The 5% Deposit Revolution Begins October 2025, Melbourne’s new Real Estate Landscape.
From October 2025, Melbourne homebuyers can enter the market with just a 5% deposit under the new Home Guarantee Scheme. Forge Real Estate explains how this game-changing policy makes property ownership more accessible and impacts real estate trends.
From 1 October 2025, the Australian Government’s expanded Home Guarantee Scheme is set to revolutionise the real estate Melbourne market. This change will allow every first-time buyer in Melbourne and Geelong to purchase a home with only a 5% deposit. With no income limits, no applicant caps, and a new property-price ceiling of $950,000, this shift makes entering the Melbourne real estate market dramatically more attainable. For aspiring homeowners, this is the most significant news in real estate Australia this decade.
How the 5% Deposit Scheme Works
Deposit
Save at least 5% of the purchase price (e.g., $42,200 on an $844,000 home).
Removes the traditional 20% barrier that many savers struggle to meet.
Government Guarantee
The federal government guarantees your mortgage.
Lenders no longer need to charge Lenders Mortgage Insurance (LMI), saving you up to $10k–$15k.
Loan Approval
Your lender processes the application as a standard loan.
Faster approvals and lower interest rates for many borrowers.
“Our significant improvements to the Home Guarantee Scheme has helped more than 110,000 people into home ownership across the country. And Labor wants to help tens of thousands more through Help to Buy, our shared equity scheme which could help Australians save up to 40 per cent on the cost of their mortgage.”— Julie Collins MP, Minister for Housing
Eligibility Snapshot for Melbourne Real Estate
Citizenship
Australian citizen or permanent resident.
Age
18+ years.
Property Type
Owner-occupied dwelling within the $950k cap.
Ownership History
First home buyer or no prior ownership in the last 10 years.
Market Impact: What Top Real Estate Agencies in Melbourne Predict
- Increased Demand: The Australian Housing Association forecasts a 12–15% rise in first-home purchase activity. Many real estate companies in Melbourne are preparing for a surge in enquiries.
- Price Pressure vs. Opportunity: While higher demand may nudge prices upward, the influx of new buyers is expected to spur development, creating new opportunities in the realestate Melbourne market.
- Loan Volume Surge: Banks anticipate a 20% jump in mortgage originations, a significant event for the real estate sector.
Practical Next Steps for Buyers
As a leading real estate agency, Forge Real Estate recommends the following steps. Securing the best real estate agent Melbourne has to offer can help you navigate this changing market.
- Assess Your Finances – Calculate your 5% deposit target based on current median prices.
- Check Eligibility – Use the Home Guarantee Scheme online eligibility calculator.
- Engage a Lender – Approach a participating lender early for pre-approval.
- Prepare Documentation – Gather proof of identity, residency, and income.
- Start House Hunting – The team at The Forge can help you find properties within the $950k cap.
With just a 5% deposit, the dream of owning a home in Melbourne becomes tangible. This scheme removes major financial hurdles and opens up the property ladder. If you’re ready to take the first step, start preparing today.
Want to learn more about how the 5% deposit scheme can help you secure a home in Melbourne? Contact us to connect with the expert team at Forge Real Estate and start your property journey today!