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First Home Buyers Are Stepping Back In
More first home buyers are moving – but with a 5% deposit, the margin for error is thinner.
Momentum is building at the entry level of the market. First home buyer loan commitments were 9.1% higher in the December 2025 quarter than a year earlier, reaching a three-year high, according to the Australian Bureau of Statistics.
The federal government’s 5% Deposit Scheme is helping eligible buyers purchase sooner without paying lenders’ mortgage insurance.
Treasury has noted the government may need to allocate more funds to cover the scheme if defaults rise in a higher-rate environment.
That’s not dramatic. It’s simply a reminder that smaller deposits mean bigger sensitivity to change.
What that looks like in practice
With a 5% deposit:
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You’re borrowing 95% of the property value, not 80%.
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Rate rises have a bigger impact on your repayments.
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Your equity position takes longer to strengthen early on.
None of that means don’t buy. It means test the numbers properly first.
We can help you by running repayment scenarios at today’s rates and slightly higher, and compare lenders to make sure the loan fits your income and buffer – not just approval criteria.
Contact us and we can walk you through your borrowing power and repayment buffers before you make any decisions.
P: 02 4967 5256
E: info@phlnewcastle.com.au
