Can You Really Buy a House with 5% Deposit?
Let’s cut to it: YES, you can absolutely buy your first home with just a 5% deposit. And you won’t be the first Nude client to do it either.
In fact, in 2025, more first home buyers in Melbourne are using 5% deposit strategies than ever before — thanks to changing lending policies and game-changing government schemes.
We’ll walk you through:
How low deposit home loans work
What Lenders Mortgage Insurance (LMI) is — and how to avoid it
The First Home Guarantee and other supports
Pros and cons of a smaller deposit
Real-life stories of Nude clients who made it happen
🧮 Let’s Crunch the Numbers
Say you’re buying a $600,000 property.
A 20% deposit = $120,000
A 5% deposit = $30,000
That’s a big difference. The good news? You can still get a loan — and potentially avoid LMI too.
🛡️ What’s LMI and Why Does It Matter?
Lenders Mortgage Insurance is a one-off fee that protects the bank (not you) if you default.
Usually kicks in when:
You borrow over 80% of the property value
For a $600k home, borrowing 95% = LMI of around $15,000–$20,000.
BUT:
It can be added to the loan (so you don’t need to pay upfront)
Or you can avoid it altogether with certain schemes (keep reading 👇)
🏛️ The First Home Guarantee
This federal government scheme lets eligible first home buyers:
Buy with just 5% deposit
Skip LMI entirely
Access it for new or existing homes
Key criteria:
Australian citizen or permanent resident
Income caps apply ($125k single, $200k couple)
Owner occupiers only
Spots are limited — but we help clients secure them weekly.
👥 Real Story: Sarah & Blake in Coburg
They had $32,000 saved and thought they needed another 50 grand.
We helped them:
Secure a place with 5% down
Access the First Home Guarantee
Avoid $18,000 in LMI
Now they’re in their first home, sipping lattes on their own deck.
“We thought we had to wait another year. Nude made it happen in 6 weeks.”
⚖️ Pros & Cons of a 5% Deposit
Pros | Cons |
|---|---|
Get into the market sooner | Higher loan amount = more interest |
Lower upfront savings needed | May need to meet tighter lender rules |
Access grants & schemes | Property price caps may apply |
Avoid rent + save equity faster | Fewer lenders offer 5% products |
🔑 How We Make It Work
Nude Home Loans helps you:
Find lenders who accept 5% deposit loans
Secure government scheme spots (before they run out)
Package your application so it’s strong and stress-free
We’ll also make sure:
You understand your repayments
You’re buying within your means
Your loan has features that flex with your lifestyle
✅ Want to Buy With 5% Down?
Don’t wait for “someday” — make a plan today.
👉 [Book your free strategy session with Nude Home Loans]
We’ll help you:
Figure out what’s possible with your savings
Tap into every grant and scheme
Get moving sooner (and smarter)
