NSW $850k FHB: 5% Scheme vs 10% deposit + LMI
Same purchase, two funding paths — settlement cash drops on 5%, but only if Live in it + FHB + price cap all clear. Duty still hits either way.
Engine 2026-07-ftc. Educational estimate — not a Revenue Office assessment or credit advice.
Briefing
The 5% Deposit Scheme is a credit-market bridge for deposit size. It is not a stamp duty waiver and it is not a serviceability miracle. In New South Wales, eligible owner-occupier first-home buyers inside the correct metro or regional cap can avoid private LMI on participating lender paths — while duty and fees still hit settlement cash.
Compare columns, not slogans. Column A: 5% scheme — smaller deposit cash, scheme gates must all clear, LMI typically waived on the guarantee path. Column B: 10% without scheme — more deposit cash, 90% LVR usually means private LMI is in play. Duty appears in both columns.
Mis-classifying metro versus regional invents eligibility. Using a blog cap from last year invents eligibility. Soft calculator gates are not a lodged scheme place. Income tests and credit assessment still sit with the lender.
If your offer sits near the cap, model the over-cap path before auction day. Emotional bidding past the cap without a funded LMI plan is how settlements break.
After you pick a column, open repayments with any capitalised LMI included. Monthly cost is part of the decision. Then read the NSW learn hub so scheme, duty, and grant rules stay in one mental model.
The decision
Are you funding this as an eligible 5% Deposit Scheme purchase, or as a standard high-LVR loan with LMI risk?
- Scheme path needs owner-occupier + first-home eligibility + price under the metro/regional cap
- 5% deposit cuts purchase cash but duty and fees still hit settlement
- 10% path typically flags LMI at 90% LVR unless another waiver applies
- Income tests and participating lenders sit outside the public calculator
- Over-cap bids need a funded LMI plan, not hope
What to tick
- State: NSW
- Price: $850,000 (metro)
- Live in it: Yes
- First home buyer: Yes
- Compare 5% Scheme vs 10% cash deposit
Engine comparison
5% Deposit Scheme
Eligible OO + FHB under the modelled NSW metro scheme cap — LMI waived on the guarantee path. Settlement cash is mostly deposit plus duty, not private LMI.
- Stamp duty
- $9,797
- Deposit
- $42,500 (5%)
- LVR
- 95.0%
- LMI flag
- Not flagged
- Funds to complete
- $52,671
NSW FHB sliding concession ($800k–$1M)
Within 5% Scheme cap ($1,500,000) for NSW metro / regional centre — no LMI under Scheme
10% deposit (no scheme)
Same buyer profile without the scheme — 90% LVR usually means private LMI is in play. Deposit cash rises; loan-side cost often rises too if LMI is capitalised.
- Stamp duty
- $9,797
- Deposit
- $85,000 (10%)
- LVR
- 90.0%
- LMI flag
- Typically applies
- Funds to complete
- $95,171
NSW FHB sliding concession ($800k–$1M)
Within 5% Scheme cap ($1,500,000) for NSW metro / regional centre — no LMI under Scheme
Takeaway
Do not compare “5% vs 10%” on deposit alone. Check scheme eligibility first, then compare settlement cash (deposit + duty + fees − grant) and whether LMI is hanging off the loan. DutyStack shows the cash stack; your broker replaces indicative LMI with the lender figure. If you are near the cap, model the over-cap path before auction day.