One third of first home buyers get government support: How to apply for the Home Guarantee Scheme

According to the report, joint borrower participation and the age and income profile of guarantee recipients increased over 2023-24, likely reflecting the higher costs in servicing a mortgage. For reference, overall first home buyer participation fell by 33% between 2020–21 and 2023-24.

The typical profile of HGS users in the different schemes are as follows:

If you’re confident that the you could benefit from the HGS, you can look at taking the following steps:

1.  Check the eligibility criteria

There are different Home Guarantee options to suit different Australians:

• First Home Guarantee: For Australians planning to buy their first home.
• Regional First Home Buyer Guarantee: For Australians planning to buy their first home in a regional area.
• Family Home Guarantee: For single parents planning to purchase a home.

Each of these schemes has similar eligibility criteria, with a few important differences. You’ll generally need to earn an income below a maximum threshold, and will only be able to purchase property valued up to a maximum price cap. 

You’ll need to be a first home buyer or a previous homeowner who hasn’t owned a property in Australia in the past 10 years for both the First Home Guarantee and the Regional First Home Buyer Guarantee. For the Family Home Guarantee you need to be a single parent or single legal guardian who does not currently own a property or does not intend to own a separate property when they settle on the home. 

The full terms and conditions for each guarantee can be found on the HGS website.

2.  Get your documents together

Much like applying for a standard home loan, you’ll need to provide proof of your identity and residency, as well as details of your finances.

3.  Prepare your deposit

Both the FHG and the RFHG require a deposit of 5%, while the Family Home Guarantee you may only need just 2%. Housing Australia will then guarantee the remaining 15% or 18% of the value of the home loan so you don’t need to pay for Lenders Mortgage Insurance (LMI). 

4.  Contact a participating lender

A limited number of banks and mortgage lenders participate in the HGS, so you may not always be able to get a loan with your preferred bank. Compare the available options to find the lender offering the best choice for your needs, then contact that lender to make an application.

5.  Buy a property

Once you’ve been approved, you can confidently bid at an auction or negotiate a private sale.

The Home Guarantee Scheme may not be the best option for every borrower – it’s important to remember that a smaller deposit means a bigger loan, which could cost more to repay and put you at risk of stress if your financial situation changes in the future.

Consider contacting a mortgage broker for more personal advice on whether this may be right for you. Also, a solicitor or conveyancer can help you take care of the legal process putting a purchased property’s title into your name.