The First Home Guarantee (FHBG) (previously the First Home Loan Deposit Scheme) is a federal government initiative that helps eligible first home buyers purchase a home with a deposit as low as 5% without paying Lenders Mortgage Insurance (LMI). The government, through Housing Australia (formerly NHFIC), guarantees up to 15% of the property's value, allowing lenders to offer loans with only a 5% deposit.
How It Works
Under the FHBG, Housing Australia provides a guarantee to a participating lender for up to 15% of the property's value. This means you only need a 5% deposit and you won't have to pay LMI, potentially saving you tens of thousands of dollars.
Key Benefits
- Low deposit: Buy with as little as 5% deposit
- No LMI: Save $10,000–$30,000+ in Lenders Mortgage Insurance
- No ongoing fees: The guarantee doesn't charge you an ongoing fee
- Available for single applicants and joint applicants
Eligibility Criteria (2026)
| Requirement | Details |
|---|---|
| Citizenship | Australian citizen or permanent resident |
| Age | 18 years or older |
| Income cap (single) | No income cap — removed from 1 October 2025 |
| Income cap (couple) | No income cap — removed from 1 October 2025 |
| Property type | Existing house, townhouse, apartment, or house-and-land package |
| Occupancy | Must move in within 12 months — no investment properties |
| Prior property | Must not have owned property in Australia before |
Property Price Caps (2025–26)
Property price caps vary by location. Here are the caps for major cities and regions:
| Location | Price Cap |
|---|---|
| NSW — capital city and regional centres | $1,500,000 |
| NSW — other areas | $800,000 |
| VIC — capital city and regional centres | $950,000 |
| VIC — other areas | $650,000 |
| QLD — capital city and regional centres | $1,000,000 |
| QLD — other areas | $700,000 |
| WA — capital city | $850,000 |
| WA — other areas | $600,000 |
| SA — capital city | $900,000 |
| SA — other areas | $500,000 |
| TAS — capital city | $700,000 |
| TAS — other areas | $550,000 |
| ACT | $1,000,000 |
| NT — capital city | $750,000 |
| NT — rest of territory | $600,000 |
How to Apply
- Check your eligibility using the Housing Australia eligibility tool
- Find a participating lender (most major banks and many smaller lenders participate)
- Get pre-approval — your lender will assess your application and let you know if places are available
- Find a property within the price cap
- Complete your purchase with your 5% deposit — no LMI required
Places Available — Unlimited Since October 2025
From 1 October 2025 the Home Guarantee Scheme was expanded: the cap on the number of government guarantees was removed entirely, income caps were abolished, and property price caps were raised across the country. This means every eligible first home buyer with a 5% deposit can access the guarantee — there is no annual quota to compete for. The separate Regional First Home Buyer Guarantee was folded into the First Home Guarantee, so regional buyers use the same application path. Demand remains strong, so it still pays to get pre-approval early, but you no longer need to race a place counter.
Related Guides
- How to save a deposit faster
- First Home Owner Grant by state
- Help to Buy shared equity scheme
- Stamp duty concessions by state
This information is for general guidance only. Check the Housing Australia website for the most current eligibility criteria and price caps.
What Changed in October 2025
The Home Guarantee Scheme was overhauled from 1 October 2025, and the changes matter if you are applying now. First, the annual cap on places was removed — previously around 35,000 places a year, the guarantee is now available to every eligible first home buyer, so there is no quota race. Second, the income caps (which had been $125,000 for singles and $200,000 for couples) were abolished entirely. Third, property price caps were raised across the board to better reflect median prices — for example, from $900,000 to $1.5 million in Sydney and from $700,000 to $1 million in south-east Queensland. The Regional First Home Buyer Guarantee was also folded into the main scheme.
How the guarantee works mechanically: Housing Australia gives a guarantee to your participating lender for up to 15% of the property's value. That guarantee is what lets the lender offer you a 95% loan-to-value ratio without LMI — if you default and the sale doesn't cover the loan, Housing Australia makes up the shortfall, not you. You still pay the same interest rates and you still need to service the full loan; the guarantee only replaces LMI.
Action Plan: Applying in 2026
- Confirm your eligibility: Australian citizen or permanent resident, 18+, never owned property in Australia, and intending to live in the home.
- Check the price cap for your area (see table above) — the property must be at or below it.
- Talk to a participating lender (most major banks and many smaller lenders) and get pre-approval for a 5% deposit loan.
- Save your 5% deposit plus buying costs — stamp duty (if any), conveyancing, and inspections.
- Buy within your cap and move in within 12 months of settlement — the guarantee is not available for investment properties.