RBA Dismisses Concerns Over 5% Deposit Scheme — Key Takeaways for First Home Buyers and New Migrants

RBA Governor Michele Bullock has publicly dismissed concerns that the Australian government's 5% deposit scheme will drive up property prices, according to The Adviser. The Governor also commented on the prospect of borrowers using superannuation toward their home deposit — another policy area under active discussion.

What Is the 5% Deposit Scheme?

The First Home Guarantee allows eligible first home buyers to purchase a property with just a 5% deposit, with the Australian Government guaranteeing the remaining portion up to 20%. This removes the requirement for Lenders Mortgage Insurance (LMI), potentially saving buyers tens of thousands of dollars.

The Governor's comments signal that the RBA does not view this scheme as a significant driver of property price inflation — providing reassurance to both policymakers and prospective buyers.

Who Is Eligible?

The scheme has specific requirements:

Important: Temporary visa holders are generally not eligible for the First Home Guarantee. This is a critical distinction for many in Australia's migrant community.

What This Means for New Migrants and PR Holders

For permanent residents who meet the eligibility criteria, the First Home Guarantee can be a powerful tool — reducing the upfront capital required to enter the property market. However, even eligible PR holders may face hurdles at major banks if:

• They have been in Australia for fewer than two years
• Their income comes from self-employment or overseas sources
• Their credit history in Australia is limited

This is where specialist non-bank lenders like MPFG Capital play a critical role. We regularly work with PR holders and new migrants whose applications are straightforward in terms of capacity, but who don't fit the standard bank template.

The Superannuation Angle

Governor Bullock also weighed in on the contentious idea of allowing borrowers to access superannuation for home deposits. While this policy is still under discussion, the RBA's cautious stance suggests it is not imminent. Borrowers should plan based on current rules — and speak with a financial adviser if considering super access strategies.

MPFG Capital's Approach for New Migrants

MPFG Capital's Full Doc loan is specifically designed for borrowers with verifiable income who may not yet meet major bank tenure or credit history requirements. This includes:

• Permanent residents with less than 2 years' Australian employment history
• New migrants with overseas income they're transitioning from
• PR holders purchasing their first Australian property

We understand the nuances of migrant finances — and we offer consultations in Mandarin.

Source: The Adviser, Housing Australia. This article is for informational purposes only and does not constitute financial advice. Scheme eligibility should be verified with Housing Australia or a licensed mortgage specialist.