First Home Guarantee Scheme

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.

From 1 October 2025, the First Home Guarantee (FHBG) has been expanded:

👉 Remember: this is a government guarantee to your lender, not a cash grant. You remain fully responsible for your loan and repayments.

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:

There are a couple of limitations/rules to keep in mind:

You can apply on your own or jointly (including with friends or family). Here’s the eligibility snapshot from 1 October 2025:

If you’re unsure whether you qualify, get in touch with our team and we’ll guide you for free.

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.

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.

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.

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.

Price limits have increased significantly to reflect the current market. These limits vary by state and region.

Source: Housing Australia (Updated October 2025)

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:

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.

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.

Three of the “Big Four” banks currently participate in the scheme.

Many smaller lenders offer great service and competitive rates under the scheme.

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.

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.

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.

Book a free chat with a Hunter Galloway broker today. Let’s get you into your first home sooner.

With the removal of the annual cap on places, the “race” to snag a spot has evolved. However, while availability is now unlimited, the bank and government deadlines for your specific application remain strict.

You cannot simply get approved and wait indefinitely. Here is the streamlined, step-by-step process we guide you through under the current “unlimited” model.

Before diving into paperwork, you need to identify which pathway fits your situation. While there is no longer a cap on places, approvals still depend on meeting strict government and lender rules.

Once we identify the right scheme, we move into the documentation phase. Even though places are unlimited, the formal processing clock begins once we initiate your application with a participating lender.

While you hunt for a home, ensure the property is eligible. Different types have different “move-in” and construction timelines:

Congratulations, you are pre-approved! This is where your search truly gains momentum.

If the right house hasn’t appeared within three months, there is a safety net.

Mortgage Broker Brisbane Insight: “Unlimited Places” does not mean “Unlimited Time.” While you no longer have to worry about the scheme ‘running out’ of spots mid-year, the internal deadlines for pre-approvals are still legally binding. Using a broker helps you navigate these timelines, as we coordinate the paperwork and structure your application for success across multiple lenders.

Ready to get started? Call us on 1300 088 065 or book a free assessment online to see how we can help you secure your home.

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:

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.

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.

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.

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:

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.

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.

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.

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.

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.

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.

We get asked these questions every day. Here are the honest answers you need to know before applying.

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:

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.