The First Home Buyers Guarantee: What Buyers Need to Know

For many Australians, saving enough for a deposit feels like the biggest roadblock to finally owning a home. Up until now, lenders have usually wanted a hefty 20% deposit to approve a mortgage or they’ve added the extra cost of Lenders Mortgage Insurance (LMI) if you had less saved.

In its latest budget announcement, the Federal Government confirmed that the updated Home Guarantee Scheme will roll out from October, opening the door for more Australians to step into the market sooner.

So, what exactly is the First Home Buyers Guarantee (FHBG) and why is everyone talking about it? We’ve taken a closer look here’s the simple breakdown of how it works, who’s eligible, and what it means for your first home purchase.

Here’s the simple version:

• You save at least 5% of the property’s assessed value.
• Housing Australia provides your lender with a guarantee of up to 15%.
• Combined, this removes the 20% deposit requirement.
• You borrow up to 95% of the property’s value through a Participating Lender.

The guarantee doesn’t give you cash. Instead, it protects the lender if the property is sold and the loan isn’t fully repaid. You remain the legal owner of your home.

To qualify, buyers must meet certain eligibility criteria:

• Be an Australian citizen or permanent resident.
• Earn below the income caps ($125,000 for singles, $200,000 for joint applicants, based on your ATO Notice of Assessment).
• Have a deposit of at least 5% but less than 20%.
• Be a first-home buyer, or not have owned property in Australia in the last 10 years.
• Be 18 years or older.
• Buy a home to live in (investment properties don’t qualify).

Both individuals and joint applicants (partners, friends, or family members) can apply.

The Home Guarantee Scheme has several streams:

• First Home Buyers Guarantee (FHBG) – for first-home buyers, with a 5% deposit.
• Family Home Guarantee (FHG) – for eligible single parents or legal guardians, with just a 2% deposit.
• Regional First Home Buyer Guarantee (RFHBG) – for eligible buyers in regional Australia, with a 5% deposit.

All of these work the same way: Housing Australia provides a guarantee to your lender, helping you avoid LMI and buy sooner.

Some buyers worry that government involvement means co-ownership. That’s not the case here.

• Housing Australia does not appear on your title deed.
• You are the legal owner, registered on title.
• Your lender appears as mortgagee, just like any other home loan.
• Housing Australia’s guarantee sits behind the scenes with the lender.

This is very different from shared equity schemes (like Help to Buy), where the government may take a direct stake and be registered on title.

No. The FHBG has no impact on state-based stamp duty (transfer duty) concessions or exemptions.

• Stamp duty is assessed by your State/Territory Revenue Office on the property’s dutiable value.
• The FHBG is purely a guarantee — not a financial contribution — so it does not affect that calculation.
• If you’re eligible for first-home buyer concessions, you can usually claim them alongside the FHBG.

For example, in NSW, a first-home buyer purchasing under the relevant threshold may receive a full exemption from stamp duty. Using the FHBG won’t change that.

You can’t apply directly to Housing Australia. Applications are made through Participating Lenders.

The process is:

1. Check your eligibility online.
2. Contact a Participating Lender to reserve a place.
3. Submit documents (ATO Notice of Assessment, proof of residency, Home Buyer Declaration).
4. Find a property within 90 days.
5. Settle and move in you must occupy the property to keep the guarantee.

1. Lower deposit hurdle – buy with as little as 5% (or 2% for single parents) without paying LMI.
2. You own the home – Housing Australia does not appear on the title; you’re the sole legal owner.
3. Stamp duty unaffected – state-based exemptions and concessions still apply.
4. Not a cash grant – the guarantee supports your lender, not your deposit.
5. Places are limited – 35,000 spots are available in 2025/26, so timing matters

At BEH Group, we work with incredible brokers and lenders who can help you assess your eligibility, and we’re happy to make the introduction. Follow the links below to start the conversation

• Check your eligibility

https://www.housingaustralia.gov.au/home-guarantee-scheme#eligibility

• Search property price caps; https://www.housingaustralia.gov.au/home-guarantee-scheme#eligibility