Major Aussie banks are set to abandon small-deposit home loans, making it even harder for first-home buyers to get on the property ladder.

According to a leaked Westpac briefing note to mortgage brokers, the bank will stop lending to buyers with deposits of less than 5%. This new policy will also apply to Westpac’s subsidiaries—St. George Bank, Bank of Melbourne, and the Bank of South Australia.

This new policy will be a major blow for first-home buyers, who currently need to save for an average of five years or more for the deposit. In Sydney, where median household incomes haven’t kept up with house prices, struggling first-home buyers need up to $180,000 to purchase the average home.

Previously, borrowers were able to obtain home loans with deposits as low as 1%, provided they had lenders mortgage insurance (LMI). Following the recent government crackdown aimed at curbing irresponsible lending, John Flavell, chief executive officer of Mortgage Choice, believes more lenders will follow Westpac’s lead and reduce their maximum loan-to-value ratios to avoid taking on customers deemed too risky.

“Many first homebuyers are finding it tough to save the deposit needed to get on to the property ladder, and these changes could potentially make it harder still,” Flavell said.

Sydney’s median house prices currently hover at $900,000—which means homebuyers will need a 20% deposit of $180,000 without paying LMI. Under Westpac’s new policy, those who add LMI will still need a minimum deposit of $45,000 to qualify.