The 5% Deposit Scheme explained for Mackay buyers

Saving a 20% deposit in Mackay can take years. The Australian Government 5% Deposit Scheme is designed to shorten that wait. If you're eligible, you could buy your first home with a 5% deposit and avoid lenders mortgage insurance (LMI), which can otherwise add thousands to the cost of a low-deposit loan.

Here's how it works, what the price cap means locally and what to check before you start looking.

How the scheme works

Normally, if you borrow more than 80% of a property's value, the lender charges LMI. Under the 5% Deposit Scheme, the government guarantees up to 15% of the property value to a participating lender. That guarantee takes the place of LMI, so you can buy with a 5% deposit without paying it.

Key points, as set out by the scheme's official site:

• Since 1 October 2025 there are no income caps and no limit on the number of places.
• The minimum deposit is 5% for first home buyers. Single parents and legal guardians may be able to use it with a minimum 2% deposit.
• You must apply through a participating lender. You can't apply directly to Housing Australia.
• You must live in the home as an owner-occupier to keep the guarantee.
• Once you have your conditional pre-approval under the scheme, you have 90 days to find a home and sign a contract.

The guarantee covers the lender. You still borrow the full loan amount and the lender still needs to be satisfied you can afford the repayments.

The price cap for Mackay and the Isaac

Each state has property price caps. In Queensland the cap is $1,000,000 for Brisbane and the regional centres of the Gold Coast and Sunshine Coast. For other areas, including Mackay and the Isaac Region, the cap is $700,000.

Both the purchase price and the home's value, as assessed by your participating lender, must be at or below the cap. Some suburbs have more than one postcode, so check the scheme's postcode search tool and confirm the cap with your lender.

For context, Opteon reports the median house price in the Mackay local government area was $725,000 in the first half of 2026. That's above the $700,000 cap. Many houses, units and townhouses still sell under the cap, but you may need to be realistic about suburb, size or property type. In Moranbah, Dysart and other Isaac towns, more of the market may fall under the cap. Our Moranbah home loans page has more on buying out west.

What you can buy

The scheme covers new or existing houses, townhouses and apartments, house and land packages, off-the-plan purchases, and vacant land with a building contract. If the land and build are on separate contracts, the land price plus build cost must come in under the cap.

Illustrative example

Illustrative only: on a $600,000 home, a 5% deposit is $30,000 and the loan would be around $570,000, before costs. To avoid LMI without the scheme, you'd usually need a 20% deposit of $120,000. That gap is why the scheme can bring a purchase forward by years. You'll still need money for other costs, such as legal fees and building and pest inspections.

Stacking it with Queensland help

The 5% Deposit Scheme is a federal program. Queensland has its own help, which you may be able to use alongside it if you're eligible:

• First Home Owner Grant: $30,000 for eligible first home buyers buying or building a new home valued under $750,000, including land. It doesn't apply to established homes.
• Transfer duty on new homes: eligible first home buyers pay no duty on a new home or vacant land to build a home, for contracts dated from 1 May 2025, with no value cap.
• Transfer duty on established homes: no duty for eligible first home buyers on homes valued at $700,000 or less, with a partial concession under $800,000.

From 1 August 2026, Queensland home and first home duty concessions are generally limited to Australian citizens, permanent residents and specified foreign retirees. Each program has its own rules, so check each one separately.

Things to weigh up

• A bigger loan. A smaller deposit means a bigger loan and more interest over time.
• Serviceability still applies. Lenders assess your income and expenses as usual. For shift and roster workers, how a lender treats overtime and allowances can make a real difference. See our mining and FIFO home loans page.
• Valuation risk. If the lender's valuation comes in above the cap, the property may not qualify for the scheme even if your price is under it.
• Lender choice. Only participating lenders offer the scheme, and their policies differ.

More on getting started is on our first home buyers page.

Talk it through

If you'd like to know whether the 5% Deposit Scheme could work for you, and what a realistic price range looks like, call or text us on 0458 773 002 or book a free assessment at our contact page. For most home loans there's no broker fee; any fee is disclosed upfront in our Credit Guide.

Common questions

Sources

• First Home Buyers: Australian Government 5% Deposit Scheme
• First Home Buyers: Property price caps
• Australian Government 5% Deposit Scheme Information Guide
• MFAA: Changes to the Australian Government 5% Deposit Scheme
• Queensland Revenue Office: First home owner grant
• Queensland Revenue Office: First home buyer relief (new homes)
• Queensland Revenue Office: First home concession
• Queensland Revenue Office: Changes to home concessions
• Opteon: Mackay Whitsundays residential market insights H1 2026

This guide is general information only and doesn't take into account your objectives, financial situation or needs. Talk to us about your circumstances before acting on it. Related: First home buyers.