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Straight Answers · First home
Do I have to put all my savings in under the 5% scheme, or can I keep a buffer?
Bayley Clarke · Mortgage broker on the road · Last checked 16 October 2026 · 3 min read
The short answer
No, you do not need to put all your savings in. But the scheme is designed to help people who don't have much saved buy with a 5% deposit, so there are rules on how much you can keep left over as a buffer.
The rule is six months of loan repayments for the loan you're applying for, plus six months of household living expenses. That total is generally the most you can keep in the bank once you've bought under the 5% scheme.
The 60 second version, filmed from the driver's seat. The rest of this page is the detail underneath it.
Why there's a cap at all
The 5% scheme exists for people who haven't got a big deposit. The government guarantees part of the loan so you can get in with 5% down and no lenders mortgage insurance.
If you've actually got a lot more than 5% sitting in the bank, the scheme isn't really built for you. So lenders don't let you put in the minimum and park the rest. You're expected to use your savings toward the deposit, and keep a sensible buffer, not a second deposit.
How the buffer is worked out
Here's how it works. Say, based on your financial world, the bank works out your household living expenses at $3,000 a month, and your loan repayment is $3,000 a month. That's $6,000 a month all up, roughly $1,400 a week.
Six months of that is $36,000. That would be your theoretical maximum buffer, the most you can have left over once you've bought your first home under the 5% scheme. Anything above that is generally expected to go into the purchase. So the bigger your repayments and the higher your living costs, the bigger the buffer you're allowed to keep. It scales with your life, which is the point of it.
Where lenders differ
The six-plus-six rule is the common version, and most of the scheme lenders work off something close to it. A few add a bit extra on top if you're building a new home, to cover variations in the build.
Not all of them follow it, though. At least one smaller scheme lender uses a flat dollar cap instead, and one of the big banks works it off living expenses plus a slice of the build contract on new builds. If your savings sit close to the line, which lender you pick decides how much you get to keep.
The honest bit: too much savings can knock you out
If your savings would take your deposit to 20% or more of the property's value, the loan generally can't go under the scheme at all. At that point you don't need the guarantee, because 20% already avoids lenders mortgage insurance.
And don't zero out your account just to get the keys either. The buffer exists for a reason: repayments start the month after you settle. Keep what you're allowed to keep.
Want to know how much you can keep under the 5% scheme?
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Next question
I earn over the income cap. Can I still buy under the scheme?There's no more income cap on the 5% scheme. It's gone.
Related answers
The full guide: The First Home Guarantee, explained Guarantor loan or the government 5% scheme: which one is best? What's the scheme price cap where I live? What is the catch with the 5% scheme?Not your question? Book a call and ask it, or call 0437 189 939.