What Is First Home Guarantee Scheme?
The Australian government introduced the First Home Guarantee Scheme under Home Guarantee Schemes to help borrowers with a deposit of at least 5% qualify for a home loan without paying any Lenders Mortgage Insurance (LMI).
Typically, to avoid paying LMI, you need a 20% deposit. However, under this scheme, eligible borrowers can avoid LMI even with a deposit as low as 5%.
First Home Guarantee Scheme Eligibility
Below are the eligibility details for First Home Guarantee (FHBG):
- Applicants: You can apply as an individual or as two joint applicants. Friends, siblings and other groups of family members can jointly apply.
- Residency: Must be an Australian citizen or permanent resident
- Age: Must be at least 18 years old.
- Income: Annual income must not exceed $125,000 for individuals or $200,000 for joint applicants, as stated on their most recent Notice of Assessment from the Australian Taxation Office.
- Deposit Requirement: Applicants need between 5% and 20% of the property’s value as a deposit. The minimum is 5%, but lenders may ask for a higher percentage based on financial circumstances.
- Ownership History: Applicants must be first-home buyers or previous homeowners who have not owned or had any interest in real property (including land) in Australia in the past 10 years.
- Occupancy: Must intend to live in the purchased property as an owner-occupier.
- Costs: Eligible buyers are responsible for all associated costs, such as stamp duty, application fees, and legal fees.
- Price Caps: FHBG have property price caps ranging from $40,000 to $900,00, which vary between states and territories.
What Are The Benefits of the Home Guarantee Scheme?
- You don’t have to wait and save for a large deposit.
- First-home buyers can use the scheme with other grants and concessions
- You can potentially save thousands in LMI fees.
| Value of the property | How much are you borrowing | LVR | LMI saved |
| $950,000 | $902,500 | 95% | $39,273 |
| $850,000 | $807,500 | 95% | $35,139 |
| $750,000 | $712,500 | 95% | $31,005 |
| $650,000 | $617,500 | 95% | $26,871 |
| $550,000 | $522,500 | 95% | $22,737 |
The figures in this table are estimates. You can contact us to understand how much you can save in different states and territories.
What Are The Price Caps For The Home Guarantee Scheme?
| Region | 2024-25 Price Caps* |
| NSW – Sydney & regional centres (Newcastle, Lake Macquarie & Illawarra) | $900,000 |
| NSW – rest of state | $750,000 |
| VIC – Melbourne & regional centre (Geelong) | $800,000 |
| VIC – rest of state | $650,000 |
| QLD – Brisbane & regional centres (Gold Coast & Sunshine Coast) | $700,000 |
| QLD – rest of state | $550,000 |
| WA – Perth | $600,000 |
| WA – rest of state | $450,000 |
| SA – Adelaide | $600,000 |
| SA – rest of state | $450,000 |
| TAS – Hobart | $600,000 |
| TAS – rest of state | $450,000 |
| ACT | $750,000 |
| Northern Territory | $600,000 |
| Jervis Bay Territory & NorfolkIsland | $550,000 |
| Christmas Island and Cocos (Keeling) Islands | $400,000 |
*The 2024-25 price caps are applicable for the First Home Guarantee from July 2024.
How To Apply For The First Home Guarantee Scheme?
You will need to send your application to a participating lender. We can help you with your application. Call us on 0423 459 480.
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