A broker's plain-English guide
The First Home Guarantee, explained
The rules changed in late 2025, and it is the biggest help first home buyers have had in years. Here's how it works, who can use it, and what it could save you.
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If you have been saving and a 20% deposit still feels a long way off, the First Home Guarantee is worth a look. It lets eligible first home buyers buy with a 5% deposit and pay no lenders mortgage insurance, and since late 2025 far more people qualify than before.
It's a federal scheme run by Housing Australia and delivered through participating lenders. Here is how it works. Instead of you paying an insurer to cover the gap between your deposit and the usual 20%, the government guarantees that part. The lender accepts that, you buy sooner, and you keep the money LMI would have cost.
What changed in October 2025
This is the part a lot of people have missed. On 1 October 2025, two of the biggest hurdles were removed:
- No more income caps.The old limits, $125,000 for a single, $200,000 for a couple, are gone. Your income no longer rules you out of the scheme.
- No annual place limit.The scheme used to run out of spots each year. That cap has been scrapped, so eligible buyers no longer have to get in early for a place.
Higher property price caps came in at the same time, which matters a lot in Melbourne where prices had outgrown the old limits.
What it actually saves you
You need a deposit of at least 5% of the purchase price. The government guarantees up to 15% of the property's value, and that guarantee is what removes the need for LMI. On a typical Melbourne purchase, avoiding lenders mortgage insurance commonly saves somewhere between $15,000 and $35,000. That is money you keep instead of paying it to an insurer.
Property price caps (from 1 October 2025)
There's a cap on how much the home can cost, and it varies by location. The headline figures:
| Location | Price cap |
|---|---|
| Melbourne & Geelong | $950,000 |
| Sydney & NSW regional centres | $1,500,000 |
| Brisbane, Gold Coast & Sunshine Coast | $1,000,000 |
| Perth | $850,000 |
| Adelaide, Hobart, Canberra & other regions | Set by postcode, ask us |
Caps are set by Housing Australia and can change, and regional areas have their own figures. Before you make an offer, check the current cap for that exact suburb. We will do it with you in a couple of minutes.
Who can use it
- You're a first home buyer (or you haven't owned Australian property in the last ten years, under the scheme's rules).
- You're an Australian citizen or permanent resident, and at least 18.
- You'll live in the home. It has to be your main residence. You generally need to move in within six months of settlement. So it's for owner-occupiers, not investors.
- You have a genuine 5% deposit saved, and the home is within the price cap for its location.
- Couples apply as a couple. Joint applicants need to be married or in a de facto relationship.
There are a few finer points and the rules do get updated, so treat this as a plain-English overview rather than the final word. The quickest way to know where you stand is a five-minute chat.
Don't forget the Victorian stamp duty saving
The First Home Guarantee is a federal scheme, but Victoria has its own first home buyer break that can stack on top. If you're buying in Victoria, you pay no stamp duty on a first home under $600,000, with a sliding concession up to $750,000, a saving that can reach around $31,000. Used together, the deposit help, the LMI saving and the stamp duty exemption can bring your purchase forward by years.
The scheme is generous, but the lender still has to say yes
The First Home Guarantee removes the deposit and LMI hurdle. It doesn't change how a lender assesses your borrowing power, and not every lender offers it. That is what a broker does: match you to a participating lender whose policy suits your income, check the price cap for your suburb, and put the scheme, your borrowing power and the stamp duty concession together so nothing gets missed. It's free to you, and it's what we do every week.
Want to run your own numbers first? Our calculators give you a rough figure for repayments and borrowing power, and the first home buyer guide covers everything from the deposit to settlement.
Good questions
First Home Guarantee questions
No. From 1 October 2025 the income limits were removed, so there's no longer an individual or couple income cap. The old annual limit on the number of places was scrapped too, so every eligible first home buyer can access it.
At least 5% of the purchase price, made up of genuine savings. The government guarantees up to 15% of the property's value, and that's what removes the need for lenders mortgage insurance.
Yes. Because the government guarantees the part a lender would normally insure, eligible buyers can borrow up to 95% of the value without paying LMI, commonly a $15,000 to $35,000 saving.
$950,000 for Melbourne and Geelong. Other areas have their own caps set by Housing Australia, and caps can change, so it's worth confirming the current figure for your exact suburb, we'll check it for you.
Often, yes, they're separate schemes. In Victoria, eligible first home buyers pay no stamp duty under $600,000, with a concession up to $750,000, which can sit alongside the First Home Guarantee.
See if you qualify, in five minutes
Not sure if you're eligible? Take the first home buyer eligibility quiz, it's five questions and takes about a minute. Or book a free, no-obligation chat: we will check your eligibility, the price cap for your suburb, find a participating lender that suits you, and tell you what is achievable.