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The Reserve Bank of Australia (RBA) on Thursday released the biannual Financial Stability Review (FSR), which reported a sharp increase in high loan-to-value ratio (LVR) mortgage lending to first home buyers.
This follows the commencement of the federal government’s expanded 5% deposit scheme on 1 October 2025, which allows eligible first home buyers to take out loans with a 5% deposit without paying for lenders’ mortgage insurance:
“Information from the RBA’s liaison program suggests participation in the scheme has been strong”, notes the RBA FSR.
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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.