NSW13 January 2026Market Analysis

NSW Low Deposit Home Loans 2026: Buy with 5% Deposit

Complete guide to buying with a low deposit in NSW. Understand 5% deposit schemes, LMI, and strategies to buy sooner.

NSW first home buyers can purchase property with just 5% deposit (or even 0% with guarantor) thanks to government schemes like the First Home Guarantee. This means buying years earlier than the traditional 20% deposit requirement.

This guide explains all low deposit options in NSW, how to avoid or minimize LMI, and strategies to buy your first home sooner.

Low Deposit Options

First Home Guarantee: Buy with 5% deposit, no LMI (15,000 places annually)
Regional First Home Guarantee: Enhanced 5% deposit access for regional NSW
Guarantor Loan: 0% deposit using family guarantee, no LMI
Traditional 5-10%: Pay LMI ($10,000-40,000 depending on loan)
Professionals: Some lenders offer no LMI at 90% for professionals

First Home Guarantee Details

Eligibility: First home buyer, Australian citizen/PR, earn under $125,000 (single) or $200,000 (couple), buy under $800,000 in Sydney or $500,000 regional NSW

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Deposit Comparison: 5% vs 20%

Traditional 20% Deposit

$150,000

Required for $750,000 home

Saving Time (per year)	$30,000
Years to Save	5 years
LMI Cost	$0

5% Deposit (FHG)

$37,500

Required for $750,000 home

Saving Time (per year)	$30,000
Years to Save	1.25 years
LMI Cost	$0 (FHG)
Buy 3.75 Years Sooner!

Low Deposit Strategy

Check FHG Eligibility: Apply through participating lenders
Calculate Genuine Savings: Need minimum 3 months proven savings
Maximize Deposit: Every extra $1,000 reduces loan amount and interest
Consider Guarantor: If parents can help, avoid deposit entirely
Target Under Price Cap: $800,000 Sydney, $500,000 regional for FHG
Get Pre-Approval: Know exact borrowing capacity
Budget for Costs: Stamp duty (or exemption), conveyancing, inspections

Low deposit home loans make NSW property ownership accessible years earlier than traditional 20% deposits. With First Home Guarantee removing LMI, 5% deposit purchases are now safe and affordable for eligible first home buyers.

Ready to buy with a low deposit? Book a consultation to check eligibility and calculate exact deposit requirements.

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