More buyers are entering the market sooner – even as interest rates rise.

New data from banking regulator APRA shows a sharp increase in buyers purchasing with smaller deposits.

The share of owner-occupier loans with a deposit of 5% or less rose 59.8% over the year to December 2025.

That shift closely follows the federal government’s expansion of the 5% Deposit Scheme in October 2025.

Even after the recent rate rise, demand remains strong – suggesting many buyers are still confident about entering the market.

Why this is happening?
 
The scheme allows eligible buyers to purchase with just a 5% deposit without paying lenders mortgage insurance (LMI).
 
For many first home buyers, avoiding LMI can mean saving tens of thousands of dollars.
 
Instead of waiting years to save a full 20% deposit, some buyers are choosing to enter the market sooner.
 
More buyers are also looking at affordable or regional areas, where borrowing capacity can stretch further in a higher-rate environment.
 
What this means for buyers
 
This isn’t just a statistic – it’s a practical pathway.
 
But eligibility rules, lender participation and loan structure all matter.
 
Getting those details right can make a significant difference.
 
I can help you understand how the scheme works, check your eligibility and structure the loan to suit your situation. Book a free call today!