The Morning Edition First home buyers can afford a mortgage, but not a deposit. So will the new 5% scheme make a difference?
Aug 25, 2025
Shane Wright, a senior economics correspondent, sheds light on the challenges first-time home buyers face in today's market. He discusses the federal government's new 5% deposit scheme aimed at easing the path to home ownership. Wright analyzes whether this initiative can truly address the housing crisis or if it's merely a band-aid solution. He explores rising house prices and the complexities of the housing market, all while emphasizing the importance of citizen advocacy in driving meaningful change.
AI Snips
Chapters
Transcript
Episode notes
How The 5% Guarantee Works
- The expanded 5% guarantee lets first-home buyers avoid costly lender mortgage insurance if they can reach a 5% deposit.
- The government now opens the scheme to virtually all first-home buyers but keeps property-value caps per market.
Value Caps Rise But Repayments Matter
- The scheme increases property value caps significantly in many markets, for example Sydney from $900k to $1.5m.
- But Shane Wright warns buyers still need the income to service much larger mortgages, so affordability remains constrained.
High Demand Broke The Old Caps
- Uptake was strong under the original program and demand far exceeded caps, filling 10,000 spots within months.
- In the last 12 months there were about 116,000 first home buyers, showing the prior limits left many without access.