Why Should Oncology Pharmacists Consider the 5% Deposit Scheme

The 5% Deposit Scheme Removes the LMI Cost for Oncology Pharmacists

The Australian Government 5% Deposit Scheme lets eligible first home buyers purchase with a 5% deposit without paying Lenders Mortgage Insurance. Housing Australia guarantees the difference between your deposit and 20% of the property value. No income caps apply, and no annual place limits restrict availability.

Consider an oncology pharmacist purchasing in regional Victoria at the suburb's current median. With a 5% deposit, you would need savings for the deposit plus settlement costs. Under the scheme, you avoid LMI, which would otherwise add several thousand dollars to your upfront costs. The scheme is accessed through a participating lender, not directly through Housing Australia. Your application goes through a mortgage broker or lender on the panel.

The scheme applies to both new and established homes. You can use it alongside state stamp duty concessions and grants where eligible. You cannot combine it with Help to Buy.

Price Caps Apply Based on Location

Property price caps vary by state and whether the property is in a capital city, regional centre, or other area. Both the purchase price and the lender's assessed value must sit at or below the applicable cap.

In Victoria, the cap is $950,000 for capital city and regional centres, and $650,000 for other areas. In Queensland, the cap is $1,000,000 for capital city and regional centres, and $700,000 for other areas. In New South Wales, the cap is $1,500,000 for capital city and regional centres, and $800,000 for other areas. Western Australia applies an $850,000 cap for Perth and metropolitan postcodes, and a $600,000 cap for the rest of the state.

The classification of a property as falling under the higher or lower cap depends on its postcode. Housing Australia provides a postcode search tool at firsthomebuyers.gov.au. Confirm the applicable cap with your participating lender before signing a contract.

Participating Lenders Offer Different Loan Features

Applications are made through a participating lender panel. Each lender on the panel offers different loan features, interest rate structures, and eligibility criteria. Some lenders may offer offset accounts or redraw facilities. Others may restrict these features under the scheme.

Fixed rate, variable rate, and split loan structures may be available depending on the lender. If you plan to make extra repayments or want an offset account linked to your loan, confirm which features are available under the scheme before applying. Not all participating lenders offer the same flexibility.

A home loan application under the scheme follows the same process as a standard application, but the lender submits your file to Housing Australia for approval of the guarantee. This adds a layer of assessment beyond the lender's own credit criteria.

First Home Buyer Stamp Duty Concessions Stack with the Scheme

You can use the 5% Deposit Scheme alongside state and territory stamp duty concessions and grants. In Victoria, a full stamp duty exemption applies to properties valued up to $600,000, with a sliding scale concession on properties between $600,001 and $750,000. In Queensland, a full transfer duty concession with no price cap applies to new homes for eligible first home buyers. In New South Wales, a full transfer duty exemption applies to homes valued up to $800,000, with a sliding concession on properties between $800,001 and $1,000,000.

As an example, an oncology pharmacist purchasing an established home in New South Wales at the suburb's current median who qualifies for the stamp duty exemption and uses the 5% Deposit Scheme would avoid both LMI and stamp duty. The combined saving reduces the cash required at settlement and the amount borrowed.

Eligibility for state concessions and grants is determined separately from eligibility for the 5% Deposit Scheme. You need to meet the residency and occupation requirements for each scheme independently. Most state concessions require you to move into the property within 12 months of settlement and live there for at least 12 continuous months.

Eligibility Focuses on Property Use and Ownership History

You must be purchasing as a first home buyer. You cannot have previously owned property in Australia, either solely or jointly. The property must be your principal place of residence. Investment purchases do not qualify.

At least one applicant must be an Australian citizen or permanent resident. If purchasing with a partner, both applicants are assessed. If one applicant has previously owned property, the application is ineligible.

The scheme does not impose income caps. This differs from Help to Buy, which limits eligibility to individuals earning under $100,000 or joint applicants earning under $160,000. Oncology pharmacists with income above those thresholds can access the 5% Deposit Scheme but not Help to Buy.

Pre-Approval Confirms Your Position Before You Purchase

Obtaining pre-approval before you start looking at properties confirms your borrowing capacity and shows sellers you can proceed. Pre-approval under the 5% Deposit Scheme requires the lender to assess your eligibility for the scheme as part of the approval process.

Pre-approval is conditional. It does not lock in an interest rate unless you request a rate lock, and it expires after a set period, typically three to six months. If the property you choose exceeds the applicable price cap, the pre-approval under the scheme will not apply, and you would need to either increase your deposit or find a property within the cap.

A mortgage broker familiar with the participating lender panel can direct your application to a lender that offers the loan features you need and has appetite for your employment structure. Not all lenders assess oncology pharmacist income in the same way, particularly if you work across multiple sites or receive allowances.

Call one of our team or book an appointment at a time that works for you

If you are an oncology pharmacist planning to purchase your first property and want to confirm whether the 5% Deposit Scheme applies to your situation, call one of our team or book an appointment at a time that works for you.

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