Liberty Financial First Non-Bank to Join 5% Deposit Scheme

Housing Australia has added Liberty Financial to the 5% Deposit Scheme panel as the first non-bank, opening the guarantee to more borrower types.

The federal government's 5% Deposit Scheme has welcomed its first non-bank lender. Liberty Financial — a specialist provider known for serving borrowers who sit outside standard bank credit boxes — has been appointed to Housing Australia's panel of participating lenders, The Adviser reports.

The appointment follows a formal, competitive process. "The appointment of Liberty followed a competitive Request for Proposal process to expand the panel of lenders participating in the Australian Government 5% Deposit Scheme," Housing Australia confirmed. All participating lenders must meet the same comprehensive scheme requirements covering serviceability, verification, reporting, and audit obligations.

"The addition of Liberty provides eligible home buyers with greater choice and access to the Scheme while maintaining the same safeguards and standards and consumer protections that apply across the Scheme," Housing Australia said. "Expanding the lender panel helps improve accessibility to the Scheme and supports more Australians on their pathway to home ownership."

How the 5% Deposit Scheme Works

Under the scheme, eligible first home buyers can purchase property with a deposit as low as 5%, with single parents or legal guardians able to enter with just 2%. The federal government, through Housing Australia, guarantees the gap between the borrower's deposit and the standard 20% equity threshold — meaning eligible borrowers skip lenders mortgage insurance entirely.

The scheme has been substantially expanded since October 2025, when income caps were removed, annual place limits were scrapped, and property price caps were lifted. More than 300,000 Australians have now bought or built a home with support from the guarantee. In the six months from October 2025 to April 2026 alone, the scheme backed nearly 40,000 loans — comprising 15,924 single-borrower and 23,790 joint-borrower loans. Of these, 13,979 went to borrowers who would have been ineligible under the previous income thresholds.

The scheme has been supporting around 5,670 loans per month. For context, ABS data over the same period showed first home buyers overall taking out approximately 10,181 loans per month — meaning the majority of first home buyers are now entering the market through the scheme. Nearly 1,000 singles earning at least $200,000 and 1,251 couples earning $275,000 or more accessed the guarantee between October and April.

To see how LMI savings might apply to your situation, the LMI calculator gives you a starting estimate. You can also explore current first home buyer loan options at our first home buyer hub.

Why Liberty's Appointment Matters

Until now, the 5% Deposit Scheme has primarily been accessible through major banks, regionals, mutuals, and credit unions — lenders that generally assess borrowers against standard income verification models. Liberty's focus is different. The lender is widely known for its work with self-employed clients, borrowers with non-traditional income streams, and customers with more complex structures across home loans, motor finance, and commercial property lending.

For self-employed first home buyers, contractors, gig economy workers, or anyone whose income doesn't fit a standard payslip assessment, accessing the deposit scheme has required routing through a major or regional bank whose credit policies may not suit their situation. Liberty's appointment changes that.

All four major banks now participate in the scheme, following ANZ's decision to join in March 2026. More than 30 smaller, regional, and customer-owned institutions — including Bendigo Bank and Bank Australia — also offer guaranteed loans. Liberty's addition brings a specialist non-bank into the mix for the first time.

Recent Equifax data underscores the demand from younger buyers. Enquiries from first home buyers aged 18 to 25 rose 22.8% following the scheme's October 2025 expansion — the fastest-growing age group in the data — while requests from first home buyers aged 26 to 35 and 36 to 45 climbed by 17.4% and 16% respectively.

One factor worth noting: Cotality analysis shows that since the scheme's expansion, homes sitting under the new property price caps have recorded markedly faster price gains than higher-priced properties, with under-cap markets outperforming in almost nine in ten regions. The demand-boosting effect of the scheme is real and reflected in entry-level pricing.

For first home buyers working out whether they're eligible and what the numbers look like, the borrowing power calculator is a practical first step before speaking with a broker about your options.

Read more in The Adviser's original report on Liberty's appointment.