First Home Guarantee eligibility: who may qualify in Australia

First Home Guarantee eligibility comes down to a short list of tests: you generally need to be a first home buyer who will live in the home, and buy a home priced under a cap for your area. There is no income cap. If you meet the rules, the government guarantees part of your loan so you can buy with as little as a 5 percent deposit and avoid Lenders Mortgage Insurance. Whether you qualify, and whether the scheme suits you, depends on your circumstances and lender criteria.

This guide explains what the First Home Guarantee (FHBG) is, who may qualify, how the property price cap works, and the steps to apply. The First Home Guarantee is administered by Housing Australia, which sets the rules and lists participating lenders. Figures on deposits and insurance here come from the Australian Securities and Investments Commission (ASIC) Moneysmart. From 1 October 2025, Treasury and Housing Australia removed the scheme’s income caps and its previous cap on the number of places available each year, and increased the property price caps. The property price cap still applies, varies by location and changes over time, so always check the current rules on the Housing Australia website before you make an offer.

What the First Home Guarantee is

The First Home Guarantee is a government scheme that helps eligible first home buyers purchase a home sooner. The government guarantees part of your loan, which lowers the risk for the lender. That guarantee lets an eligible buyer purchase with a deposit as small as 5 percent, without paying Lenders Mortgage Insurance.

To see why that matters, it helps to know the usual rules. A great savings goal for a house deposit is 20 percent of the purchase price, plus enough to cover buying costs. A 20 percent deposit lets you avoid paying Lenders Mortgage Insurance. Lenders Mortgage Insurance, or LMI, is a one-off cost usually payable when the amount you borrow is more than 80 percent of the property’s value. LMI protects the lender if a borrower cannot repay the loan; it does not benefit the borrower.

The guarantee does not lend you money and it does not pay your deposit. It stands behind part of your loan so the lender does not require mortgage insurance, even though your deposit is under 20 percent. For a fuller explanation of how the insurance works, see What is lenders mortgage insurance.

Who may qualify

Eligibility for the First Home Guarantee is set by Housing Australia, not by Finance Lab. The common tests below are a guide to the kind of rules that apply. They are reviewed over time, so confirm the current detail before you rely on it.

• You are buying your first home and have not owned property in Australia before, within the rules the scheme sets.
• You will live in the home as an owner-occupier rather than renting it out as an investment.
• Your income does not limit your eligibility: Housing Australia removed the scheme’s income caps, for a single buyer or a couple, from 1 October 2025.
• The home you buy is priced under the property price cap for the area where you are buying.
• You apply through a participating lender, and you meet that lender’s own credit criteria.

The scheme also supports related pathways. There is support for people buying in a regional area and for single parents or guardians, each with its own settings. Meeting the FHBG rules does not remove the need to satisfy a lender, so a lender will still assess your income, expenses, and credit history in the normal way.

Income caps were removed in October 2025

The First Home Guarantee no longer tests your income. From 1 October 2025, Treasury and Housing Australia removed the income cap that used to apply to the scheme, alongside the previous cap on the number of places available each year. If you have read that the scheme has a separate income figure for a single buyer and a higher figure for a couple, that description is out of date: there is no income cap at all now, for a single applicant or for a couple buying together.

This does not change the other eligibility tests. You still need to be a first home buyer who will live in the home, and the property price cap below still applies.

How the property price cap works

The first home guarantee property price cap limits the value of the home you can buy under the scheme. The cap is not a single national number. It varies by state and territory, and within each state it is usually higher for capital cities and large regional centres than for the rest of the state. Property price caps were increased, not removed, in the 1 October 2025 changes.

The price cap matters because it shapes where and what you can buy. A home priced above the cap for your area is not eligible, even if you meet every other test. Housing Australia sets and reviews this figure, so check the current property price cap for your location on the Housing Australia website rather than relying on an older number.

If you are weighing up locations, it can help to look at what your borrowing supports as well as what the cap allows. To see what a lender might lend you, try the borrowing power calculator.

What it means for your deposit and LMI

The headline benefit of the scheme is the deposit. Without a guarantee, a deposit under 20 percent usually means LMI, because you are borrowing more than 80 percent of the property’s value. Under the First Home Guarantee, an eligible buyer can purchase with as little as a 5 percent deposit and avoid that insurance cost.

That avoided cost can be significant, but a smaller deposit is not a smaller purchase. You still buy the same home, so a 5 percent deposit means you borrow more and your repayments are larger than they would be with a 20 percent deposit on the same property. Whether the trade off works for you depends on your budget and lender criteria. If you want to estimate the insurance you might avoid, try the LMI calculator.

How to apply

You do not apply to Housing Australia directly. You apply for the First Home Guarantee through a participating lender, and the same application covers your home loan. The broad steps look like this:

The scheme’s cap on the number of places was removed on 1 October 2025, so there is no waiting list for a place under the guarantee. A broker who works with participating lenders can still help you line up a guarantee-backed application smoothly.

How the Finance Lab team can help

Working out First Home Guarantee eligibility, the price cap, and your borrowing capacity at the same time can feel like a lot. The team at Finance Lab can talk you through whether the scheme may suit your situation and help you prepare a clean application with a participating lender. Whether the guarantee is right for you depends on your circumstances and lender criteria, and we can help you confirm the current rules before you make an offer.

Frequently asked questions