Australian Government 5% Deposit Scheme
Are you eligible for a home loan with a low deposit of just 2% or 5% and no Lenders Mortgage Insurance (LMI)? Talk to a home loan specialist to see how Westpac could help you into your new home sooner.
Fast-track your home ownership dreams
Low deposit
Shave years off the usual time it would take to save, with a low deposit of 2% or 5%.
No LMI
No Lenders Mortgage Insurance (LMI) means you could save thousands.
Sweet rate
Benefit from interest rates normally reserved for deposits of 20% or more.
No income caps
Unlimited spots and no waiting lists.
Explore these two pathways
First Home Buyers
Minimum 5% deposit and no LMI
You are: Eligible first home buyer purchasing a home sooner.
Single Parents
Minimum 2% deposit and no LMI
You are: Single parent or single legal guardian with at least one dependent child.
Talk to a home lending specialist
Book an appointment and a home loan specialist will call you back, answer questions or match you with a Westpac lender. They’ll arrange a meeting by phone, video, in branch, or at a venue of your choosing.
Frequently asked questions
Lenders Mortgage Insurance (LMI) won’t apply if your loan is supported by the Australian Government 5% Deposit Scheme. However, you may still want to understand what it is. LMI is a charge that most lenders require if a home loan deposit is less than 20%. This protects the lender if you can’t repay the loan. It can either be added to your loan or paid upfront.
As you don’t need to pay LMI if you’re part of the Scheme, you’ll make significant savings.
There are two parts to a home loan balance:
- The principal amount: is how much you have borrowed.
- The interest: is an amount your lender charges you based on your principal. Your interest rate is a percentage of your principal. The interest is calculated daily and added to your balance every month.
That means if you’re making principal and interest repayments you’re paying off the following:
- The amount you borrowed (the principal)
- The interest
- Any fees.
By the end of the loan term (up to 30 years), you’ll have repaid the amount borrowed and the total interest owed. Your home will then be mortgage-free.
More about home loan repayments
We calculate your interest in two steps.
First, we multiply the balance on your loan by your interest rate and divide by 365 days in a year. This shows your daily interest charges.
We then add together your daily interest charges for every day in each month, which produces the monthly interest charge shown on your statement.
Finally, we divide this up according to your preferred repayment frequency, whether that’s weekly, fortnightly or monthly. This figure is your repayment amount.
If your loan balance was $500,000 with an interest rate of 4.93% p.a. and monthly repayments, the calculation might look like this:
500,000 x 0.0493 / 365 = $67.53 interest per day
$67.53 x 30 days in September = $2,026 interest for September
You can use our Mortgage Repayment Calculator to estimate repayments and interest charges over the life of a loan. You can also use the calculator to check the effect that extra repayments could have on your home loan.
Planning to use an offset account? Calculate how much interest you could save.
Variable interest rate
With a variable rate home loan, your rate changes in line with market interest rates. Choose from our basic loan and standard home loan with offset. You could get ahead on your home loan with no cap on extra repayments and no associated break costs.
Fixed interest rate
With a fixed rate home loan, your rate won’t change over your 1-5 year fixed rate period. This also means it won’t be affected by interest rate rises during this time. With a fixed rate you'll know exactly what your interest rate and repayments will be throughout your fixed rate loan term.
Split your home loan
You could get the best of both worlds. Split your balance into separate variable and fixed rate loan amounts.
Compare home loans and our interest rates
Many things affect how fast you can pay down your home loan balance, and how much interest you'll pay.
Extra repayments. The simplest way to pay off your loan sooner is to make additional repayments. These repayments are on top of the repayments you’re obliged to make. Bear in mind, if you have a fixed rate with us, you can only make up to $30,000 in additional repayments. If you make more than the allowed $30,000 during the fixed rate period, break costs will apply.
Repayment type. There are two parts to your home loan balance, the principal (what you borrowed) and the interest (what the bank charges to lend you the money). It makes sense that paying off both will save you money in the long run. As part of the conditions of the Australian Government 5% Deposit Scheme, you'll need to pay principal and interest repayments (P&I). Monthly, fortnightly or weekly repayments. Read more about repayment types.
Monthly, fortnightly or weekly repayments. Repayment frequency can make a difference over time. Just by choosing fortnightly over monthly repayments is the equivalent of making one extra repayment per year.
Offset. If you link an offset account to your Rocket variable home loan, depositing your savings into this account will help to reduce the interest payable on your principal. Calculate how much you could save with an offset account.
Home Insurance (or Building insurance) covers structures and fixtures at your home. It includes your:
- Garage
- Fences
- Paved driveways
- Hot water system
- Air-conditioner.
Contents Insurance covers personal belongings at your home, including your:
- Furniture
- Carpet
- Appliances
- Clothing
- BBQ
- Outdoor furniture
- Kid’s play equipment.
Yes, it could affect your eligibility as during the entire period that the Scheme is in place, you must:
- Continue to live in the purchased property as an owner-occupied property
- Make principal and interest repayments (except during the construction phase of building a new home)
- Not increase the loan term or loan amount.
Help when you need it
Things you should know
Conditions, credit criteria, fees and charges apply. Residential lending is not available for Non-Australian Resident borrowers.
This information is general in nature and has been prepared without taking your personal objectives, circumstances and needs into account. You should consider the appropriateness of the information to your own circumstances and, if necessary, seek appropriate professional advice.
Taxation considerations contained in this article (on this page) are general in nature. They do not take into account your personal circumstances and they should not be interpreted or used as tax advice or a tax guide. You should seek independent tax advice to determine the appropriate tax consequences relevant to your circumstances before making any decision based on this information.
You can find more information on the Scheme website.
Lenders mortgage insurance (LMI) is issued to Westpac Banking Corporation ABN 33 007 457 141 (Westpac) and insurers Westpac (it is not insurance you take out). This information does not take into account your personal circumstances. Terms, conditions and limitations apply.