A 5% deposit and no LMI?
Check whether the First Home Guarantee covers your purchase — unlimited places and no income caps since October 2025 — or see the indicative LMI you'd pay and exactly how far off your deposit is.
The First Home Guarantee covers this purchase
Buy with a $32,500 deposit — and pay no LMI
At $650,000 you're under the capital-city cap for New South Wales ($1,500,000). The government guarantees the gap up to a 20% deposit, so no lenders mortgage insurance is charged. Since 1 October 2025 there are unlimited places and no income caps.
5% deposit needed
$32,500
Your savings
$80,000
12.3% of price
Deposit ready
Yes ✓
LMI you avoid
$26,552
indicative
Your $80,000 already covers the 5% deposit. Going in at 5% without the Guarantee would cost about $26,552 in LMI (indicative estimate only).
First Home Guarantee price caps and stamp duty are verified figures. All LMI amounts are an Indicative estimate only — actual LMI varies by lender and insurer. A guide, not financial advice.
Two things decide what a first home costs you upfront: whether your price sits under the First Home Guarantee cap for your state and location, and — if it doesn't — how much lenders mortgage insurance you'd pay for buying with less than a 20% deposit. The cap is a hard line, not a sliding scale, so a modest difference in price can change the deposit you need by tens of thousands.
Both are answered from three inputs: where you're buying, what you expect to pay, and what you've saved. You get the deposit each route asks for, an indicative LMI figure where the Guarantee isn't open to you, and the gap to each milestone.
How this is calculated
- 1
Test your price against your cap
Every state has two First Home Guarantee caps — one for the capital city and regional centres, one for the rest of the state — and your price is compared to whichever applies. At or under it, the 5% deposit route is open; a dollar over and it closes.
- 2
Turn the percentages into dollars
Three deposits come off your price: the scheme's 5% minimum, the target you set, and the 20% that ends LMI. Your savings are subtracted from each to give the gap still to save.
- 3
Estimate LMI from your loan-to-value ratio
Your loan is the price less the deposit, and the LVR is that loan as a share of the price. At an 80% LVR or below the premium is zero; above it, the LVR falls into a band and the premium is your loan times that band's rate. It runs at your target deposit, then again at 5%.
- 4
Add stamp duty for the cash figure
The advanced panel adds your state's first-home-buyer transfer duty — nothing up to the free threshold, then a taper to full duty — to the deposit and any LMI, giving total cash to buy.
- 5
Trace the LMI curve
The chart re-estimates the premium at every half-percent of deposit between 5% and 25%. It steps down at band edges rather than sloping evenly, showing where the next chunk of saving actually buys you something.
What it assumes
- Every LMI figure is indicative. There is no official public rate — insurers price it commercially — so the premium comes from an indicative matrix of rates by LVR, not a quote.
- LMI is shown as upfront cash. Lenders often let you capitalise it into the loan instead, and may add fees of their own.
- The Guarantee test is the price cap only. Citizenship, first-home and owner-occupier requirements, and whether your lender participates, aren't checked.
- Stamp duty uses your state's owner-occupier, established-home first-home scale. Conveyancing, inspections, registration fees and moving costs sit on top of every total.
- Nothing here tests whether a lender would approve the loan — having the deposit and servicing the repayments are separate hurdles.
Common questions
Does the First Home Guarantee put money towards my deposit?
No. It guarantees part of your loan to the lender, which is why no LMI is charged — nothing is contributed to the purchase. You still borrow and repay the larger loan a 5% deposit implies, so repayments and total interest run higher than with a 20% deposit.
What if my price is a few thousand over the cap?
The cap is a threshold, not a taper, so there's no partial version of the scheme. Above it you're on an ordinary loan where LMI applies at any deposit under 20% — the premium the tool then shows. Negotiating back under the cap can be worth far more than you shave off.
Why do the caps differ so much within one state?
Each state has a higher cap for its capital city and regional centres and a lower one for the rest of the state — in New South Wales, $1,500,000 against $800,000. Whether a postcode counts as a regional centre comes from Housing Australia's list, which is why the tool asks you to choose.
Does LMI protect me if I can't make the repayments?
It doesn't. LMI protects the lender against loss if the property sells for less than what's owed; you pay the premium, but any shortfall can still be pursued from you. It's a cost of borrowing with a small deposit, not cover for you.
Sources: Housing Australia — First Home Guarantee · All data sources
See also: First Home Super Saver · Stamp duty · Borrowing power · Mortgage repayments
General information only, not financial advice. Figures are estimates based on the inputs and assumptions above and don't account for your personal circumstances. Confirm anything important with the relevant authority or a licensed adviser.