The First Home Guarantee Scheme is an Australian Government initiative to support eligible first home buyers to buy a home sooner. Under the First Home Guarantee Scheme, the Government will provide a limited loan guarantee of up to 15% of the home value. This may enable you to buy your first home with a deposit of only 5%1 and no lenders mortgage insurance (LMI) will be payable.
In 2024/25, 35,000 home loans are available under the First Home Guarantee Scheme.
To be eligible for the First Home Guarantee Scheme, you must:
For more information about the types of properties that may be eligible and important timeframes, see housingaustralia.gov.au.
Under the scheme, you’re able to purchase an eligible residential property which includes:
Certain requirements apply depending on the type of property and contract you’re entering into.
Caps apply to the purchase price to ensure participation is spread fairly across the country. The capital city price caps will apply to large regional centres with a population over 250,000, namely the Gold Coast, Newcastle and Lake Macquarie, the Sunshine Coast, Illawarra (Wollongong) and Geelong.
| Price caps for 2024/25 | ||
|---|---|---|
| State/territory | Capital city and regional centres | Rest of state |
| NSW | $900,000 | $750,000 |
| VIC | $800,000 | $650,000 |
| QLD | $700,000 | $550,000 |
| WA | $600,000 | $450,000 |
| SA | $600,000 | $450,000 |
| TAS | $600,000 | $450,000 |
| ACT | $750,000 | |
| NT | $600,000 | |
| Jervis Bay Territory and Norfolk Island | $550,000 | |
| Christmas Island and Cocos (Keeling) Islands | $400,000 | |
While the First Home Guarantee Scheme may help you buy your first home sooner, you need to keep in mind that a smaller deposit means a bigger loan. And a bigger loan means bigger loan repayments, as well as higher total interest payments over the life of the loan. It may be the case that the additional interest payable outweighs the LMI savings. To find out whether the First Home Guarantee Scheme is right for you, you may want to speak to a financial adviser.
Also, if you move out of your home for an extended period of time and rent your home out, the loan may no longer be guaranteed by the Government. You may need to pay additional fees and charges, as well as LMI, depending on factors such as the value of your home and your outstanding debt at that point.
Applications can be made directly via one of the approved lenders or their authorised representative (such as a mortgage broker). Housing Australia has authorised a specific panel of participating lenders to offer the Home Guarantee Scheme to home buyers.
You’ll need to meet your lender’s normal credit criteria to ensure you can service a loan of up to 95% and provide evidence you’ve saved the 5% deposit. Loans must be principle and interest (not interest only) and terms can be up to 30 years.
The First Home Guarantee scheme complements (but doesn’t directly interact with) other Government assistance programs. These may include the:
To find out more about the First Home Guarantee and ways to fund the purchase of your first home, we recommend you seek financial advice. You can also find out more at housingaustralia.gov.au.
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