First Home Guarantee Scheme


The "First Home Guarantee" - Unlock Your First Home with Just a 5% Deposit!

Secure Your Home Loan with Just a 5% Deposit Thanks to the Government’s First Home Guarantee (formerly known as FHLDS). Dive into the various enhancements of this program, its qualifying criteria, and the application process.

Empowering First-Time Buyers: The First Home Guarantee Unveiled

Once known as the First Home Deposit Scheme, the First Home Guarantee stands as a federal government initiative, offering a select group of first-time home buyers the chance to acquire a property with a mere 5% deposit, all while bypassing Lender's Mortgage Insurance (LMI). This scheme is an integral component of the federal government's comprehensive Home Guarantees lineup, which encompasses the Family Home Guarantee tailored for single parents, the Regional First Home Buyer Guarantee, and in the past, the New Home Guarantee.

What is the First Home Guarantee and how does it work?

The First Home Guarantee is a Government incentive that allows first home buyers to purchase their first home with a deposit as low as 5%, without the need to pay Lenders’ Mortgage Insurance (LMI). LMI is a one-insurance payment that protects the lender in the event that you default on your home loan repayments. It is usually applicable when borrowing over 80% of the value on the property, however, with the First Home Guarantee, the Government will underwrite your home loan and act as a guarantor to ensure you don’t have to pay LMI.

Eligibility for the First Home Guarantee

Income test

Individuals with an annual taxable income below $125,000 and couples with a combined income under $200,000 from the preceding fiscal year are eligible for this scheme. It's essential to bear in mind that when applying for a spot in this program, you'll be required to furnish the appropriate Notice of Assessment from the Australian Taxation Office (ATO) for the prior financial year.

Joint applications

Before July 1, 2023, only married couples or those in de-facto relationships were eligible to apply. However, as of July 1, 2023, the scheme's criteria have expanded to allow any two eligible individuals to apply jointly. This includes friends, siblings, or other family members who meet the eligibility requirements.

Prior Ownership

You will need to furnish evidence demonstrating that you haven't possessed or held a stake in any property within Australia over the previous ten years. This encompasses residential, commercial, investment, or company title properties.


Before July 1, 2023, applicants were required to be Australian Citizens aged 18 years or older. Starting from July 1, 2023, the program has expanded its eligibility to include Australian Permanent Residents who meet the criteria.

Owner Occupied

You must take up residence in the property within six months of becoming a homeowner and maintain your primary residence in that property for as long as your home loan benefits from a guarantee under the Scheme.

How do you apply?

1. Prepare

Talk to our Home Lending Specialists about how to prepare for when you’re provided a place (eligibility criteria apply).

2. Submit your application

Our Home Lending Specialists will help you with the documents required, lodge them on your behalf and keep you up to date on the progress of your application.

You’ll need to purchase your home within 90 days of approval on the Home Guarantee Scheme.

3. Move in

Move in and enjoy your new home.

Property Price caps FY 2022-23

State/Territory Capital city/regional centre Rest of state
Jervis Bay Territory & Norfolk Island
Christmas Island & Cocos (Keeling) Island
happy-couple-buying-their-new-home-receiving-keys-from-real-estate-agent copy

What are the benefits of the scheme?

The primary advantage of the First Home Guarantee for eligible first-time home buyers is the accelerated access it provides to the property market by eliminating significant hurdles. With the option to purchase a home with a reduced deposit, this scheme not only streamlines your path to homeownership but also cuts down the time required to save up a hefty 20% deposit. Furthermore, by securing a spot in the First Home Guarantee program, you stand to save a substantial sum, as you won't have to fork out for Lenders' Mortgage Insurance (LMI) at settlement. The icing on the cake is that LMI expenses, which are typically rolled into your loan amount, won't be adding to your interest costs, resulting in even more substantial savings while LMI is part of your loan balance.

Example of the First Home Guarantee works

Suppose you're eyeing an existing property in NSW with a price tag of $600,000, and you've managed to gather a 5% deposit, which totals $30,000. Typically, in such a scenario, you'd be on the hook for Lenders' Mortgage Insurance (LMI). However, if you clinch one of the coveted 35,000 spots offered by the First Home Guarantee, it's like having the Government ride shotgun and vouch for your loan amount in case of a default. Picture this: You could be pocketing substantial savings in the thousands thanks to the First Home Guarantee, sidestepping that LMI payment altogether. It's a game-changer, mate!

How to apply for the First Home Guarantee

To kickstart your journey with the First Home Guarantee, you'll want to submit your application directly through one of the participating lenders associated with the scheme or consider enlisting the services of a mortgage broker. Feel free to reach out to your local Mortgage Choice broker today. They can assist you in determining your eligibility and provide insights on the lenders actively participating in the program. Get in touch to start the process!

Who are the participating lenders for the First Home Guarantee

As of now, there are 27 lending institutions operating throughout Australia, extending opportunities within this scheme. Some of these lenders are even part of Mortgage Choice's lender panel. Don't hesitate to reach out to your broker to get the lowdown on the lenders engaged in the program and to discern if any of them align with your needs. They've got the inside scoop to guide you in the right direction.

Changes to the First Home Guarantee from the 2022 Budget

Starting from the 2022-23 Financial Year, the annual allocation of placements is set to rise to a total of 50,000 positions for a period of three years. Subsequently, the scheme will maintain a consistent annual offering of 35,000 placements. Within this expanded quota, 5,000 spots are earmarked for the Family Home Guarantee, while another 10,000 are designated for the Regional Home Guarantee.


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