The First Home Guarantee (FHBG) is one of the most powerful tools available to first home buyers in Australia — yet most people either don't know it exists or misunderstand how it works. In short: the federal government guarantees up to 15% of your deposit, so you can buy with just 5% down and avoid paying Lenders Mortgage Insurance entirely.

What is the First Home Guarantee?

The First Home Guarantee (previously called the First Home Loan Deposit Scheme) is a federal government initiative administered by Housing Australia. Under the scheme, the government acts as a guarantor for the portion of your deposit between 5% and 20%. This eliminates the need for Lenders Mortgage Insurance (LMI), which typically costs $10,000–$40,000 when your deposit is less than 20%.

Example: You want to buy a $600,000 home. Normally you'd need a $120,000 deposit (20%) to avoid LMI. Under the FHBG, you only need $30,000 (5%). The government guarantees the remaining 15% — you don't pay LMI and you don't owe the government anything extra.

Who is eligible?

To access the First Home Guarantee you must:

Be an Australian citizen or permanent resident aged 18 or over
Be a first home buyer (never previously owned or had a financial interest in a property in Australia)
Earn under $125,000 (singles) or $200,000 (joint applicants) in the previous financial year
Purchase a property under the price cap for your state and property type (see below)
Live in the property as your principal place of residence (investment purchases are not eligible)
Have a genuine 5% deposit saved (not borrowed and not from a gift, with some exceptions)

Price caps by state (2024–25)

The scheme has maximum property price limits that vary by state and location:

NSW: $900,000 (major cities), $750,000 (regional)
VIC: $800,000 (major cities), $650,000 (regional)
QLD: $700,000 (major cities), $550,000 (regional)
WA: $600,000 (major cities), $450,000 (regional)
SA: $600,000 (major cities), $450,000 (regional)
ACT: $750,000
TAS: $600,000 (major cities), $450,000 (regional)
NT: $600,000

Always verify current caps at the Housing Australia website as they are updated annually.

How many places are available?

The government releases 35,000 FHBG places per financial year. Places are allocated on a first-come, first-served basis through participating lenders. The scheme is popular and places can run out during peak periods — apply early in the financial year (July–September) for the best chance.

Which lenders participate?

You can only access the FHBG through participating lenders. These include the major banks (CBA, NAB, ANZ, Westpac) plus a range of smaller banks and credit unions. Not all lenders offer competitive rates under the scheme — a mortgage broker can identify which participating lender offers the best rate for your situation.

Tip: The lender sets the interest rate — the government only provides the guarantee. Getting a broker to compare participating lenders can save thousands over the life of your loan even when using the FHBG.

What types of property qualify?

Eligible property types include:

Existing houses, townhouses, and apartments
New builds (house and land packages, off-the-plan apartments)
House and land packages

Investment properties, vacant land without an associated build contract, and commercial properties are not eligible.

Related schemes you should know

The FHBG is one of three similar guarantees. Depending on your situation, you may be eligible for:

Regional First Home Buyer Guarantee: 10,000 places/year for buyers purchasing in regional Australia (same income caps, lower price caps)
Family Home Guarantee: 5,000 places/year for single parents (including those who have previously owned property) with a 2% minimum deposit

How to apply

Check your eligibility using the Housing Australia eligibility checker
Choose a participating lender or use a mortgage broker who works with multiple participating lenders
Apply for pre-approval with your chosen lender — they will apply for a FHBG place on your behalf
Once pre-approved and a FHBG place is reserved, proceed with your property search
Settlement proceeds as normal — the guarantee is in place behind the scenes

What's the catch?

The FHBG is genuinely a good deal — but there are a few things to understand:

You're still borrowing 95% of the purchase price, so your monthly repayments will be higher than if you'd saved a 20% deposit
If property values fall and you needed to sell early, you may be in negative equity with a very small buffer
The government guarantee is not free money — it's a risk transfer that allows the lender to approve a high-LVR loan without charging LMI. You still have the full loan to repay.

Use our LMI Calculator to see exactly how much you'd save versus paying LMI, and our Borrowing Capacity Calculator to understand how much you can borrow.