Can two friends buy a house together under the 5% scheme?

Yes. The scheme allows two joint applicants who aren't a couple, such as friends or siblings, as long as both meet the eligibility rules, including the first home buyer test.

Do both of us need to be first home buyers for the 5% scheme?

Yes. Each applicant needs to meet the scheme's prior ownership test, which means not having owned property in Australia in the last 10 years.

Can siblings buy together under the 5% scheme?

Yes. Brothers and sisters can apply together the same way friends can, with one 5% deposit between them, provided both qualify.

Do we each need a 5% deposit?

No. The 5% deposit is for the property, so between you, you need 5% of the purchase price, plus your costs.

What happens if my friend stops paying the loan?

You're both responsible for the whole loan, not just your share. If one person stops paying, the bank can come to the other for the full repayment. Agree on an exit plan before you buy.

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Straight Answers · First home

Can my friend and I use the 5% scheme to buy together?

Bayley Clarke · Mortgage broker on the road · Last checked 16 October 2026 · 3 min read

The short answer

Yes, absolutely you can. Why not? As long as you both haven't owned property before, you can buy under the 5% scheme together and you only need that one 5% deposit.

Your borrowing capacity is probably going to be a lot stronger together than buying on your own. The same goes for siblings. If you and your brother or sister want to buy together, you can do that under the scheme too.

The 60 second version, filmed from the driver's seat. The rest of this page is the detail underneath it.

How it works with two of you

The 5% scheme allows two people to apply together, and they don't have to be a couple. Friends can do it, and so can siblings. You buy the property together, you're both on the loan, and between you, you put down a 5% deposit. You skip lenders mortgage insurance the same way a single buyer or a couple would.

The catch is that you both have to qualify. Each of you needs to meet the first home buyer test for the scheme, which means not having owned property in Australia in the last 10 years. If one of you has, that generally rules the joint application out, so check both of you before you go house hunting.

Why two incomes change the picture

When I bought my place with a friend back in 2019, there was no 5% scheme, so we copped lenders mortgage insurance. In this day and age, you can buy together and only need the 5% deposit, which is a big difference.

Two incomes on one loan generally means you can borrow a lot more than either of you could alone. The bank does treat you as two separate households, so it counts two lots of living expenses, and every lender plugs that in a bit differently. That's why which lender you go to matters more on a friends application than on a couple's.

So for a lot of people it's a no brainer, as long as it works. It can be the difference between getting into the market now and waiting years.

The questions to ask before you sign

You've got to ask a couple of extra questions when you're buying with a friend. The big one: would you trust them to make their repayment? You're both responsible for the whole loan, not just your half. If they stop paying, the bank comes to you.

Then the practical ones. How are you splitting the deposit and the repayments? What happens if one of you wants to sell, meets a partner, or moves for work? Who keeps the place? Get that agreed and written down before anyone signs a contract. It's a lot easier to have that conversation now than in three years.

The honest bit: the scheme rules apply to both of you

Under the 5% scheme, the property has to be lived in as an owner occupier while the guarantee is on. If one of you wants to move out and rent their share, or you want to put tenants in, that runs into the scheme's rules until the loan is down to 80% of the property's value.

Make sure you're both planning to live there for the long haul, not just one of you.

Want to see what the two of you could buy?

A 30 minute call. I check you both qualify for the scheme, run your borrowing capacity together across lenders, and flag what to sort out between you before you buy.

Book a 30 minute call Call 0437 189 939

No cost to you. The bank pays me when a loan settles. · How I get paid

Next question

Can I stack the 5% scheme, the stamp duty exemption and the government grant?

Generally yes. The grant needs a new build, and the scheme needs land and build in one application.