Family Home Guarantee: How the 5% Deposit Scheme works for single parents

But the scheme comes with strict requirements around who can apply, property price caps, and lender participation.

It can also appear confusing. After all, single parents using the scheme only need a 2% deposit, not the 5% the name suggests (and that first home buyers must bring to the table).

Single parents can also access the scheme if they've previously owned a home, as long as they don't own another property at the time they settle on the home bought using the scheme.

Below, we'll break down exactly how it works, who qualifies, and what you need to know before applying. 

What is the 5% Deposit Scheme?

Through the scheme, eligible applicants can take out a home loan to buy a property with a deposit of just 5% of the purchase price (2% for single parents and guardians), without paying costly lenders mortgage insurance (LMI). That could save thousands of dollars and help you get into the market sooner.

The 5% Deposit Scheme was previously called the Home Guarantee Scheme and used to house three separate guarantees, including the Family Home Guarantee.

The scheme is administered by Housing Australia and now offers unlimited places.

How does the 5% Deposit Scheme work?

The 5% Deposit Scheme helps a home loan borrower avoid LMI by having the government act as guarantor of their loan.

Basically, the government promises a participating lender that, if a homebuyer using the scheme defaults on their mortgage and the lender can't recoup all its funds by selling the property, the government will hand over as much as 18% of the loan's value.

It's essentially a win-win for all involved. Homebuyers can avoid LMI, lenders get an extra layer of security, and the government rarely has to pay out funds. In fact, as of mid-2024, just 0.1% of active scheme participants were behind on their mortgage repayments and only one claim had been paid out in the scheme's history.

Let's backtrack for a second. You might have picked up on the words 'participating lender'. Around three dozen lenders participate in the scheme at the time of writing, including CommBank, Westpac, and NAB. Unfortunately, borrowers turning to a lender that doesn't participate in the scheme won't be able to access it.

How do I apply for the 5% Deposit Scheme as a single parent?

You can't simply apply directly for the 5% Deposit Scheme.

Instead, you'll have to reach out to a participating lender or a mortgage broker who works with at least one participating lender (don't worry, most will). When you apply for a home loan through a participating lender, it will assess to see if you're eligible for the scheme. If you are, it will submit an application on your behalf.

Be aware, while many lenders and brokers likely understand the 5% Deposit Scheme for first home buyers, some may not be across the separate eligibility rules for single parents and guardians.

If you're knocked back despite being sure you're eligible, don't be afraid to advocate for yourself or seek a second opinion.

5% Deposit Scheme single parent eligibility criteria

To be eligible for the 5% Deposit Scheme as a single parent, you must meet these conditions at the time of your home loan application:

1. Must be a parent or guardian to a dependent child

If you're a natural or adoptive parent of a dependent child or dependent children, you've passed the key eligibility hurdle for the 5% Deposit Scheme.

Eligibility for the scheme also includes guardians of dependent children who aren't the parents of said children. So, if you're responsible for grandchildren, nieces or nephews, or are part of a blended family, you might be able to access the scheme too.

The definition of 'dependent child' and 'dependent children' also offers some important wiggle room. As per Housing Australia, a dependent child is a person who:

• Is under the age of 16, lives with you, and who you are legally responsible for at least part of their day-to-day care, welfare, and development
• Is between 16 and 22 years old, lives with you, is wholly or substantially dependent on you, and who doesn't earn more than $14,370.55 per financial year (effective 1 January 2025), or
• Is 16 years or older, lives with you, and receives a disability support pension

2. Must be single

The second key eligibility criteria an applicant must meet is being single.

By definition, this means you don't have a spouse or a de facto partner. You're considered to have a spouse if you live with someone on a genuine domestic basis, as a couple.

Housing Australia does not consider a person who is separated but not divorced as single.

3. Must be an Australian citizen or permanent resident

This criterion must be met on your home loan date.

4. Must have a deposit of at least 2% but no more than 20%

To access the scheme, a homebuyer needs to have scraped together at least 2% of their property's purchase price.

That means if you were to buy a $500,000 property, you'd need to have at least $10,000 saved.

However, homebuyers with a deposit of more than 20% are ineligible for the 5% Deposit Scheme.

5. Property price thresholds

The maximum property prices are the same for all applying to the 5% Deposit Scheme.

Price caps vary across state and territories and differ depending on whether a buyer is purchasing in a capital city, regional centre, or elsewhere.

Here's how price caps stand across the country as of October 2025:

• New South Wales (NSW)
  • Sydney: $1,500,000
  • Illawarra, Newcastle, and Lake Macquarie: $1,500,000
  • Other areas: $800,000

• Victoria
  • Melbourne: $950,000
  • Geelong: $950,000
  • Other areas: $650,000

• Queensland
  • Brisbane: $1,000,000
  • Gold Coast and Sunshine Coast: $1,000,000
  • Other areas: $700,000

• Western Australia
  • Perth: $850,000
  • Other areas: $600,000

• South Australia
  • Adelaide: $900,000
  • Other areas: $500,000

• Australian Capital Territory (ACT): $1,000,000
  
  
• Northern Territory (NT): $600,000
  
  
• Jervis Bay Territory & Norfolk Island: $550,000
  
  
• Christmas Island & Cocos (Keeling) Islands: $400,000

6. Must not already own a home

You must not currently own a home. You may still qualify if you've previously owned a home.

7. Must live in the home you're buying or building

You must move into the home you're buying with help from the Home Guarantee Scheme within six months of your home loan settling (if buying an existing home) or your occupancy certificate being issued (if you're building or buying off-the-plan).

If you don't move into the property you're purchasing within the set timeframe, you might be forced to pay for LMI or face other fees from your lender.

8. Must make principal and interest repayments on your mortgage

Finally, you must make principal and interest repayments on your home loan to remain eligible. Though, there are some exceptions for those building a new property with help from a construction home loan.

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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers:

Important Information and Comparison Rate Warning

Important Information and Comparison Rate Warning

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