Housing Australia adds its first non-bank participant to the federal guarantee, widening loan options for first home buyers
Liberty Financial has become the first non-bank lender approved to participate in the Australian Government's 5% Deposit Scheme, opening a new lending channel for first home buyers who fall outside standard bank credit criteria.
The 5% Deposit Scheme, administered by Housing Australia, guarantees a portion of an eligible buyer's home loan so they can purchase with a deposit as low as 5% – or 2% for eligible single parents and legal guardians – without paying Lenders Mortgage Insurance (LMI). Housing Australia provides the guarantee, but applicants must still meet all eligibility criteria and each lender's own assessment requirements.
Until now, the scheme's panel has been made up exclusively of banks and mutuals.
Liberty general manager – residential Caesar Ibrahim (pictured) said the move reflects the lender's focus on creating more pathways into the property market for Australian borrowers. "We know saving a full deposit can be one of the biggest barriers for aspiring home buyers. By joining the Government's 5% Deposit Scheme, we can help more customers move forward sooner."
Ibrahim added that Liberty takes "a flexible approach to lending and look[s] beyond standard criteria", saying the scheme allows the lender "to support more customers with solutions that reflect their individual circumstances."
Liberty is known for lending to self-employed borrowers and those with non-traditional income or complex financial structures – exactly the cohort that can struggle to meet standard bank servicing criteria, scheme or no scheme.
How the scheme has evolved
The program – rebranded from the Home Guarantee Scheme – was significantly expanded from 1 October 2025, removing income caps and annual place limits and lifting property price caps across major markets. The move drew some criticism for increasing buy-side housing demand at a timre when supply is severely lacking.
Housing Australia reported in March 2026 that more than 300,000 Australians had bought or built a home through the scheme since it launched in 2020. A related but separate program, Help to Buy, is a shared-equity scheme currently offered through only two lenders, Commonwealth Bank and Bank Australia.
Liberty's entry follows a period in which the broader first-home buyer market has been highly active, with refinancing and switching activity also running at elevated levels as the scheme's expansion works through the system. It also comes as Housing Australia has been running a request-for-proposal process to expand its lender panels further, signalling that Liberty may not be the last non-bank to join.
