First Home Guarantee in Australia ? General Overview

What Is the First Home Guarantee in Australia?

At a high level, the First Home Guarantee is an Australian Government initiative designed to help eligible first home buyers purchase a home with a smaller deposit than is usually required. The guarantee generally covers part of the difference between your deposit and a typical 20% deposit, which can allow some borrowers to avoid paying lenders mortgage insurance (LMI) if all other criteria are met.

The scheme is administered by the National Housing Finance and Investment Corporation (NHFIC), now known as Housing Australia, and operates through a panel of participating lenders. The government does not provide the home loan itself; instead, it provides a guarantee to the participating lender for part of the loan.

Who Is the First Home Guarantee Generally Aimed At?

The First Home Guarantee is generally aimed at eligible first home buyers who:

• Meet specific citizenship or residency requirements
• Are within published income thresholds
• Are purchasing a home that falls under the scheme?s property price caps for their area
• Have the minimum required deposit but less than a 20% deposit
• Satisfy additional criteria set out by the scheme and the participating lender

Only the current official scheme documentation and a participating lender can confirm whether you personally meet the eligibility criteria. A mortgage broker or lender can help you interpret how the rules apply to your situation.

How the First Home Guarantee Works in Principle

In principle, the First Home Guarantee allows an eligible borrower to purchase a home with a deposit smaller than 20% (for example, a deposit starting from 5% as described in official materials), with the Australian Government guaranteeing part of the difference between that deposit and a 20% deposit. The guarantee is provided to the lender, not to the borrower, and it is not a cash payment to you.

This can reduce the lender?s risk and may allow an eligible borrower to avoid paying lenders mortgage insurance (LMI) if the lender approves the loan under its own credit policies. However, your ability to obtain a loan still depends on your income, expenses, credit history and the lender?s assessment ? the guarantee does not override standard lending criteria.

What Kinds of Properties Can Be Purchased?

Official guidance for the First Home Guarantee describes the types of property that may be eligible, which can include:

• Existing houses, townhouses or apartments
• House and land packages
• Land with a separate contract to build a home
• Off-the-plan apartments or townhouses

There are usually requirements that the property be used as your principal place of residence within a specified time and that it fall under certain price caps for your area. To confirm whether a particular property may be eligible, you should refer to current scheme documentation and speak with a participating lender or broker.

Where to Find Official First Home Guarantee Information

The most reliable source for the First Home Guarantee is the official Australian Government website for Housing Australia (formerly NHFIC) and related government pages. There you can typically find:

• Current eligibility criteria and scheme settings
• Property price caps by state, territory and region
• Income thresholds and deposit requirements
• Lists of participating lenders and information on how to apply
• Frequently asked questions and examples showing how the scheme works in practice

Because schemes can change, it is important to refer to the latest official information rather than relying on outdated articles or social media posts.

How the First Home Guarantee Fits into Your Broader Plan

Even if you are eligible for the First Home Guarantee, you still need to consider whether using the scheme is appropriate for your broader financial and personal goals. Some questions people often discuss with their advisers include:

• How different loan amounts and interest rates would affect their monthly budget
• How long they plan to live in the property as a principal place of residence
• The likely costs of home ownership, including council rates, strata fees, insurance and maintenance
• Potential tax implications if they later convert the property to an investment

Our Home Loan Basics and Loan Pre-Approval articles provide general background that can be used in discussions with your broker and financial adviser.

Using the First Home Guarantee When Buying in Sydney

Some eligible first home buyers under the First Home Guarantee choose to buy in Sydney or the surrounding regions. Sydney offers a range of suburbs, price points and property types, and scheme price caps can influence which suburbs are realistically accessible under the program.

To help with neutral suburb research (not recommendations), we have descriptive guides for various Sydney suburbs, including:

• Blacktown NSW 2148 (Western Sydney)
• Liverpool NSW 2170 (south-west Sydney)
• Schofields NSW 2762 (north-west Sydney growth area)
• Campbelltown NSW 2560 (Macarthur / south-west Sydney)

These pages aim to describe local characteristics only. They can help you gather questions for your buyers agent, broker, and adviser when you are discussing which parts of Sydney might be appropriate for your circumstances and any scheme you are considering.

How a Buyers Agent Can Support You if You?re Using the First Home Guarantee

A buyers agent does not approve First Home Guarantee applications or decide who is eligible. However, a buyers agent in Sydney can support you by:

• Working with your broker or lender to understand broad price ranges and property types that may align with the scheme's caps and your borrowing capacity
• Shortlisting and inspecting properties that match your agreed brief in suitable Sydney suburbs
• Liaising with selling agents and helping you manage timelines for finance, contract review and settlement
• Coordinating your property search so that legal, tax and financial considerations from your advisers are built into your decision-making process

Our property buyer checklist and Working with a Buyers Agent articles provide additional structure for organising your tasks and coordinating with your professional advisers.