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Are you struggling to raise a 20% deposit? What if we told you, you could buy a home with just a 5% deposit? The best part – you won’t have to pay Lenders Mortgage Insurance! This is possible through the First Home Guarantee Scheme, which is a government scheme designed to help first-home buyers buy property sooner.
In this article, we will tell you everything you need to know about the First Home Guarantee Scheme and the EXACT steps to apply for it.
So, if you want to stop renting and jump onto the property ladder in 2025, you’ll love this comprehensive guide.
What Is The Home Guarantee Scheme?
The First Home Guarantee (previously known as the First Home Loan Deposit Scheme or the New Home Guarantee) 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, though:
- The scheme is only eligible for properties worth up to $700,000 in Brisbane.
- In other areas of Queensland, the price cap is $550,000. (For other states, see below.)
- You must be living in the property.
- It’s not available for investment properties.
- The scheme is limited to 35,000 spots per financial year, so you may miss out if you don’t apply quickly enough.
Home Guarantee Scheme Expanded Eligibility in 2025
In 2023, the Home Guarantee Scheme eligibility criteria underwent changes that opened the door for many more Australians to dive into the property market. Here is the expanded list of the eligibility criteria for 2025:
Requirement | Eligibility |
Taxable Income | Single applicants: up to $125,000 taxable income per year Couples: up to $200,000 combined taxable income |
Deposit | At least 5% deposit, up to a maximum of 20% deposit |
First Home Buyer | You must not have owned property in Australia before. But if you have owned a property before, you can still qualify, as long as it’s been at least 10 years since you owned the property. |
Property Type | An existing house, townhouse or apartment OR a house and land package OR Land and separate contract to build a home OR an off-the-plan apartment or townhouse. |
Citizenship | Australian citizens and Australian permanent residents are eligible. |
Property Price Cap | Up to $700,000 in Brisbane, Gold Coast, and Sunshine Coast. Up to $550,000 for the rest of Queensland. (We cover other states below) |
Minimum Age | Aged 18 years and older |
Living Arrangement | You must move in and live in the property as your home within 6 months. If you move out of the home you are no longer covered by the scheme. |
Relationship | You can apply as a single person, married couple or in a de facto relationship. You can also team up with your friends, siblings or other family members to apply for the First Home Guarantee Scheme and the Regional First Home Buyer Guarantee |
Buying type | You must be buying as an individual not as a company or (family) trust. The First Home Guarantee Scheme is only for residential properties and not commercial. |
Banks | Only 27 lenders can offer the scheme. The lenders that are participating include CBA, NAB and some non-major lenders include Bendigo Bank, Bank Australia & Teachers Mutual Bank. |
Single Parents | Single legal guardians of kids, including aunts, uncles, and grandparents, are now eligible for the Family Home Guarantee. Previously the scheme was only for single parents not guardians. |
If you are unsure whether or not you qualify, get in touch with our team, and we can guide you through your eligibility – 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.
Ordinarily, you’d need at least a 20% deposit to avoid paying lenders mortgage insurance, which is a one-off insurance added to the loan. With the First Home Guarantee Scheme, you avoid the LMI fees as the government provides a guarantee of up to 15% of the value of your home.
However, your home loan and Home Guarantee Scheme Application will still be subject to regular home loan considerations, such as borrowing capacity, credit checks, and suitable employment.
A limited number of spots are released in the scheme every financial year and released on a first-come, first-served basis.
Hunter Galloway is an accredited Mortgage Broker. Through our pre-approval loan process, we can help you reserve your place in the Home Guarantee Scheme.
If you are considering your eligibility for the scheme or would like to reserve a place call us on 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 first home.
What Are The Property Price Limits For The First Home Guarantee Scheme?
The scheme has been designed to help lower to middle-income earners struggling to buy their first home. So, if you want to buy a million-dollar luxury home, this scheme is not for you. Below are the property price caps for the First Home Guarantee Scheme around Australia.
The Home Guarantee price limits vary depending on the state or territory and whether you’re looking to buy in a city, large regional centre or other regional area.
Area | Capital City And Regional Areas | Rest Of State |
New South Wales | $900,000 | $750,000 |
Victoria | $800,000 | $650,000 |
Queensland | $700,000 | $550,000 |
Western Australia | $600,000 | $450,000 |
South Australia | $600,000 | $450,000 |
Tasmania | $600,000 | $450,000 |
Australian Capital Territory | $750,000 | |
Northern Territory Regional | $600,000 | |
Jervis Bay Territory and Norfolk Island | $550,000 | |
Christmas Island and Cocos (Keeling) Islands | $400,000 |
Source: Housing Australia
What determines the higher price caps?
Throughout the country, some regional centres are allocated higher price caps. This means that the buyers can purchase at a higher price and still be eligible for the deposit scheme. The population of the region determines this.
The government outlines that regional centres with over 250,000 people, like the Gold Coast, Geelong and Newcastle, will have a higher price cap.
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 of the limited number of spots.
To help you do that, here is our step-by-step guide.
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.
2. Check To See If You Are Buying An Eligible Property Type
The following property types are eligible for the First Home Guarantee Scheme:
- An existing house, townhouse or apartment
- A house and land package (meaning you buy the land and contract to build from the same person)
- A vacant land together with a separate contract to build a home
- An off-the-plan apartment or townhouse
Important time frames to consider for each property type.
If you are buying an existing home – you must move into the property within 6 months of settlement. Your contract of sale must be on or after January 1 2020.
If you are buying an off-the-plan property (i.e., one that has not been built yet), you must have signed the contract before the settlement date.
If you are buying a land and house package – you will need to start building within 12 months and finish within 24 months of the settlement date of your loan.
If you are buying vacant land, you will need to enter into an eligible building contract before settlement of your home loan. You will also need to start building within 12 months and finish within 24 months of the settlement date of your loan. If you already own land and intend to get a construction loan to build the house, you will not be eligible for the home guarantee scheme.
Once you’ve been pre-approved for a home loan by one of the participating lenders, you’ll have 90 days to find and sign a contract of sale for an eligible property you want to buy.
Finally, once you’ve signed a contract of sale, you’ll have an additional 30 days from the signing date to finalise the paperwork and checks for your home loan.
3. Collate the Documents Required to Apply for the Home Guarantee Scheme
You’ll need to submit the following information to your mortgage broker or a participating lender.
- Your full name and date of birth;
- Your Medicare number (including your position on the card);
- Your Notice of Assessment (NOA) for your taxable income. For reservations made from July 1 2023, to June 30 2024, the relevant NOA is for the 2022-2023 financial year.
- Other standard home loan documents.
4. Determine Which Scheme You Are Applying For
The First Home Guarantee Scheme is open to those who have never owned a home or haven’t owned a home in the past 10 years. It is open to singles, couples, and anyone who wants to buy jointly.
The Family Home Guarantee, on the other hand, is only open to single parents or single legal guardians of kids, including aunts, uncles, and grandparents.
5. Speak With A Mortgage Broker to Reserve Your Spot
To apply for the First Home Guarantee, you can choose to apply directly with a lender or get help from a mortgage broker.
Important: Housing Australia does not accept direct applications. You will need to work with a lender or a broker to confirm your eligibility for the scheme.
The advantage of working with a broker is that we can find you the best loan for your specific needs. Working with one specific lender will limit your options.
We can now reserve a spot for you in the First Home Guarantee. The spot is subject to availability and can be held for up to 14 calendar days. This period cannot be extended. You must submit your application within these 14 days. If it meets the requirements, we can move on to obtaining a certified guarantee.
Once you’ve been pre-approved for a home loan by one of the participating lenders, you’ll have 90 days to find and sign a contract of sale for an eligible property that you want to buy.
Finally, once you’ve signed a contract of sale, you’ll have an additional 30 days from the signing date to finalise the paperwork and checks for your home loan.
To secure a spot in the First Home Guarantee, call us on 1300 088 065 or complete our free assessment form.
What happens if all of the spots in the First Home Guarantee are taken?
If all the spots in the First Home Guarantee scheme are filled, we can put you on a waiting list. If a spot opens up, we will notify you.
How Will My Home Guarantee Loan Be Assessed?
Borrowers will be assessed by 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 applying, 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.
First Home Guarantee FAQs
General
There are currently 32 lenders (bank and non-bank) offering the scheme. These include CBA, NAB, Westpac and many others. Get the full list here,
To control costs, the government limits the number of first-time home buyers who can take up the scheme each year. Currently, only 35,000 spots are allocated among 32 participating lenders. Spots are filled on a first-come-first-serve basis. This is why you need a mortgage broker to make sure you submit your application on time and that it does not contain errors, as that may delay your application.
Under the First Home Guarantee Scheme, you will need a 5% deposit up to a maximum of 20%. If you have more than 20% saved up, you won’t have to pay LMI, which means you are not eligible for the scheme. Important: You will have to cover all the other costs associated with buying a house, so aim to have a little more than 5% just to be safe.
The First Home Guarantee works with other government initiatives. You can combine it with other grants or schemes if you qualify. For example, in Queensland, you can take advantage of a full stamp duty waiver if you are buying a house for $700,000 or less.
If you break the rules of the First Home Guarantee, you might face penalties or lose the guarantee. This could make you responsible for any costs the guarantee would have paid for. It’s important to understand and follow all the terms and conditions to avoid negative consequences.
The First Home Guarantee is special because it helps first-time home buyers with a smaller deposit and no mortgage insurance. Other programs provide money or tax benefits, but the First Home Guarantee focuses on making it easier to buy a house.
Home Loans
Usually, the First Home Guarantee doesn’t punish you for paying off your loan early. But your loan terms with the lender might be different. Make sure to read your loan agreement for any fees or penalties for early repayment.
The FHBG does not guarantee:
- Helping you make missed payments on your home loan
- Preventing you from defaulting on your home loan
- Stopping the lender from taking action against you for defaulting on your home loan or mortgage
- Covering any remaining amounts owed to the lender after the sale of the property or claiming the guarantee.
If you face financial difficulties in the future, you should contact your lender to see what options are available to you.
Your home loan must be owner-occupier, and your repayments should be principal and interest. Talk to us about other home loan features you can use with the scheme.
No. Participating lenders won’t charge eligible first-home buyers a higher interest rate. If you’re successful, you’ll get the same interest rates as mortgages outside this scheme.
The guaranteed home loans have standard terms, conditions, and consumer laws.
If you can’t make payments, contact your lender/bank right away. Don’t wait until you default. If you reach out early, you may have options.
If you apply under the First Home Guarantee, you can still access better interest rates. A mortgage broker can help you get a good interest rate for your home loan. They do this by making a pricing request for you.
This is a standard part of our application process at Hunter Galloway, and we’ll do the same for you.
The first home guarantee requires your home loan to remain the same. Therefore, you cannot withdraw equity as that would require you to refinance the loan.
Eligibility
To be eligible for the first home guarantee scheme, your income needs to be below the following thresholds:
$125,000 before tax for single people
$200,000 before tax if applying with a partner
You and your spouse both need to be Australian citizens or permanent residents. You would not be eligible for the scheme if your spouse is on a partner visa. Previously, the scheme was not open to permanent residents, but now they are eligible.
Yes. Under the new conditions, you can buy with a sibling, friend or parent.
You can still qualify for the first home guarantee scheme if you have owned property before, as long as it has been 10 or more years since you last owned that property.
No. Owner-builder contracts are not eligible for the scheme. However, if you are buying land and signing a building contract, you will be eligible. In other words, you can get a construction loan.
No. The First Home Guarantee is only available to borrowers who enter into a contract of sale as an individual under their own name.
Purchasing as a trust or company is not allowed.
No. The First Home Guarantee is for residential properties only.
Almost all types of properties are eligible:
- An existing house, townhouse or apartment
- A house and land package
- A vacant land together with a separate contract to build a home
- An off-the-plan apartment or townhouse
Yes, all participating lenders follow the same eligibility for the scheme.
However, each lender has their own specific lending criteria that you must meet to qualify for a loan.
That’s why we recommend working with a broker to secure your spot in the scheme: we can find you the best loan across all lenders.
The guarantee will last until:
- You sell your property
- You move out of your home
- You refinance your home loan or;
- Your loan-to-value ratio falls below 80% of the purchase price.
You can keep the guarantee if you move your guaranteed loan between two participating lenders. If you do this, you can’t increase the loan amount or term, and the loan should remain eligible as defined in the scheme rules. If you move to a non-participating lender, you cannot keep the scheme.
Your eligibility for the Home Guarantee itself isn’t affected by your credit score. However, you will still need to pass the credit scoring of the participating lenders.
If you have a low credit score, there are some participating lenders who will still approve your loan.
Speak with a broker to find out which lender is best suited for your circumstances.
A de facto relationship is defined as:
- Not legally married to each other;
- Not related by family and
- Have a relationship as a couple living together on a genuine domestic basis.
There’s no requirement to show proof of a de facto relationship outside of the First Home Buyer Statutory Declaration form that you need to sign.
Property Ownership
Yes, but only if your spouse has not owned a property within the past 10 years. If either of you have owned or held an interest in property in the past 10 years, you will not be eligible.
You can sell your home at any time. However, your home loan will cease to be guaranteed under the scheme, and you will no longer be eligible.
If you move out and rent your property, you will no longer be covered by the first home guarantee.
Your guarantee will expire when you sell your property.
Application Process
If you apply for a loan backed by the First Home Guarantee, your lender will let you know if you got a spot. From there, you will have 14 days to get pre-approved with your lender.
It depends on the type of property you’re buying.
If you’re buying an existing home, you must sign a contract on or after January 1, 2020.
For an off-the-plan purchase, you must sign the contract before your loan settles. The settlement date must be within 90 days of your loan being guaranteed.
Yes. If you still meet the requirements, you can reapply for the scheme at a later date.
No. The First Home Guarantee is not a cash payment. It is just a guarantee.
You will know your application is moving forward when:
- Your lender tells you they saved your spot for 14 days.
- You got pre-approved (with conditions) for a home loan.
- You read the guide and filled out the First Home Buyer Declaration form (one for each borrower).
You can’t change the loan term for loans guaranteed under the First Home Guarantee.
To alter your loan terms, you would need to refinance the home loan.
During the guarantee period, you can make limited changes, like splitting or fixing the loan.
Rate changes are possible if you still meet the eligibility criteria (i.e., you’re not switching to an investment loan or an interest-only loan).
Yes, Lenders will still have specific restrictions on property locations.
For some postcodes, the banks may limit the LVR to less than 80%. LMI doesn’t apply in these cases, and the property won’t be eligible.
Not all lenders have location restrictions. If one lender rejects your property, others may accept it.
If the bank valuation is higher than the property threshold, you will not be eligible for the scheme – even if the contract of sale value is below the threshold.
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. Leave a quick message here and our Mortgage Brokers will be in touch within 4 business hours.
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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