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Are you eligible for the Home Guarantee Scheme?

Learn more about the Home Guarantee Scheme. Find out how you can apply for a home loan with a 5% deposit, and pay no Lender's Mortgage Insurance.

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Mark Bristow

Updated on

23 Nov, 2024

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What is the Home Guarantee Scheme?

The Home Guarantee Scheme (HGS) was previously known as the First Home Loan Deposit Scheme (FHLDS). This program is managed by the federal government’s Housing Australia, formerly known as the National Housing Finance and Investment Corporation (NHFIC).

This Australian government initiative is designed to support Australian first home buyers purchasing property with a deposit of just 5%, and without having to pay for Lenders Mortgage Insurance (LMI).

The HGS covers three key schemes offered by Housing Australia to assist struggling homebuyers purchase a property sooner:

First Home Guarantee (FHG) - Buy your first home sooner with a deposit of as little as 5%.
Regional First Home Buyer Guarantee (RFHBG) - Buy a home in a regional area with a deposit of as little as 5%
Family Home Guarantee (FHG) - Supports eligible single parents with at least one dependent child to purchase a home with a deposit of as little as 2%.

How can the Home Guarantee Scheme help you?

The Home Guarantee Scheme is designed to help Australian first home buyers get a foot on the property ladder, by minimising the up-front costs of their first home loan.

For many first home buyers, saving a 20% deposit for a home or a unit is difficult, particularly in capital cities such as Sydney and Melbourne where property prices are high. Saving a 10% or 5% deposit may be easier, but the smaller your deposit, the more you may need to pay in Lenders Mortgage Insurance (LMI).

LMI is charged to borrowers when the applicant has a deposit under 20%, or a loan-to-value ratio (LVR) of over 80%. With the help of the HGS, the government acts similarly to a guarantor, supporting a first home buyer’s application by guaranteeing up to 15% of the property value, so that borrowers may avoid this costly charge. Further, your chances of approval for a home loan may increase as lenders are more likely to lend to applicants that have enough savings or support to avoid LMI.

Note, the HGS is not a loan and you will still need to repay the entirety of your mortgage, regardless of how much of your home loan the HGS guarantees.

Who is eligible for the Home Guarantee Scheme?

Whether or not you may be eligible for the HGS depends on your location and status. Here are the key eligibility criteria for the scheme:

Applicants must be an Australian citizen over 18 years of age
Must be first home buyers or previous homeowners who haven't owned or had an interest in a real property in Australia (this includes owning land only) in the past ten years.
Taxable income must be under a maximum of $125,000 per annum (a combined $200,000 for couples) according to your ATO Notice of Assessment.
Must apply for a mortgage from one of a limited number of participating lenders in Australia.
Must intend to be the owner-occupier of the purchased property

For the FHG only, applicants must apply as an individual single parent or single legal guardian of at least one dependent, and must not currently own property, or upon settlement of the guaranteed property they’re buying, not intending to own a separate property.

For more information on the specific requirements for the different schemes covered under the HGS, you can visit the Housing Australia website.

What types of properties can you buy under the HGS?

According to Housing Australia, the HGS can be used to purchase a new home or an established property, with eligible residential properties including:

An existing house, townhouse or apartment;
A house and land package;
Land and a separate contract to build a home; and
An off-the-plan apartment or townhouse.

Property price caps may vary by postcode, with different purchase price caps for capital cities and regional centres. Applicants must also apply as an owner-occupier, as the scheme is not eligible for investors.

To be eligible for the HGS, whether you're purchasing a new home or an existing property, your purchase will need to fall under the property price threshold for its area.

First Home Guarantee and Family Home Guarantee Property Price Cap Table

The price caps for the FHBG and FHG are listed in the table below.

State	Capital City and Regional Centre*	Rest of State
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
Territory		All areas
ACT		$750,000
NT Regional		$600,000
Jervis Bay Territory & Norfolk Island		$550,000
Christmas Island and Cocos (Keeling) Islands		$400,000

* Regional centres are Newcastle and Lake Macquarie, Illawarra, Geelong, Gold Coast and Sunshine Coast.

Regional First Home Buyer Guarantee Property Price Cap Table

The price caps for the RFHBG are listed in the table below.

State#	Regional Centre*	All other Regional Areas
NSW	$900,000	$750,000
VIC	$800,000	$650,000
QLD	$700,000	$550,000
WA		$450,000
SA		$450,000
TAS		$450,000
Territory#		Regional area
ACT		Not applicable
NT Regional		$600,000
Jervis Bay Territory & Norfolk Island		$550,000
Christmas Island and Cocos (Keeling) Islands		$400,000

* Regional centres are Newcastle and Lake Macquarie, Illawarra, Geelong, Gold Coast and Sunshine Coast.

# The greater capital city areas of the States and the Northern Territory; and the entire Australian Capital Territory are excluded from the RFHBG

How do you apply for the Home Guarantee Scheme?

If you’re considering applying for the HGS, here are the steps you will take:

Check if you’re eligible: You can use the Housing Australia eligibility tool to find out if you fulfil the lending criteria to apply for a place in the scheme.
Check your finances: Not only must you save at least a 5% deposit for a property that fulfils the scheme’s eligibility requirements, your financial situation must meet the lender’s eligibility criteria. Can you and any other applicants comfortably service the mortgage on your income(s), including meeting the monthly repayments at the current interest rate or higher?
Compare participating lenders: There are currently 38 lenders participating in the HGS (list below). Compare mortgage options to work out which home loan may best suit your needs.
Contact your selected lender: Apply for your home loan through the HGS by contacting a participating lender directly. Unfortunately, RateCity and Housing Australia can’t accept applications directly.
Complete the lender’s application process: You’ll need to fulfil the lender's eligibility criteria when you enquire about a home loan, and provide the necessary documentation, including proof of income, proof of identity and proof of residence.

Do you have to be an Australian citizen to apply?

Currently, the Home Guarantee Scheme is only available to Australian citizens. The scheme is not open for permanent residents who are not Australian citizens, nor is it available to those on working visas, such as the 457 Visa.

If you are applying as a couple, both applicants must be Australian citizens at the time of applying for the scheme.

Who are the participating lenders for the Home Guarantee Scheme?

Here are the participating lenders of the Home Guarantee Scheme, as per the Housing Australia website:

Source: Housing Australia

How much do you need to save before applying for the HGS?

Before applying for the HGS, you will need to save a property deposit of at least 5% to qualify.

You will also need to factor in savings to cover the additional costs associated with buying a home or applying for a mortgage, including:

Stamp duty (if applicable)
Transfer fees
Legal and conveyance fees
Valuation fees
Home and contents insurance
Moving fees
Home loan application fees (if applicable)

Can the Home Guarantee Scheme be used with other grants?

Depending on your personal financial situation, you may be able to use the HGS in conjunction with other grants, concessions, and incentives, available from the federal and state/territory governments, as well as from individual mortgage lenders.

First Home Owner Grants (FHOGs)

These programs from the state and territory governments may allow eligible first home buyers to claim thousands of dollars to go towards their first home loan deposit.

Stamp duty concessions and exemptions

Some state and territory governments may discount or waive the cost of stamp duty for first home buyers, depending on the property they’re buying.

First Home Super Saver (FHSS) Scheme)

This scheme from the Australian Taxation Office (ATO) allows you to make extra contributions into your super fund, and withdraw up to $10,000 ($20,000 for couples) of these contributions to put towards your home deposit. By securely saving your money in your super fund, you make it almost impossible to spend this money on anything other than its intended purpose.

Cashback deals

Some mortgage lenders offer cashback rewards and incentives to encourage new borrowers to sign up with them. This money can prove useful for balancing your budget, especially in the first few months of a mortgage.

What alternatives are there to the Home Guarantee Scheme?

There are a range of government property buyer schemes available, specifically designed to help first home buyers get into the property market. These include grants, savings support, stamp duty concessions and exemptions and more.

You may also want to consider applying for a home loan with a traditional guarantor to bolster your application – typically a family member. By having a home loan guarantor to support your full mortgage, or just your deposit, you may be able to not only qualify for a home loan but borrow up to 110% of the property value, in some instances.

Alex Ritchie

Personal Finance Editor

Alex Ritchie was a Personal Finance Writer and Editor at RateCity, and has been writing about Australian finance for over six years. Her expertise and passion covers loans, credit, superannuation, and closing the gender pay gap, and she aims to help young Aussies to overcome their financial apathy. Alongside RateCity, Alex has been published in numerous publications, including Australia's Money Magazine, Business Insider, Lifehacker Australia, and in health via NPS MedicineWise.

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.

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What is the Home Guarantee Scheme?

The HGS covers three key schemes offered by Housing Australia to assist struggling homebuyers purchase a property sooner:

First Home Guarantee (FHG) - Buy your first home sooner with a deposit of as little as 5%.
Regional First Home Buyer Guarantee (RFHBG) - Buy a home in a regional area with a deposit of as little as 5%
Family Home Guarantee (FHG) - Supports eligible single parents with at least one dependent child to purchase a home with a deposit of as little as 2%.

How do you apply for the Home Guarantee Scheme?

If you’re considering applying for the HGS, here are the steps you will take:

Check if you’re eligible: You can use the Housing Australia eligibility tool to find out if you fulfil the lending criteria to apply for a place in the scheme.
Check your finances: Not only must you save at least a 5% deposit for a property that fulfils the scheme’s eligibility requirements, your financial situation must meet the lender’s eligibility criteria. Can you and any other applicants comfortably service the mortgage on your income(s), including meeting the monthly repayments at the current interest rate or higher?
Compare participating lenders: There are currently 38 lenders participating in the HGS (list below). Compare mortgage options to work out which home loan may best suit your needs.
Contact your selected lender: Apply for your home loan through the HGS by contacting a participating lender directly. Unfortunately, RateCity and Housing Australia can’t accept applications directly.
Complete the lender’s application process: You’ll need to fulfil the lender's eligibility criteria when you enquire about a home loan, and provide the necessary documentation, including proof of income, proof of identity and proof of residence.

What alternatives are there to the Home Guarantee Scheme?

Australian Military Bank	Health Professionals Bank
Australian Mutual Bank	Indigenous Business Australia
Auswide Bank	Illawarra Credit Union
Bank Australia	IMB Bank
Bank First	Mortgageport
Bank of Heritage Isle	MyStateBank
Bank of Us	NAB
bcu	Newcastle Permanent
Bendigo Bank	P&N Bank
Beyond Bank Australia	People's Choice
Border Bank	Police Bank
Commonwealth Bank	QBANK
Community First Bank	Queensland Country Bank
Credit Union SA	Regional Australia Bank
Defence Bank	Teachers Mutual Bank
Firefighters Mutual Bank	The Mutual Bank
G&C Mutual Bank	UniBank
Gateway Bank	Unity Bank
Great Southern Bank	WAW

Australian Military Bank	Health Professionals Bank
Australian Mutual Bank	Indigenous Business Australia
Auswide Bank	Illawarra Credit Union
Bank Australia	IMB Bank
Bank First	Mortgageport
Bank of Heritage Isle	MyStateBank
Bank of Us	NAB
bcu	Newcastle Permanent
Bendigo Bank	P&N Bank
Beyond Bank Australia	People's Choice
Border Bank	Police Bank
Commonwealth Bank	QBANK
Community First Bank	Queensland Country Bank
Credit Union SA	Regional Australia Bank
Defence Bank	Teachers Mutual Bank
Firefighters Mutual Bank	The Mutual Bank
G&C Mutual Bank	UniBank
Gateway Bank	Unity Bank
Great Southern Bank	WAW

Are you eligible for the Home Guarantee Scheme?

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On this page

What is the Home Guarantee Scheme?

How can the Home Guarantee Scheme help you?

Who is eligible for the Home Guarantee Scheme?

First Home Guarantee and Family Home Guarantee Property Price Cap Table

State

Capital City and Regional Centre*

Rest of State

Regional First Home Buyer Guarantee Property Price Cap Table

State#

Regional Centre*

All other Regional Areas

How do you apply for the Home Guarantee Scheme?

Do you have to be an Australian citizen to apply?

Who are the participating lenders for the Home Guarantee Scheme?

How much do you need to save before applying for the HGS?