First Home Guarantee Scheme
Helping First Home Buyers Get Into the Market Sooner
The First Home Guarantee (FHBG) is part of the Australian Government’s Home Guarantee Scheme. It’s designed to help eligible Australians buy their first home sooner, with a deposit as little as 5% and without the added cost of Lenders Mortgage Insurance (LMI).
Instead of requiring a full 20% deposit, Housing Australia provides a guarantee of up to 15% of the property’s value to participating lenders. This guarantee allows buyers to borrow up to 95% of the purchase price, removing one of the biggest barriers to home ownership.
Key Benefits
Buy with just a 5% deposit
Avoid paying expensive Lenders Mortgage Insurance (LMI)
Access to a wide range of participating banks and lenders
Available for both new and existing homes
Limited number of places available each financial year
Eligibility Criteria
To apply for the First Home Guarantee, buyers must meet certain requirements:
Age & Residency: Must be at least 18 years old and an Australian citizen or permanent resident.
Income Cap: Maximum taxable income of $125,000 for singles, or $200,000 combined for couples, based on the most recent tax return.
Deposit: At least 5% of the property’s value saved, but less than 20%.
Property Ownership: Must be a genuine first home buyer, or not have owned property in Australia in the past 10 years.
Owner-Occupier: The property must be lived in as your main residence within 6 months of settlement (or on completion for new builds).
Property Price Cap: The purchase price must fall under government-set caps, which vary by city and region.
Eligible Properties
The First Home Guarantee can be used to buy:
🏡 An existing house, townhouse, or apartment
🏗️ A house and land package
📜 Land with a contract to build
🏨An off-the-plan apartment or townhouse
Both the contract price and final property value must fall under the price caps for your location.
🔎Check out the Property price caps here
How the Guarantee Works
Save a 5% deposit – Buyers only need a small deposit, rather than the full 20%.
Apply through a participating lender – Applications cannot be made directly with Housing Australia; they must go through an authorised lender.
Reserve a place – If eligible, the lender secures one of the limited FHBG places.
Find your property – You’ll have time to search for and secure your first home within the set timeframe.
Settle and move in – Once your home loan settles, you move in and start enjoying home ownership.
Ongoing Obligations
To keep the benefit of the Guarantee, you’ll need to:
Continue living in the property as your main home
Meet your loan repayment obligations
Avoid refinancing with a non-participating lender while the Guarantee is active
Provide accurate information on your application
Places Are Limited
Each financial year, a set number of places are available under the First Home Guarantee. Once the yearly allocation is filled, no more applications can be accepted until the following financial year.
Why the First Home Guarantee Matters
For many Australians, saving a 20% deposit is the hardest part of buying a home. The First Home Guarantee takes away that hurdle, helping eligible buyers purchase their first property years earlier than they otherwise could. By avoiding costly LMI, it also saves thousands of dollars, making the dream of home ownership more achievable.
💡Read more about the scheme here