The First Home Guarantee (FHBG) — formerly known as the First Home Loan Deposit Scheme — is an Australian Government initiative that enables eligible first home buyers to purchase a property with a deposit as low as 5% without paying Lenders Mortgage Insurance (LMI).
How it works. Under the FHBG, the Australian Government (through Housing Australia) guarantees up to 15% of the property’s value, allowing the buyer to borrow up to 95% LVR without triggering LMI. The government does not pay any amount to the buyer — it simply guarantees the lender’s additional risk.
Eligibility criteria:
– Australian citizen or permanent resident
– First home buyer (no previous ownership of residential property in Australia)
– Income thresholds: $125,000 for individuals; $200,000 for couples (from 1 July 2024)
– Property price cap (varies by city and region — check current caps)
– Purchasing for owner-occupier purposes (not investment)
Places available. The scheme has a limited number of places per financial year. Places are allocated through participating lenders (a panel of major and smaller banks) on a first-come, first-served basis.
What it does not cover. The scheme does not reduce the purchase price, apply to investment properties, or assist with stamp duty. First home buyers should still aim to accumulate savings beyond the 5% deposit to cover stamp duty, legal fees, and moving costs.
Related schemes. The Regional First Home Buyer Guarantee applies the same structure to purchases in regional areas, and the Family Home Guarantee applies to single parents.
