Higher-earning Australians flocking to 5% first home deposit scheme, with some borrowers earning over $200,000

Exclusive: Economists warn Labor’s removal of caps could be pushing up prices as support flows to people in better financial positions Follow our Australia news live blog for latest updates Get our breaking news email, free app or daily news podcast Most Australian first home buyers are using the government’s 5% deposit scheme, with one in three new participants earning more than the scheme’s previous cap for high-income earners. The influx of high-income earners into the first home guarantee program, economists warn, has pushed up property prices by increasing buying capacity for people who would have bought anyway. The former Coalition government installed a scheme whereby lower-income first-time buyers could borrow 95% of a property’s value and have the government guarantee the loan, waiving lenders’ mortgage insurance. Labor scrapped the income caps of $125,000 for single borrowers and $200,000 combined for joint borrowers last year, fulfilling a pre-election pledge. Data from Housing Australia, prepared for Senate estimates and seen by Guardian Australia, shows the scheme backed 15,924 single-borrower loans and 23,790 joint loans from 1 October, when the income cap was removed