Oakleigh buyers can combine a federal low deposit scheme with Victorian stamp duty relief when buying a first home. Used together, these policies can reduce both the deposit you need and the cash you must find at settlement. Each one has limits, so it pays to check them against the property you want before you make an offer.
Which Government Policies Help First Home Buyers in Oakleigh?
Three policies matter most for a first home loan in Victoria: the federal 5% Deposit Scheme, Victorian stamp duty relief, and the First Home Owner Grant. The duty discounts apply to any purchase, including established homes, and you can only claim the exemption once. The grant is narrower and only covers new homes.
Oakleigh is a multicultural suburb in the City of Monash, known for its Greek dining precinct and its station on the Pakenham Line. That mix of older homes, townhouses and units means the right policy depends heavily on the type of property you choose. Our Oakleigh home loans page covers the local lending side in more detail.
How Does the 5% Deposit Scheme Work?
The 5% Deposit Scheme lets eligible first home buyers purchase with a 5% deposit and avoid Lenders Mortgage Insurance (LMI). The government acts as guarantor for up to 15% of the property value, so the loan is treated like one with a 20% deposit for LMI purposes.
The scheme was expanded from 1 October 2025. That change removed income caps and annual limits on places, and increased property price caps. The price cap is $950,000 for Melbourne and Geelong. You still need to pass a lender's assessment, and the property must be your home to live in.
The main trade-off is a larger loan. You borrow 95% of the price, so your repayments are higher and your loan to value ratio (LVR) starts high. That leaves less equity to fall back on if prices dip. The cap also limits where it works. Domain's Oakleigh profile lists median prices above $950,000 for three and four bedroom houses, so the scheme is more likely to suit a unit or townhouse. Our first home buyers page explains how we match buyers to lenders that accept the scheme.
What Does a 5% Deposit Loan Cost Each Month?
A lower deposit means a higher monthly repayment, and the gap is easy to measure before you commit. As an example, consider a buyer purchasing a unit at the $950,000 cap.
With a 5% deposit of $47,500, they borrow $902,500. At an illustrative rate of 6.75% p.a. on a 30 year principal and interest owner occupied home loan, the repayment is about $5,850 per month. If the same buyer had saved a 20% deposit of $190,000, the loan would be $760,000 and the repayment about $4,930 per month at the same illustrative rate.
The outcome is a trade. The scheme gets the buyer into the home sooner and avoids LMI, but costs roughly $920 more each month than the larger deposit option. Rates change and vary by lender and deposit size, so use our loan repayment calculator when calculating home loan repayments for your own numbers. A borrowing power calculator shows whether a lender is likely to approve that larger loan.
How Much Stamp Duty Do First Home Buyers Save in Victoria?
Eligible Victorian first home buyers pay no stamp duty on a home with a dutiable value up to $600,000, and receive a reduced amount up to $750,000, if they meet the State Revenue Office conditions. From $601,000 to $750,000 you receive a concession rather than a full exemption. Above $750,000 there is no first home buyer reduction.
There are conditions attached. You must live in the home as your principal place of residence for at least 12 months within 12 months of settlement. If you claim a discount but do not move in on time or do not stay for 12 months, you must notify the State Revenue Office. Your conveyancer usually helps with the application during the property transfer.
The duty thresholds and the 5% Deposit Scheme cap are separate tests. A purchase can sit under the federal cap but above the duty thresholds, which means you could use the scheme and still pay some duty. Our stamp duty calculator and property buying cost calculator help you estimate that cost before you set a budget.
Does the First Home Owner Grant Apply to Established Homes?
No. The First Home Owner Grant is a $10,000 payment for eligible first home buyers of a newly constructed or never-occupied property valued up to $750,000. A unit or house that has been lived in before generally does not qualify.
If you are considering a new townhouse or a house and land package, the grant can sit alongside the stamp duty concession and the low deposit scheme. Buyers planning to build may also want to look at our construction loans page, since lending for a build works differently to a standard purchase.
These rules are set by government and can change, so confirm the current settings before you make an offer. Call one of our team or book an appointment at a time that works for you, and we will work through which policies apply to your purchase, then help you prepare your home loan pre-approval and apply for a home loan with a lender that suits you. You can book an appointment online in a few minutes.
Frequently Asked Questions
What is the price cap for the 5% Deposit Scheme in Melbourne?
The property price cap is $950,000 for Melbourne and Geelong. The purchase price must be at or below the cap, and you still need to pass a lender's assessment.
Do first home buyers pay stamp duty in Victoria?
Eligible first home buyers pay no duty on a home with a dutiable value up to $600,000. A reduced amount applies from $601,000 to $750,000, and there is no first home buyer reduction above that.
Can I get the First Home Owner Grant on an established home?
No. The $10,000 grant applies only to newly constructed or never-occupied properties valued up to $750,000.
What is the downside of buying with a 5% deposit?
You borrow 95% of the price, so your repayments are higher and you start with less equity. Using an illustrative rate of 6.75% p.a., the repayments in our example were about $920 per month higher than with a 20% deposit.
