What is the 5% First Home Buyer Scheme?

The scheme (officially known as the First Home Guarantee) allows eligible first home buyers to:

• Purchase a home with as little as 5% deposit

• Avoid paying Lenders Mortgage Insurance (LMI)

The government guarantees the difference between your deposit and 20% — you still have a normal home loan and normal repayments.

The First Home Owner Grant (FHOG) is a $10,000 cash grant from the Victorian Government to help first home buyers — but only if you buy or build a new home.

That’s it.
That’s the headline.

When you’re looking at home loan options, you’ll often see the term “redraw facility” pop up. It’s a handy feature on many variable-rate loans, but it’s also one that plenty of Aussies aren’t 100% clear on. So let’s break it down in plain English.

What Is an Offset Account?

An offset account is a bank account that’s connected to your home loan.
The money sitting in this account doesn’t earn interest like a normal savings account—instead, it reduces (or “offsets”) the amount of interest your lender charges on your home loan.

What is LVR?
In this first episode of the Iain-Sight Series, I break down exactly what LVR (Loan-to-Value Ratio) means, why lenders care about the 80% benchmark, and how first home buyers can still get into the market with a smaller deposit using government schemes like the First Home Guarantee and the First Home Owner Grant.

A Standard Variable Rate (SVR) home loan is one of the most common types of mortgages in Australia. The key word here is variable — meaning the interest rate can go up or down over time.

When applying for a home loan, lenders don’t just look at your income — they also need to understand your living expenses.

That’s where the Household Expenditure Measure (HEM) comes in.

If you’re borrowing more than 80% of a property’s value, you’ll often come across LMI — Lenders Mortgage Insurance.