MPFG Capital | Non-Bank Lender Australia

First home buyer inquiries have surged 22% among Gen Z Australians, driven by expanded access to the Government's 5% deposit guarantee scheme, according to new figures reported by The Adviser and Australian Broker. The data signals a structural shift in who is entering the property market — and raises important questions about how these buyers can best access mortgage finance.

The 5% Deposit Scheme: How It Works

The Home Guarantee Scheme (HGS), administered by Housing Australia, allows eligible first home buyers to purchase a property with as little as a 5% deposit — without paying Lenders Mortgage Insurance (LMI). The government guarantees the remaining portion of what would ordinarily be required to reach a 20% deposit threshold.

The scheme has been progressively expanded in recent budgets, and the 2026–27 Federal Budget continues this trajectory, unlocking access for a broader cohort of younger buyers.

Key eligibility criteria (general):

Australian citizens or permanent residents
First home buyer (never previously owned property in Australia)
Income caps apply (currently 25,000 for singles, 00,000 for couples)
Property price caps vary by location and property type

Why Gen Z Is Leading the Surge

Several factors converge to explain the 22% jump in Gen Z first home buyer inquiries:

Deposit barrier reduction — With median house prices across major cities ranging from 00,000 to over .5 million, saving a 20% deposit is a multi-year challenge for most young Australians. The 5% scheme collapses this timeline dramatically.

HECS/HELP debt reform — Federal Budget changes to HECS/HELP indexation reduce the outstanding debt burden for many Gen Z borrowers, improving their calculated borrowing capacity.

Parental equity support — Increasing numbers of first home buyers are entering with partial parental support, combining family gifts or equity guarantees with the government scheme to maximise purchase power.

Fear of missing out — Despite elevated interest rates, many Gen Z buyers fear that waiting will push property prices further out of reach.

Challenges First Home Buyers Still Face

The surge in inquiries does not mean the path to purchase is straightforward. Significant obstacles remain:

Serviceability at 4.35% Cash Rate

With the RBA cash rate at 4.35% and lenders applying a minimum 3% serviceability buffer on top, first home buyers must qualify at an effective rate of approximately 7.35% or higher. For a 00,000 loan over 30 years, this translates to monthly repayments of approximately ,100.

Income Documentation for Non-Standard Borrowers

Gen Z workers increasingly work in non-traditional arrangements: freelance, gig economy, part-time, or contract roles. These income structures can create friction with major banks' automated serviceability models, which favour stable salaried employment.

Non-bank lenders can offer more flexibility in assessing non-standard income — particularly for applicants who can demonstrate consistent earnings through bank statements, tax returns or accountant letters, even without a traditional payslip.

Credit History Limitations

Younger borrowers may have limited credit history, which can affect approval outcomes at major banks. Non-bank lenders typically apply more holistic assessment approaches.

What This Means for the Broader Property Market

A 22% jump in Gen Z inquiries adds demand pressure to an already constrained property supply environment. CoreLogic data continues to show tight listing conditions in most major markets. For existing property owners and investors, increased first home buyer competition at the lower end of the market supports prices in that segment.

MPFG Capital: Supporting First Home Buyers with Non-Standard Situations

MPFG Capital's lending solutions are particularly relevant for first home buyers who:

Are self-employed or work in non-traditional income arrangements
Are new migrants or PR holders whose overseas income complicates standard assessment
Have been declined by a major bank despite genuine repayment capacity
Are purchasing in Victoria, New South Wales or Queensland

General information only. Not financial advice. Scheme eligibility is subject to Housing Australia criteria. Credit is subject to lender assessment.

Gen Z First Home Buyer Inquiries Surge 22% as 5% Deposit Scheme Expands