How to Buy a Home with Just 5 Per cent Deposit in South Australia

Updated September 2025

Buying your first home can feel overwhelming — especially when the deposit hurdle seems so high. But from 1 October 2025, the federal government’s First Home Guarantee (FHG) is expanding, making it easier for South Australians to get into the market sooner, with less out-of-pocket cost.

In this blog, we explain what the changes mean, how it works, and how you can benefit.

What is the First Home Guarantee?

The First Home Guarantee is a federal government initiative designed to help eligible first-home buyers purchase a property with as little as 5 percent deposit, without needing to pay Lenders Mortgage Insurance (LMI).

Normally, if your deposit is under 20 percent, most lenders require LMI — which can cost thousands. Under the FHG, the government acts as a guarantor on the remaining 15 percent, helping you avoid that cost and potentially enter the market years earlier.

What’s changing from 1 October 2025?

The updated scheme is being significantly expanded:

• Unlimited places — no more waiting or missing out

• No income caps — higher earners now eligible

• Broader eligibility — friends, siblings and singles can apply together

• Higher property price caps — updated to reflect current market

• More property types — including dual occupancies and granny flats

New South Australian price cap: $900,000

Under the new rules, eligible buyers in South Australia can purchase a property up to $900,000 using just a 5 percent deposit. That’s $45,000 — a much more achievable goal for many first-home buyers.

Example:

A couple with $45,000 saved could now look at homes in the $800K–$900K range, and avoid up to $30,000 in LMI costs, thanks to the government guarantee.

Who is eligible?

You may be eligible if you:

• Are a first-home buyer

• Are an Australian citizen or permanent resident

• Intend to live in the property

• Have at least a 5 percent deposit

• Are purchasing under the price cap for your area

Note: Even if you don’t meet the traditional income or relationship criteria, you may still qualify under the new guidelines. We can help you check.

Why this matters for Adelaide buyers

With property values rising steadily across metro and regional South Australia, getting into the market sooner can have long-term benefits — from avoiding future price growth to building equity earlier.

The new rules remove some of the biggest barriers first-home buyers face: long saving timelines, LMI costs, and income restrictions.

How Lendology can help

At Lendology, we’ve helped hundreds of South Australians navigate their first home journey. We’ll help you:

• Check if you’re eligible

• Understand what your budget can stretch to

• Explore lenders participating in the scheme

• Prepare your application with confidence

There’s no pressure. Just clear, caring support to help you make the right next step.

Ready to find out if you qualify?

We’re here when you’re ready to run the numbers or get pre-approval underway.