Facts checked on 28 September 2026 against firsthomebuyers.gov.au (Housing Australia) and the Scheme Information Guide.
The short answer: The First Home Guarantee is now part of the Australian Government 5% Deposit Scheme, an Australian Government scheme administered by Housing Australia. It lets eligible first home buyers buy with a deposit of at least 5% without paying Lenders Mortgage Insurance (LMI), because the Government guarantees part of the loan to the lender. Since 1 October 2025 there are no income caps and no limit on places. Property price caps, owner-occupier rules and the lender’s own credit criteria still apply, and a smaller deposit means a bigger loan.
What is the First Home Guarantee called now?
Housing Australia says the Australian Government 5% Deposit Scheme “was formerly known as the Home Guarantee Scheme”. Most people still search for it as the First Home Guarantee. The Scheme now covers two groups:
- First home buyers, with a minimum 5% deposit
- Single parents or legal guardians, with a minimum 2% deposit
You can’t apply to Housing Australia directly. The Scheme is only available through a Participating Lender, as part of a home loan application.
How does the guarantee work?
Normally, if you borrow more than 80% of a property’s value, the lender charges Lenders Mortgage Insurance. Moneysmart explains that LMI “does not benefit the borrower, it only protects the lender”.
Under the Scheme, the Government guarantees part of your loan to the lender, up to 15% of the property value (Scheme Information Guide). Your deposit of at least 5% plus the guarantee of up to 15% covers the usual 20% gap, so the lender doesn’t charge LMI while the guarantee applies.
The guarantee protects the lender, not you. You still owe the full loan and are responsible for all repayments and costs. If the home ever has to be sold because the loan can’t be repaid, the sale proceeds go first towards what you owe the lender. The Information Guide explains how any shortfall is handled, so read that section before you commit.
Who is eligible in 2026?
According to firsthomebuyers.gov.au, you need to:
- be an Australian citizen or permanent resident, at least 18 years old
- have saved a minimum deposit of 5% (2% for eligible single parents or legal guardians)
- be a first home buyer, or not have owned property or land in Australia in the last 10 years
- be buying a home in Australia priced at or below the price cap for that location
- plan to live in the home as an owner-occupier (investment properties aren’t eligible)
- apply for an owner-occupier, principal-and-interest home loan of up to 30 years from a Participating Lender (plus up to three years to build a new home)
- apply on your own or jointly with one other person (a partner, friend or family member).
On top of that, you must meet the Participating Lender’s own credit policy. In Housing Australia’s words, “Even if you are eligible for the Scheme, you may not get a home loan if you do not meet the lending requirements of your Participating Lender.”
What are the property price caps?
Both the purchase price and the lender’s valuation must be at or below the cap. If you’re building on vacant land under separate contracts, the land and build costs together must come in under the cap.
| State or territory | Capital city and regional centres | Other areas |
|---|---|---|
| New South Wales | $1,500,000 | $800,000 |
| Victoria | $950,000 | $650,000 |
| Queensland | $1,000,000 | $700,000 |
| Western Australia | $850,000 | $600,000 |
| South Australia | $900,000 | $500,000 |
| Tasmania | $700,000 | $550,000 |
| Australian Capital Territory | $1,000,000 (all areas) | n/a |
| Northern Territory | $750,000 (capital city) | $600,000 |
Source: firsthomebuyers.gov.au, Property Price Caps, checked 28 Sep 2026. In NSW, the regional centres are Central Coast, Coffs Harbour–Grafton, Illawarra, Mid North Coast, Richmond–Tweed, and Newcastle and Lake Macquarie.
For south-west Sydney buyers, Bankstown and surrounding suburbs fall within Sydney, but caps are set by postcode. Always confirm the cap for the exact suburb and postcode with the Postcode Search Tool on firsthomebuyers.gov.au and with your lender.
How do you apply?
- Check eligibility with the online tool on firsthomebuyers.gov.au, and read the Scheme Information Guide.
- Apply through a Participating Lender. You’ll need identity and citizenship or residency documents and a completed Home Buyer Declaration.
- Find a home. Once pre-approved, you have 90 days to find a home and sign a contract of sale.
- Settle. The lender manages the final approvals.
Where a broker fits: Click Financial is a mortgage broker, not a lender and not a government agency. We can check which Participating Lenders on our panel of 30+ lenders suit your situation, compare their loans on total cost and features, and manage the application with the lender you choose.
What the Scheme doesn’t do: the trade-offs
The Scheme can help you buy sooner, but it’s worth being clear about what it doesn’t change.
- It isn’t loan approval. Scheme eligibility and loan approval are two separate tests.
- A smaller deposit means a bigger loan. Borrowing 95% of the price instead of 80% means larger repayments and more interest over the life of the loan. It also leaves less of a buffer if property values fall.
- The obligations continue after settlement. To keep the guarantee you must keep living in the home. According to the Information Guide, the guarantee can end if you rent the property out, stop living there without an exemption, borrow more against it, or refinance to a lender that isn’t a Participating Lender. If that happens while your loan is still above 80% of the property value, your lender may require you to pay LMI or other costs.
- You can’t top up the loan. Increasing the loan amount after settlement isn’t permitted under the Scheme.
- Refinancing has conditions. You may be able to refinance to another Participating Lender and keep the benefit, but you can’t increase the loan amount or extend the term.
- Your lender choice is narrower. Only Participating Lenders offer it, and only on principal-and-interest owner-occupier loans.
- Upfront costs remain. Stamp duty, conveyancing, building and pest inspections, and lender fees still apply. NSW has its own first home buyer stamp duty exemptions and concessions, run by Revenue NSW. Check the current thresholds there.
First Home Guarantee or save a 20% deposit?
There’s no single right answer. Buying sooner with 5% means you avoid LMI and start paying off your own home earlier. Waiting until you have 20% means a smaller loan, lower repayments and less total interest, but it takes longer to save, and prices may move in the meantime. Moneysmart’s mortgage calculator lets you compare repayments and total interest on different loan amounts, and a broker can show you both paths using real lender criteria.
How Click Financial can help
We’re a licensed mortgage broker in Bankstown. We compare options across our panel of 30+ lenders, and we’re required by law to act in your best interests. For most home loans you won’t pay us a fee; we’re paid by the lender. Any fee is disclosed in writing first (see our Credit Guide).
Talk to a broker about whether the Scheme fits your plans.
Frequently asked questions
Is the First Home Guarantee still available in 2026?
Yes. As at 28 September 2026 it runs as the Australian Government 5% Deposit Scheme, administered by Housing Australia through Participating Lenders.
Is there an income cap?
No. Income caps and limits on places were removed from 1 October 2025.
Can I use it with a friend or sibling?
Yes. You can apply on your own or jointly with one other person, such as a partner, friend or family member. Both of you need to meet the eligibility criteria.
I owned a home years ago. Can I still use it?
Possibly. You’re eligible if you haven’t owned property or land in Australia in the last 10 years, as long as you meet the other criteria.
Can I use the Scheme to buy an investment property?
No. It’s for owner-occupiers only, and renting the home out later can end the guarantee.
Does the guarantee mean my loan will be approved?
No. You still have to meet the Participating Lender’s credit and lending criteria.
Can I refinance a loan that has the guarantee?
You may be able to refinance to another Participating Lender and keep the benefit, subject to conditions such as not increasing the loan amount or extending the term. Refinancing to a lender that isn’t a Participating Lender ends the guarantee.
Does the Scheme help with stamp duty?
No. Stamp duty is a state matter. In NSW, check Revenue NSW for first home buyer exemptions and concessions.
Sources
- Housing Australia, firsthomebuyers.gov.au: Australian Government 5% Deposit Scheme, First Home Buyers: eligibility, Property Price Caps, checked 28 Sep 2026
- Housing Australia, Australian Government 5% Deposit Scheme Information Guide (Sep 2025)
- ASIC Moneysmart, Switching home loans (LMI definition, updated 29 Jul 2026) and Mortgage calculator
- Revenue NSW, First Home Buyers Assistance Scheme, checked 29 Sep 2026
Written by the Click Financial team, licensed mortgage and finance brokers (A & M Group Pty Ltd, Australian Credit Licence 390820, MFAA member 320936). General information only, not credit advice. It doesn’t consider your objectives, financial situation or needs. Lending criteria, fees and charges apply. Read our Credit Guide.
