sand, the 5% deposit scheme might help. While the scheme has contributed to a significant price increase on entry level homes over the last few months, it is still a viable pathway to home ownership for most.
Since October 2025, any first home buyer can purchase with just a 5% deposit and skip Lenders Mortgage Insurance, with no income limits and no cap on how many people can access it. In plain terms: the government goes guarantor on part of your loan so the bank does not penalise you for having a smaller deposit. In Brisbane, that means buying a $1 million home with $50,000 saved, avoiding roughly $42,000 in insurance costs you would otherwise pay.
Since saving for a deposit using the share market has just been made at least 30% less effective by the budget's CGT changes, let's look at alternatives. One that most people overlook is combining it with the First Home Super Saver Scheme.
Think of it this way. Every dollar you save in a regular account gets taxed at your income rate first. The FHSS lets you save inside super instead, where contributions are taxed at just 15%, usually well below what you pay on your salary. You can put in up to $15,000 a year and $50,000 total, then pull it out when you are ready to buy. The government even applies a 30% tax offset when you withdraw, so you end up paying less tax overall than if you had saved the same money in a bank account.
For couples, it gets even better. Two buyers can each access their own FHSS savings toward the same property, potentially putting $100,000 of tax-advantaged savings to work on one purchase.
The strategy, then, is straightforward: start FHSS contributions now via salary sacrifice, let the tax savings accelerate your deposit, then use the 5% guarantee to enter the market sooner than a traditional savings plan would allow.
One word of caution for higher earners: if your income exceeds $250,000, an extra 15% tax can apply to super contributions, which chips away at the FHSS benefit significantly. Worth checking before you commit. Start early, know your property price cap for your area, and critically, make sure you can actually afford the repayments on a 95% loan before signing anything, because repayments on a $950k loan, at 6.34% interest, are approximately $5,780 per month.
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