The 5% deposit scheme now covers homes up to $1.5 million. Here's what that opens up in the Shire
When the 5% deposit scheme first came in, the Sydney price cap was $900,000. In the Shire, that bought you a unit and not much else. A lot of local first home buyers looked at it, did the maths on the suburbs they actually wanted to live in, and quietly gave up on it.
Since October last year, the cap for Sydney has been $1.5 million. The income limits are gone. The cap on the number of places is gone. And in the same stretch of time, Shire house prices have come down around 10%.
Put those together and the map of "where a first home buyer can realistically buy in the Shire" looks very different to the one most people still have in their heads.
What’s the scheme exactly?
Under the expanded First Home Guarantee, an eligible first home buyer can purchase with a deposit as small as 5%, and the government guarantees the rest of what would normally be a 20% deposit - so there's no lenders mortgage insurance. For Sydney (and the rest of the Greater Sydney area, which includes the Shire) the property price cap is $1.5 million. There are no longer income caps, and no longer a limited number of spots each year. You need to be an Australian citizen or permanent resident, at least 18, buying to live in, and not have owned property before. Not every lender participates, and each participating lender still has its own criteria.
What the numbers look like
Take a $1.2 million townhouse in Miranda.
Deposit under the old 20% rule: $240,000
Deposit under the scheme: $60,000
Lenders mortgage insurance: none
That $180,000 difference is, for most Shire couples, somewhere between four and seven years of saving. It's the difference between buying in 2026 and buying in 2032, by which time the townhouse has probably moved again.
The deposit is smaller but the loan is bigger - $1.14 million on that example - and the repayments on it have to fit your income comfortably, not just technically. Serviceability does the heavy lifting in a 5% deposit application. That's not a reason to avoid the scheme. It's the reason the structure needs to be right before you make an offer.
What's inside the cap in the Shire
Units - almost everything. Shire unit asking prices are sitting around the mid-$900,000s on average. Two-bedroom apartments in Caringbah, Miranda, Sutherland, Cronulla, Kirrawee and Engadine are comfortably under the cap, and a decent share of them sit under $1 million, which matters for stamp duty (more on that below).
Townhouses and duplexes - most of them. The three-bedroom townhouse and duplex market in Gymea, Kirrawee, Caringbah, Miranda and Sylvania has largely been sitting in the $1.1 to $1.5 million range. A year ago, plenty of these were pushing above the cap. Now a good number are back inside it.
Houses - some, and more than you'd think. Shire houses average close to $1.9 million, so most of Cronulla, Burraneer, Lilli Pilli and the waterfront pockets are out of scope. But original or partly-renovated houses in Engadine, Heathcote, Loftus, Sutherland, Menai and Bangor do come up under $1.5 million, and with asking prices down around 10% over the year, more of them are landing there than at any point since the scheme started.
In summary, twelve months ago the scheme was a unit scheme in the Shire. This spring it's a unit, townhouse and, in the right suburb, house scheme.
Stamp duty
The deposit scheme is federal. Stamp duty is state. They're separate, and first home buyers in NSW get help with both, but the thresholds don't line up.
Under $800,000: no stamp duty at all
$800,000 to $1 million: a concession, sliding down to nothing as you approach $1 million
Over $1 million: full stamp duty - in the region of $50,000 on a $1.2 million purchase
So a $950,000 unit in Caringbah gets you the 5% deposit and a stamp duty discount. A $1.2 million townhouse gets you the 5% deposit and a full duty bill. Neither is the wrong choice - but the second one needs roughly $50,000 more in the bank on top of the deposit, and it's better to know that before you fall for the townhouse.
This is the sort of thing we map out in the first conversation: deposit, duty, legals, buffer, the total, and how far off it you are.
Getting it right before you look
Confirm you qualify. Citizenship or residency, first-time ownership, buying to live in. If you're buying with a partner, both of you need to meet the ownership test.
Check capacity across lenders, not just one. Not every lender is on the scheme panel, and the ones that are assess income differently. The gap between lenders on the same application can be significant - and on a 5% deposit loan, capacity is the whole game.
Know the total cost for the price bracket you're looking in. The $1 million stamp duty line changes the sums more than most buyers expect.
Get pre-approved under the scheme. A scheme pre-approval reserves your place and tells agents you can settle. In a spring with fewer listings than usual, that's what lets you act when the right place comes up.
Don't chase the cap. $1.5 million is the ceiling, not a target. The right price is the one where the repayments still work if rates move again.
The Shire is back on the list
The number of first home buyers who told us last year that they'd "given up on the Shire" and started looking towards Wollongong or the south-west was hard to miss. For a fair few of them, the combination of a $1.5 million cap, no income test and a 10% price correction changes the answer. Not for everyone. But "we assumed we couldn't" isn't the same as "we checked".
If you want to know whether you qualify, what you could borrow under the scheme, and which parts of the Shire are actually within reach on your numbers, call or text Stu on 0401 641 773. First chat to keys, it's Stu the whole way.
Frequently asked questions
What is the price cap for the 5% deposit scheme in Sydney?
For Sydney and the wider Greater Sydney region, which includes the Sutherland Shire, the First Home Guarantee price cap is $1.5 million. This was raised from $900,000 in October 2025. The cap applies to the purchase price of the property, and different caps apply in regional NSW and other states.
Are there income limits for the First Home Guarantee in 2026?
No. The previous limits of $125,000 for singles and $200,000 for couples were removed in October 2025, along with the annual cap on the number of places. Eligibility now rests on being an Australian citizen or permanent resident aged 18 or over, not having owned property before, and buying a home to live in. Lender criteria and serviceability still apply.
Can I buy a house in the Sutherland Shire with a 5% deposit?
In some suburbs, yes. With the cap at $1.5 million and Shire house asking prices down around 10% over the past year, houses in Engadine, Heathcote, Loftus, Sutherland, Menai and Bangor do come onto the market inside the cap. Cronulla and the waterfront suburbs are mostly above it. Units and townhouses across the Shire are largely within the cap.
Do first home buyers pay stamp duty in NSW?
It depends on the price. Under the NSW First Home Buyers Assistance Scheme, there's no stamp duty on homes up to $800,000, a concession between $800,000 and $1 million, and full duty above $1 million. This is separate from the federal 5% deposit scheme - you can qualify for one, both or neither, so the total cost picture is worth mapping before you set a budget.
How much deposit do I need for a $1.2 million home under the scheme?
Under the First Home Guarantee, a 5% deposit on a $1.2 million property is $60,000, with no lenders mortgage insurance. You'd still need funds for stamp duty (around $50,000 at that price for a first home buyer in NSW), legal costs and a buffer, so the realistic cash requirement is closer to $115,000 to $120,000. Lending criteria apply and the loan still needs to be serviceable on your income.
Which lenders offer the 5% deposit scheme?
A panel of participating lenders offers the scheme - the major banks and a range of smaller and non-bank lenders. Not every lender takes part, and each assesses applications a little differently. A broker with access to 60+ lenders can run your scenario across the participating panel to find where your application is treated best.
The information provided is general in nature and for illustrative and discussion purposes only. Terms, conditions, fees and charges may apply. Normal lending criteria apply. Rates subject to change. Approved applicants only. First Home Guarantee eligibility criteria and property price caps apply. Stamp duty figures are approximate and subject to Revenue NSW thresholds.
Sutherland Mortgage Group - Australian Credit Licence 517192, authorised under LMG Broker Services Pty Ltd.
