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Dreaming of your first home but stuck saving for the ‘perfect’ 20% deposit? You’re not alone. The First Home Guarantee (FHBG) allows eligible Australians to buy a home with just a 5% deposit while the government covers the Lenders Mortgage Insurance (LMI) fee—saving you up to $30,000 upfront.
As of October 2025: The rules have changed significantly. There are now no caps on the number of places available (previously limited to 35,000/year) and no income caps, making this the best time in history to apply. This guide, written by an expert mortgage broker in Brisbane, tells you everything you need to know.
🆕 Update: Big Changes to the First Home Guarantee
From 1 October 2025, the First Home Guarantee (FHBG) has been expanded:
✅ No income caps — all first-home buyers (and eligible returning buyers) can apply
✅ Unlimited places — no more waiting lists
✅ Higher price caps — e.g. up to $1.5m in Sydney, $1.0m in Brisbane, $950k in Melbourne
✅ Permanent residents eligible, alongside citizens
✅ Still only 5% deposit required, with no LMI
👉 Remember: this is a government guarantee to your lender, not a cash grant. You remain fully responsible for your loan and repayments.
What Is The Home Guarantee Scheme?
The First Home Guarantee (previously known as the First Home Loan Deposit Scheme or the New Home Guarantee) is a no-LMI scheme that allows home buyers to enter the market with as little as a 5% deposit.
There are three main benefits to the scheme:
You can enter the market more quickly with a lower deposit.
You can save almost $30,000 on Lenders Mortgage Insurance (LMI).
You gain access to lower interest rates usually reserved for buyers with a bigger deposit, allowing you to save thousands on your repayments.
There are a couple of limitations/rules to keep in mind:
The property must be owner-occupied (not an investment).
You must move in within 6 months (timing rules vary by property type).
From 1 October 2025, there is no cap on places and no income caps.
Price caps apply and vary by location (see table below).
First Home Guarantee Scheme Expanded OLD Eligibility In 2026
You can apply on your own or jointly (including with friends or family). Here’s the eligibility snapshot from 1 October 2025:
Requirement | Eligibility |
Taxable Income | No income caps from 1 October 2025. Lenders still assess borrowing capacity, credit, and affordability. |
Deposit | At least 5% deposit (up to max 20%). |
First Home Buyer | You must not currently own property. If you have owned property before, you may still qualify if it’s been 10+ years since you last owned. |
Property Type | Existing home, townhouse, or apartment; house-and-land package; land with a separate contract to build; or an off-the-plan apartment/townhouse. |
Citizenship | Australian citizens and permanent residents are eligible. |
Property Price Cap | Caps vary by location. Brisbane & major QLD centres: $1,000,000. Rest of QLD: $700,000. (Full table below.) |
Minimum Age | 18+ years. |
Living Arrangement | You must move in and live in the property as your home within the applicable timeframe. |
Relationship | Apply as a single, a couple (married/de facto), or jointly with a sibling/parent/friend (subject to lender policy). |
Buying Type | Individuals only (no companies or trusts). Residential property only. |
Banks | Participating lenders include major banks and select non-majors (availability varies by lender). |
Single Parents | Single legal guardians (e.g. aunts/uncles/grandparents) remain eligible for the Family Home Guarantee (2% deposit, separate stream). |
If you’re unsure whether you qualify, get in touch with our team and we’ll guide you for free.
How Does The Scheme Work?
The government acts as your guarantor, allowing you to buy a home without paying thousands of dollars in lenders’ mortgage insurance (LMI).
Ordinarily, you’d need at least a 20% deposit to avoid LMI. Under the First Home Guarantee, you can purchase with a 5% deposit, and the government provides a guarantee (typically up to 15%) so LMI isn’t charged.
Important: This is a government guarantee to the lender, not a cash grant. You remain fully responsible for your loan and repayments.
Your home loan and scheme application are still subject to normal lender checks: borrowing capacity, credit history, employment, valuation, and property eligibility.
Availability: From 1 October 2025, there is no cap on places. Lenders continue to assess applications case-by-case.
Hunter Galloway is accredited Australia-wide. Through our pre-approval process, we’ll help you confirm eligibility and progress your loan efficiently. Call 1300 088 056 or contact us.
How Much Will I Save?
The First Home Guarantee Scheme can save you thousands of dollars. For example, based on our LMI calculator, if you were buying a house for $700,000 with a 5% deposit, you would pay $29,991 in LMI.
House Price | LMI saved under the First Home Guarantee Scheme. |
$500,000 | $16,720 |
$550,000 | $23,564 |
$600,000 | $25,707 |
$650,000 | $27,849 |
$700,000 | $29,991 |
In addition to these savings, you can also take advantage of schemes such as Stamp Duty concessions, the First Home Owners Grant or the First Home Super Saver Scheme.
Read more: Government grants to buy a first home.
What Are The Property Price Limits For The First Home Guarantee Scheme?
Good news: Income caps are gone. The First Home Guarantee (FHBG) is no longer just for low-income earners. However, the government still places limits on property prices.
The scheme supports “modest” homes. You cannot use it to buy a luxury mansion significantly above the market median.
New Price Caps (Effective 1 October 2025):
Price limits have increased significantly to reflect the current market. These limits vary by state and region.
State / Territory | Capital City & Regional Centres* | Rest of State |
New South Wales | $1,500,000 | $800,000 |
Victoria | $950,000 | $650,000 |
Queensland | $1,000,000 | $700,000 |
Western Australia | $850,000 | $600,000 |
South Australia | $900,000 | $500,000 |
Tasmania | $700,000 | $550,000 |
ACT | $1,000,000 | N/A |
Northern Territory | $600,000 | N/A |
Jervis Bay & Norfolk Island | $550,000 | N/A |
Christmas & Cocos Islands | $400,000 | N/A |
Source: Housing Australia (Updated October 2025)
What determines the higher price caps?
Not all “regional” areas are treated the same.
Some major regional hubs use the higher “Capital City” price cap. This helps buyers in expensive coastal or industrial markets.
Key areas with the higher price cap include:
- QLD: Gold Coast and Sunshine Coast.
- NSW: Newcastle, Lake Macquarie, and Illawarra (Wollongong).
- VIC: Geelong.
Expert tip: Don’t guess your zone. The difference between a “Capital” cap and a “Rest of State” cap can be $300,000. This boundary often splits suburbs right down the middle. Ask your mortgage broker to verify your specific suburb’s cap before you go house hunting. This ensures you don’t waste money on building inspections for ineligible homes.
First Home Guarantee Scheme Australia Participating Lenders: Who Can You Apply With?
Not all lenders offer the Home Guarantee Scheme. You must apply through one of the participating lenders authorised by Housing Australia. There are over 30 lenders on the panel, ranging from big banks to smaller mutuals.
Finding the right lender is critical. Each bank has different policies for the First Home Guarantee (FHBG). We help you find the one that fits your goals.
Participating Major Banks
Three of the “Big Four” banks currently participate in the scheme.
- Commonwealth Bank (CBA)
- NAB (National Australia Bank)
- Westpac (Including St. George, Bank of Melbourne, and BankSA)
Popular Non-Major Lenders
Many smaller lenders offer great service and competitive rates under the scheme.
- Bendigo Bank
- Great Southern Bank
- People’s Choice Credit Union
- Teachers Mutual Bank
- Bank Australia
- Heritage Bank
Full List of Participating Lenders For The First Home Guarantee Scheme
- Australian Military Bank
- Australian Mutual Bank
- Auswide Bank
- Bank First
- Bank of us
- Beyond Bank Australia
- Border Bank
- Community First Bank
- Credit Union SA
- Defence Bank
- Family First Bank
- Firefighters Mutual Bank
- G&C Mutual Bank
- Gateway Bank
- Health Professionals Bank
- Holmesglen Institute
- Illawarra Credit Union
- Indigenous Business Australia
- Mortgageport
- MyState Bank
- Newcastle Permanent
- Police Bank
- P&N Bank
- QBank
- Regional Australia Bank
- Unity Bank
- The Mutual Bank
The panel of lenders changes occasionally — always confirm the latest list on the official site.
Hunter Galloway Broker Warning: Just because a bank is on this list doesn’t mean they will approve you. We see clients get declined for simple reasons every day.
- Construction Loans: Many lenders on this list do not offer construction loans under the scheme.
- Renovations: You generally cannot use this scheme to buy a home and immediately renovate it.
- Credit Scoring: Some smaller banks have very strict credit scoring. A simple unpaid bill could stop your application.
We know which lenders are currently approving faster. Speed matters when you have a finance clause. Talk to us to find a lender that moves quickly.
Why Use a Mortgage Broker for the First Home Guarantee?
You cannot apply directly to Housing Australia for the First Home Guarantee Scheme. You must go through a participating lender or a mortgage broker.
We save you time. We know which banks have open spots for the scheme. We also know which banks accept your specific income type.
Ready to apply?
We can check your eligibility in minutes.
- Check your borrowing power: See how much you can borrow with a 5% deposit.
- Compare lenders: We show you options from the full participating list.
- Get approved: We handle the paperwork and talk to the bank for you.
Book a free chat with a Hunter Galloway broker today. Let’s get you into your first home sooner.
Step-by-Step Guide For The First Home Guarantee Scheme
As you can see, the Home Guarantee Scheme has many benefits. You must ensure you are eligible for the scheme and ready to take advantage.
To help you do that, here is our step-by-step guide.
Step 1. Confirm Your Eligibility For the Home Guarantee Scheme
We shared the expanded eligibility criteria earlier in the article, but if you are still unsure whether you qualify, contact our dedicated team of Mortgage Brokers. At Hunter Galloway, we have helped many first-home buyers apply for the scheme.
Step 2. Check To See If You Are Buying An Eligible Property Type
The following property types are eligible:
An existing house, townhouse or apartment
A house-and-land package (land and build with the same provider)
Vacant land with a separate contract to build a home
An off-the-plan apartment or townhouse
Important time frames to consider:
Existing home: move in within 6 months of settlement.
Off-the-plan: contract signed before settlement.
House-and-land: start building within 12 months and finish within 24 months of the loan settlement.
Vacant land + build contract: enter into a fixed-price build contract before loan settlement; start within 12 months and finish within 24 months. (Owner-builder is not eligible.)
Once you’re pre-approved with a participating lender, you’ll generally have 90 days to find and sign a contract of sale, and typically 30 days after signing to finalise loan checks (timelines vary by lender).
Step 3. Collate the Documents Required to Apply for the Home Guarantee Scheme
Provide your broker/lender with:
Full name and date of birth
Medicare number (including your position on the card)
Most recent Notice of Assessment (NOA) and supporting income docs
Standard home-loan documents (ID, payslips, statements, etc.)
Step 4. Determine Which Scheme You Are Applying For
First Home Guarantee (FHBG): 5% deposit, no LMI. Includes returning buyers who haven’t owned property in 10+ years.
Regional First Home Buyer Guarantee (RFHBG): 5% deposit for eligible regional buyers (must have lived in the region for 12+ months).
Family Home Guarantee (FHG): 2% deposit for eligible single parents or single legal guardians with dependants (no need to be a first-home buyer).
Step 5. Speak With A Mortgage Broker to Reserve Your Spot
You can apply directly with a participating lender or work with a mortgage broker.
Why use a broker? We compare products across many lenders, structure your application for success, and coordinate the scheme paperwork.
From 1 October 2025 there is no cap on places, but approvals still depend on meeting lender and scheme rules. To get started, call 1300 088 065 or request a free assessment.
Application Timeline: How Long Do I Have?
Applying for the First Home Guarantee (FHBG) follows a strict timeline. While there are now “unlimited places,” the deadlines for your application are real.
You cannot just get approved and wait forever. Here is the step-by-step timeline we guide you through.
Step 1: Reservation (14 Days)
Once we trigger your application with Housing Australia, the clock starts ticking immediately.
- The Rule: We reserve your “spot” in the government system.
- The Deadline: We have exactly 14 days to submit your full application to the bank.
- Your Job: You must provide all your documents (payslips, ID, bank statements) before this window closes. If you miss it, your reservation expires.
Step 2: The Hunt (90 Days)
Congratulations, you are pre-approved! Now the fun begins.
- The Rule: You have 90 days from the date of your pre-approval to find a property and sign a contract of sale.
- The Reality: This goes faster than you think. You need to be active in the market, attending open homes and making offers.
- Pro Tip: Do not wait until day 89 to make an offer. You need time for the bank to value the property.
Step 3: The Extension (Optional)
Life happens. If you haven’t found a home in 90 days, don’t panic.
- The Rule: We can usually apply for a one-off 90-day extension.
- The Catch: This is not automatic. It is subject to the lender’s policy and Housing Australia’s rules at the time.
- Total Time: If granted, this gives you a maximum of 180 days (approx. 6 months) to buy a home.
Mortgage Broker Insight: “Unlimited Places” does not mean “Unlimited Time.” Since the government removed the cap on places in October 2025, many buyers think they can relax. This is a mistake.
Which Home Guarantee Scheme Is Right For You?
There are now three different Home Guarantee Schemes available under Housing Australia, and understanding which one applies to you can make a huge difference in your home-buying journey. Here’s a breakdown of each:
First Home Guarantee (FHGS)
This scheme allows first home buyers to purchase a home with just a 5% deposit, while the government guarantees the remaining 15%, eliminating the need to pay Lenders Mortgage Insurance (LMI). Even if you’ve owned property before, you can still be eligible as long as you haven’t owned one in the past 10 years.
Regional First Home Buyer Guarantee (RFHBG)
Designed for buyers in regional areas, this scheme also only requires a 5% deposit—but to qualify, you need to have lived in the regional area you’re buying in for at least 12 months. This is ideal for locals who want to buy where they live, work, and raise families.
Family Home Guarantee (FHG)
If you’re a single parent or legal guardian with dependents, the Family Home Guarantee could be a game-changer. It lets you buy a home with as little as 2% deposit—without LMI—even if you’re not a first-time buyer. It’s a helping hand for families trying to get back on their feet.
How Will My First Home Guarantee Loan Be Assessed?
Borrowers will be assessed based on their income, loan amount, and previous history when it comes to buying a house. For your loan to be eligible, you will need to fit the criteria, including:
- A loan is eligible if the Loan to Value Ratio (LVR) is between 80 to 95%
- The 5% deposit should be made up of genuine savings, which is money you have saved or held over 3 months.
- The property’s value doesn’t exceed the price cap for the area.
- You are applying with one of the 32 lenders that can offer the scheme.
- The loan is for a residential property, i.e. an owner-occupier loan.
- There is a maximum of two borrowers who can apply, no more.
- The residential property subject to the loan must be owner-occupied.
- The loan term does not exceed 30 years.
- Repayments must be principal and interest.
Case Study: How Much Can You Actually Save With The First Home Guarantee?
Sarah and James had been renting in Brisbane for years, watching property prices steadily rise and wondering if they’d ever be able to afford their own place. With a baby on the way and limited time to save a massive deposit, the dream of homeownership felt out of reach—until they discovered the First Home Guarantee Scheme.
They found a home they loved for $700,000, but coming up with a 20% deposit—a whopping $140,000—just wasn’t realistic. On top of that, they were staring down the barrel of an additional $39,000 in Lenders Mortgage Insurance (LMI) if they only managed a smaller deposit. All in all, buying without support would’ve cost them around $74,000 upfront, putting a serious strain on their finances.
But with the First Home Guarantee, everything changed. The scheme allowed them to purchase their home with just a 5% deposit—$35,000—and skip the LMI altogether, thanks to the government guarantee. That saved them approximately $39,000, which stayed in their bank account for moving costs, baby gear, and a small emergency buffer.
Instead of waiting years to save more—or giving up on buying entirely—Sarah and James were able to secure their first home in a growing Brisbane suburb, with confidence and financial breathing room.
Can I Switch Lenders Or Move Houses Under The Scheme?
Once you’re approved for the Home Guarantee Scheme, you’ll want to understand how flexible it is. The good news? You can refinance—but there are strict rules.
Can I Refinance My Home Loan?
Yes, but only with another participating lender. You must keep your loan amount and term the same. If you refinance with a non-participating lender or increase your loan amount, you’ll lose the government guarantee and may have to pay LMI.
What Happens If I Sell or Move Out?
The guarantee is only valid while the property is your primary residence. If you sell the home or move out and turn it into an investment property, the guarantee ends. That’s why it’s important to plan for long-term owner-occupancy.
Can I Switch Banks?
Yes—refinancing with another participating lender is allowed, but you must meet the same terms and conditions. Switching lenders outside the scheme removes the guarantee.
Key Trigger Points That End The Guarantee:
- Selling the property
- Refinancing to a non-participating lender
- Moving out
- Changing the loan to interest-only
Pros vs. Cons: Is The Scheme Worth It?
Recent changes have made the scheme accessible to almost everyone, but strict price rules remain. Use this comparison to decide if the benefits outweigh the restrictions.
Pros (The Good) | Cons (The Bad) |
No Income Caps: High earners (e.g., $200k+) are now fully eligible. | Strict Price Caps: You still cannot buy above the new limits (e.g., $1M in Brisbane). |
Unlimited Places: No more “first in, best dressed.” If you are eligible, you get a spot. | No Investment Use: You must live in the property. You cannot rent it out initially. |
Save Huge Fees: Save up to $32,000 in LMI fees immediately. | Refinance Restrictions: You cannot easily switch lenders later without paying LMI. |
First Home Guarantee FAQs
We get asked these questions every day. Here are the honest answers you need to know before applying.
What is the First Home Buyer Scheme in Australia?
It is a federal initiative now called the First Home Guarantee (FHBG). It allows eligible buyers to purchase a home with just a 5% deposit.The government guarantees the remaining 15%, so you don’t pay Lenders Mortgage Insurance (LMI).
Do you still get the First Home Buyer's Grant in Australia?
Yes, but it is separate. The First Home Owner Grant (FHOG) is a state cash payment (e.g., $30,000 in QLD). You can often use both the Guarantee and the Grant together if you build a new home.
What is the 2% deposit for home loans in Australia?
This refers to the Family Home Guarantee (FHG). It is specifically for single parents or single legal guardians. If eligible, you only need a 2% deposit, and the government guarantees the rest
What is the minimum credit score to buy a house in Australia?
There is no official minimum, but most banks want to see a score above 600. Some lenders on the scheme are stricter than others. We can help you check your score for free.
Does the First Home Guarantee mean I don't need a deposit at all?
No. You still need genuine savings. You must have at least 5% of the property’s value (or 2% for single parents).
Do I have to pay the government back later?
No. It is a guarantee, not a cash loan. You do not pay interest on the government’s share, and you do not pay them back unless the bank sells your home at a loss.
Can I still apply if I've owned property before?
Yes, in some cases. The “Fresh Start” rule allows you to apply if you haven’t owned a property in Australia for the last 10 years.
Will I get a spot for the First Home Guarantee this year?
Yes. As of October 2025, the government removed the limit on places. If you meet the criteria and a lender approves you, you get a spot.
What is the maximum income for the scheme?
Great news: There are no income caps.Since October 1, 2025, the government removed the income limits ($125k/$200k).High-income earners can now use the scheme to save on LMI.
How much deposit do I need to save under the Home Guarantee Scheme?
You need 5% of the purchase price. For an $800,000 home, that is $40,000. You also need extra funds for stamp duty and legal fees (unless you get a state exemption).
Can I combine the First Home Guarantee with other government grants?
Yes. You can stack benefits. For example, a QLD buyer could use the Guarantee (5% deposit), the FHOG ($30,000 cash), and the Stamp Duty Concession all at once.
How is the First Home Guarantee different from other home loan schemes?
The Guarantee helps you buy with a low deposit (5%) without LMI. The Help to Buy scheme is different—it is “shared equity” where the government actually owns a share of your house.
What type of home loan do I need with the First Home Guarantee Scheme?
You must apply for a Principal and Interest (P&I) loan.You generally cannot get an “Interest Only” loan under this scheme.
Will I be charged higher interest rates under the First Home Guarantee?
No. Participating lenders must offer you their standard “owner-occupier” rates. You usually get the same rate as someone with a 20% deposit.
Can I withdraw equity from my house while on the scheme?
Generally, no. You cannot “top up” your loan or pull out cash for a car or holiday while the guarantee is active. You must pay the loan down to 80% LVR first.
Can we qualify if my spouse is on a partner visa?
Usually, no. All applicants must generally be Australian Citizens or Permanent Residents.Temporary visa holders (like 482 or 820) are typically not eligible.
Can I buy with a sibling or friend?
Yes. You can now buy with friends, siblings, or other family members.You are no longer restricted to just a spouse or de facto partner.
Can I use the First Home Guarantee to build my own home?
Yes. You can use it for house and land packages.However, strict timelines apply. You must finish building within the time specified by the lender (usually 12-24 months).
Can I purchase the property as a trust or company?
No. You must buy the property as an individual (natural person).
Can I buy a commercial property?
No. The scheme is strictly for residential homes (houses, townhouses, apartments) that you intend to live in.
Do all participating lenders have the same criteria for the scheme?
No. The government has baseline rules, but banks have their own credit policies. One bank might decline you for probation at work, while another might approve you.
How long does the First Home Guarantee remain in place?
It stays until your loan balance drops below 80% of the property value. Once you owe less than 80%, the guarantee naturally falls away.
Can I keep the first home guarantee if I switch banks?
No. If you refinance to a new lender, you lose the government guarantee. If you have less than 20% equity when you switch, you will likely have to pay LMI.
Do I qualify for the First Home Guarantee if I have a low credit score?
It depends. The government doesn’t check your score, but the bank does. If you have defaults or a very low score, major banks may decline you. We have specific lenders who may help.
What is the definition of a de facto partner? Do we need to show proof?
A de facto partner is someone you live with in a genuine domestic basis. Banks often ask for proof like a joint lease, joint bank account, or a statutory declaration
Can I sell my home, buy another one and keep the guarantee?
No. The guarantee applies to that specific loan. If you sell, the loan is paid out and the guarantee ends. You would need to re-apply (if eligible) for a new home.
What happens if I need to move out and rent my property?
Be careful. You must live in the home as your “Principal Place of Residence.” If you move out and rent it, the bank may revoke the guarantee and charge you LMI.
How do I know my home loan is guaranteed?
We will provide you with a Scheme Place ID during the application. Your loan contract will also reference the government guarantee.
Can I apply for the home guarantee scheme if I've already signed a contract?
Yes, but move fast. You usually have 14-21 days for finance in a contract. We need to secure your scheme place and get bank approval within that window.
Do I get a cash payment from the First Home Guarantee?
No. You do not see any cash. The government simply signs a guarantee with the bank on your behalf.
Can I change my loan terms once it's guaranteed?
Restricted. You usually cannot increase the limit or change to “Investment” status. You can usually change from variable to fixed rate without issues.
Do lenders' postcode restrictions still apply under the scheme?
Yes. Even with the scheme, banks may not lend in certain high-risk postcodes (e.g., small mining towns or high-density inner-city zones).
What happens if the valuation is higher than the price threshold?
You will be declined.If the price cap is $1,000,000 and the bank values the home at $1,005,000 (or you buy for that price), you are ineligible. We check this before you sign.
Bonus: What Other Government Grants Am I Eligible For?
As a first home buyer, there are many other grants available to you. You can use these schemes together with the First Home Guarantee Scheme:
- First Home Super Saver Scheme – allows you to use your super account to save for a deposit for your first home, taking advantage of the favourable tax treatment.
- First Home Owners Grant – is a once-off grant given to first homeowners to add to their deposit. It is actual cash that the government gives you.
- Stamp Duty Concessions – As a first homebuyer, you are eligible for stamp duty waivers and discounts, which can save you thousands of dollars.
Next Steps To Apply For The Home Guarantee Scheme
Ready to apply for the scheme, but don’t know where to start? Our team at Hunter Galloway will help you apply for your Home Guarantee Scheme and secure a home loan.
Unlike other mortgage brokers, who are one-person operations, we have an entire team of experts dedicated to making your home loan journey as simple as possible.
If you want to get started, please give us a call on 1300 088 065 or book a free assessment online to see how we can help.
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