First Home Guarantee (FHBG) Explained — Eligibility and How to Apply (2026)
The First Home Guarantee (FHBG), formerly the First Home Loan Deposit Scheme (FHLDS), allows eligible first home buyers to purchase a property with a minimum 5% deposit — without paying Lenders Mortgage Insurance (LMI). The Australian Government guarantees the lender for the shortfall between the 5% deposit and the standard 20% LVR threshold.
For a $650,000 home, this can save a first home buyer approximately $20,000–$30,000 in LMI premiums.
Key Facts (2026)
| Feature | Detail |
|---|---|
| Minimum deposit | 5% of purchase price |
| LMI payable | No (government guarantees the lender) |
| Income cap — single | $125,000 gross taxable income |
| Income cap — joint | $200,000 combined gross taxable income |
| Annual places available | 35,000 |
| Eligible buyers | First home buyers only |
| Property types | New homes, existing homes, off-the-plan, house and land |
| Administered by | Housing Australia |
Property Price Caps by State (2026)
The scheme has maximum property price caps that vary by state and territory:
| State / Territory | Capital City / Regional Centre | Regional Areas |
|---|---|---|
| NSW | $900,000 | $750,000 |
| VIC | $800,000 | $650,000 |
| QLD | $700,000 | $550,000 |
| WA | $600,000 | $450,000 |
| SA | $600,000 | $450,000 |
| TAS | $600,000 | $450,000 |
| ACT | $750,000 | — |
| NT | $600,000 | — |
Caps are reviewed periodically. Always confirm current caps at housingaustralia.gov.au.
Full Eligibility Criteria
To be eligible for the First Home Guarantee, you must:
1. Be a first home buyer You (and any co-purchaser) must not have previously owned or had an interest in residential real property in Australia. This includes ownership through a company, trust or SMSF.
Exception: You may have previously owned a commercial property or vacant land without disqualifying yourself, depending on the circumstances.
2. Meet the income test Your gross taxable income in the most recent financial year must not exceed:
- $125,000 (individual applicants)
- $200,000 (joint applicants — combined income of both borrowers)
Income is assessed using your most recent Notice of Assessment from the ATO.
3. Be an Australian citizen or permanent resident New Zealand citizens with a Special Category visa (subclass 444) are also eligible.
4. Be 18 years or older
5. Intend to occupy the property The property must become your principal place of residence within a reasonable time after purchase. Investment purchases are not eligible.
6. Borrow within the scheme’s LVR limits You must borrow at least 80% of the property value (minimum 80% LVR, maximum 95% LVR). Borrowing less than 80% means you do not need a guarantee.
How the Guarantee Works — Step by Step
- Check eligibility — income, first home buyer status, property price
- Find an approved lender — the scheme operates through Housing Australia’s panel lenders only
- Apply for the guarantee — done through the lender as part of your loan application; Housing Australia reserves a guarantee place on your behalf
- Purchase property within 90 days — if the guarantee place is reserved but not used, it lapses
- Settlement proceeds normally — lender treats the loan as if you had a 20% deposit (no LMI)
Participating Lenders
The First Home Guarantee is only available through Housing Australia’s approved lender panel, which includes:
- Major banks (Commonwealth Bank, NAB, ANZ, Westpac)
- Regional banks (Bank of Queensland, Bendigo Bank, etc.)
- Non-bank lenders and credit unions
Not all lenders participate, and interest rates and loan features vary within the panel. It is worth comparing multiple panel lenders — or using a mortgage broker who specialises in scheme applications — as rates can differ by 0.25–0.75% between lenders on the same scheme.
Is the First Home Guarantee Worth It?
Savings from avoiding LMI:
| Purchase Price | LMI at 95% LVR (no scheme) | Saving with FHBG |
|---|---|---|
| $500,000 | ~$16,000–$22,000 | ~$16,000–$22,000 |
| $650,000 | ~$21,000–$30,000 | ~$21,000–$30,000 |
| $800,000 | ~$26,000–$37,000 | ~$26,000–$37,000 |
Potential trade-off — higher LVR: Buying with 5% instead of 20% means a higher outstanding loan balance throughout the loan. At 6.00% on a $650,000 loan vs $520,000 loan (20% deposit equivalent), the additional loan of $130,000 costs approximately $780/month in repayments — though this is offset by the years of additional rent that would otherwise be paid while saving a 20% deposit.
For most eligible buyers in high-cost cities, the First Home Guarantee allows them to purchase years earlier than they could with a 20% deposit target — and the earlier market entry (in long-run growing markets) may more than offset the higher loan balance.
Frequently Asked Questions
How do I apply for the First Home Guarantee? You apply through a participating lender as part of your home loan application. The lender contacts Housing Australia to reserve a guarantee place on your behalf. You do not apply to Housing Australia directly.
Can singles use the First Home Guarantee? Yes. The FHBG is available to both individual applicants (singles) and joint applicants (couples). The income cap is $125,000 for singles and $200,000 combined for joint applicants.
Can I use the First Home Guarantee with the FHSS scheme? Yes. You can use voluntary superannuation contributions withdrawn under the FHSS scheme as part of your 5% deposit under the First Home Guarantee.
What happens if I can’t find a property within 90 days? The guarantee reservation typically lapses after 90 days. Contact your lender before the deadline — in some cases, extensions can be granted. New guarantee places open at the start of each financial year.
Does the First Home Guarantee affect my stamp duty? No. Stamp duty is assessed separately based on the property price and state. State-based first home buyer stamp duty exemptions apply independently of the federal First Home Guarantee.
Related Guides
- Home Guarantee Scheme — All Three Guarantees
- Regional First Home Buyer Guarantee
- How Much Deposit Do I Need?
- First Home Buyer 5% Deposit Options
- First Home Buyer Hub
This article provides general information only. Eligibility criteria, income caps and property price caps are set by the Australian Government and may change. Always verify current details at housingaustralia.gov.au. For advice tailored to your situation, speak with a licensed mortgage broker or financial adviser. Find one through MoneySmart.