Last Updated: 23rd March, 2023

What Is the First Home Guarantee?

The First Home Guarantee (previously known as the First Home Loan Deposit Scheme) allows first-home buyers with deposits as low as 5% to qualify for a home loan without paying Lenders Mortgage Insurance (LMI) fees.

It is one of the three schemes under the Home Guarantee Scheme. The other two are the Family Home Guarantee and Regional First Home Buyer Guarantee.

How Does It Work?

Essentially, the government will act as the mortgage insurer; for example, if a borrower provides a deposit worth 5% of the property value, the government guarantees 15% of the property value, making the risk to the lender the same as if the borrower provided a 20% deposit.

The scheme is aimed at helping low- and middle-income Australians buy their first home sooner by reducing the amount they need for a deposit and eliminating LMI costs, saving borrowers tens of thousands of dollars.

Typically, to avoid paying thousands in LMI fees, a borrower needs a 20% deposit. However, under the scheme, even with a 5% deposit, you avoid LMI fees since the government will guarantee up to 15% of the value of the property.

Moreover, eligible first home buyers will be able to use the scheme together with other government programs such as the First Home Super Saver Scheme, state and territory First Home Owners Grant and stamp duty concessions. We’ve compiled a list of other government schemes and grants available for first home buyers here.

Under the First Home Guarantee, participating lenders and mortgage brokers will assess a first-home buyer’s eligibility alongside other standard home loan considerations such as serviceability (borrowing power), credit checks etc.

Borrowers must apply through a participating lender. The NHFIC will not be accepting direct applications.

As accredited mortgage brokers, we can help you reserve your place, subject to availability. Due to the limited number of slots on offer each year, you should ensure your application is “first-in-best-dressed” for the best possible outcome. Apply as soon as possible.

It is for these reasons that we recommend that first home buyers get their applications pre-assessed by our award-winning mortgage brokers.

To apply and reserve a place for the First Home Guarantee, give us a call on 1300 889 743 or fill in our short online assessment form.

helpful tips iconHelpful Tip:

Most lenders usually require at least an 8% deposit for first-home buyers to be able to purchase. With the First Home Guarantee, a 5% deposit is sufficient, which helps you get into the property market sooner.

(Note: Additional savings might be required for stamp duty as it may be applicable depending on the price of the property and the state where you are buying.)

You will also get competitive interest rates equivalent to 80% LVR home loans, rather than interest rates for 90% or 95% LVR home loans. This means your borrowing capacity will be much better under the First Home Guarantee.

60,000 Places From 1 July 2022

Beginning in financial year 2022-23, the government will provide a total of 60,000 places each year under the various schemes:

First Home Guarantee Eligibility Calculator 2022-2023

Disclaimer: This calculator can help you determine whether or not you could be eligible for the First Home Loan Deposit Scheme. However, it only acts as general guidance as to the various eligibility criteria but does not constitute a determination of eligibility.

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Am I Eligible For The First Home Guarantee?

There are several eligibility criteria first home buyers must meet to qualify for the First Home Guarantee:

  • A minimum deposit of at least 5% is needed (most lenders require the deposit to have been accumulated through genuine savings).
  • Only Australian citizens who are at least 18 years of age and hold a Medicare card are eligible. Permanent residents are not eligible.
  • Single first-home buyers earning up to $125,000 a year or couples earning up to $200,000 a year are eligible. Income from the financial year preceding the year in which the loan is entered into will be assessed.
  • Couples are eligible for the scheme only if they are married or in a de facto relationship. Other persons buying together, such as siblings, parent/child or friends, are not eligible.
  • Loans under this scheme require scheduled repayments of the principal of the loan for the full period of the agreement. Interest-only repayments for a specific period are accepted only for loans relating to both the purchase of vacant land and the construction of a house on the land.
  • Applicants must be first-home buyers who’ve not previously owned or had an interest in a residential property, either separately or jointly with someone else. This includes residential strata, company title properties, regardless of whether it was an investment or owner-occupied property and whether it was ever lived in.
  • Applicants must intend to move into and live in the property as their principal place of residence (they must be owner-occupiers).

Apart from the 5% deposit required, first-home buyers must also provide evidence of funds to cover stamp duty, legal fees, bank fees etc., where the Loan-to-Value ratio is above 95% of the property value.

What Types Of Properties Can I Buy Under The First Home Guarantee?

Eligible first-home buyers can buy the following types of properties:

Once you’ve been pre-approved for a home loan by one of the participating lenders, you’ll have 90 days to find and sign a contract of sale for an eligible property that you want to buy.

Finally, once you’ve signed a contract of sale, you’ll have an additional 30 days from the signing date to finalise the paperwork and checks for your home loan.

What Will I Need To Provide To Apply For The First Home Guarantee?

Initially, under the first home buyers scheme, you’ll need to submit the following information to your mortgage broker or to a participating lender.

  • Your full name and date of birth;
  • Your Medicare number (including your position on the card);
  • Your Notice of Assessment (NOA) for your taxable income. For reservations made from 1 July 2022 to 30 June 2023, the NOA is for the 2021-22 financial year.
  • Other standard home loan documents.

What Are The Price Caps For The First Home Guarantee?

The caps vary depending on the state or territory and whether you’re looking to buy in a city, large regional centre or other regional area.

Region FY 2022-23
NSW – Sydney & regional centres
(Newcastle, Lake Macquarie & Illawarra)
NSW – rest of state $750,000
VIC – Melbourne & regional centre
VIC – rest of state $650,000
QLD – Brisbane & regional centres
(Gold Coast & Sunshine Coast)
QLD – rest of state $550,000
WA – Perth $600,000
WA – rest of state $450,000
SA – Adelaide $600,000
SA – rest of state $450,000
TAS – Hobart $600,000
TAS – rest of state $450,000
ACT $750,000
Northern Territory $600,000
Jervis Bay Territory & NorfolkIsland $550,000
Christmas Island & Cocos (Keeling) Islands $400,000

Source: NHFIC

What Are Areas Considered Regional Centres?

The capital city price caps will apply to large regional centres with a population over 250,000, namely:

  • The Gold Coast;
  • Newcastle and Lake Macquarie;
  • The Sunshine Coast;
  • Illawarra (Wollongong);
  • and Geelong, recognising that dwellings in large regional centres tend to be significantly more expensive than other regional areas.

Who Are The First Home Guarantee Lenders?

There are 32 participating lenders who offer the First Home Guarantee. The lenders consist of major and non-major lenders. You can visit NHFIC’s website to get the full list of lenders.

How To Apply For The First Home Guarantee

You can directly apply with a participating lender or take the help of a mortgage broker to help you.

Note:The NHFIC will not be accepting direct applications.

As such, lenders or mortgage brokers will assess scheme eligibility alongside other standard home loan considerations such as serviceability, credit checks etc.

We’re now able to reserve a slot in the First Home Guarantee for our customers subject to availability for up to 14 calendar days (cannot be extended).

The application needs to be submitted within 14 days and assessed as conditionally eligible to progress to a certified guarantee.

Once the loan is pre-approved, you’ll have 90 days to return a signed and dated contract (an extension on the 90 days to find a property can be considered).

To apply and reserve a slot in the First Home Guarantee please give us a call on 1300 889 743 or fill in our free online assessment form today.

What if the first home buyers Scheme places are exhausted?

If first home buyers Scheme places have been exhausted, but you’re eligible, you can still submit a reservation request, and you’ll be added to the waitlist.

When and if a Scheme place becomes available, you will be advised.

Do I Only Need A 5% Deposit Under The Scheme?

Separate to the minimum required deposit of 5% under the Scheme, first home buyers must have funds to cover stamp duty, bank fees, legal fees and government transfer fees, where the loan to value ratio (LVR) is greater than 95%.

For example, a first home buyer in NSW will need a $25,000 (5%) deposit for a $500,000 purchase plus extra funds to complete the purchase.

Generally, for the example above, the extra funds required will be:

  • Stamp duty – $0 (stamp duty is waived for first home buyers up to a certain threshold depending on the state)
  • Titles Office – Mortgage: $143.50
  • Titles Office – Transfer of Land: $143.50
  • Loan fees (establishment fees, application fees or valuation fees) – $900 (These fees vary from $0 to $900)
  • Legal/conveyancing costs – $1,500
  • Lenders Mortgage Insurance (LMI) fees – $0 (waived under the first home buyer scheme).

So, your total funds to complete will be $25,000 plus $2,687 (approx.) as extra funds.

It would be best if you also accounted for sundry costs for inspections/reports such as building inspection costs, pest inspection etc.

Does My Deposit Have To Be Genuine Savings?

Both the major lenders require your deposit to be genuine savings, i.e. deposit that you’ve saved yourself over time.

So, yes, the deposit needs to be genuine savings to qualify for the First Home Guarantee in most cases.

However, there are some exceptions to this with some lenders, i.e. using paid rent or rental history as proof of genuine savings.

Moreover, since February 2020, 25 smaller participating lenders with flexible genuine savings policies have started accepting applications. Applying with the right lender is key to approval.

How Much Do I Save In LMI With The First Home Guarantee?

Your actual savings in LMI will be based on your deposit, the loan to value ratio (LVR) and your home loan amount.

Think of it this way; the lower your deposit is, the higher the risk is to the bank leading to higher LMI premiums.

State/Territory Loan Amount Deposit Saved (%) LVR LMI
NSW (Capital City and Regional Centre) $900,000 5% 95% $37,206
NSW (Rest Of State) $750,000 5% 95% $31,005
NSW (Capital City and Regional Centre) $900,000 10% 90% $20,152
NSW (Rest Of State) $750,000 10% 90% $16,794

As you can see from the example above, the LMI fees go down if you put in a larger deposit.

You can use our LMI calculator to work out exactly how much you’re saving.

What Are The Pros And Cons Of The First Home Guarantee?

Benefits Of The First Home Guarantee

  • The government guarantee saves first home buyers with low deposits tens of thousands in LMI.
  • First home buyers can buy their first home sooner and enter the property market due to the required deposit of only 5%.
  • Your mortgage repayments will go towards paying off your home loan instead of on rent.
  • Along with other first home benefits such as the first home owners grant (FHOG) and the stamp duty exemption/concessions, the deposit scheme may incentivise first home buyers at the fringes to finally buy their own home.

Disadvantages Of The First Home Guarantee

  • Buyers with low deposits will pay extra in interest over the life of the loan term than buyers with a 20% house deposit.
  • There is a risk of borrowers ending up in negative equity, which is where the outstanding balance on a mortgage is greater than the property value. Borrowers in the scheme are encouraged to borrow at a high LVR, since the government guarantee allows them to avoid the cost of LMI.
  • Some economists have also argued that this new incentive will further drive up demand for real estate, which will lock out first-home buyers who don’t qualify for the scheme.

First Home Guarantee FAQs

We’ve listed some of the frequently asked questions (FAQs) here. However, if there’s something you’d like answered that is not listed on the page, please put your question in the comment section at the bottom of the page.

Interest Rate


Property Ownership

Application Process

First-Home Buyer Success Story


A married couple was looking to purchase their first home under the federal government’s First Home Guarantee, now called the First Home Guarante


We got the couple pre-approved for a $700,000 purchase.


However, they found a place that they loved, but the price was $710,000 (over the price threshold of the Scheme), so they were happy to go over the limit and pay LMI.

They signed a contract at $710,000, and we ordered the valuation for formal approval.

The valuation came back low at $690,000. Since the couple had enough funds to contribute towards the shortfall, they asked us to just proceed as they were willing to cover the difference.


Our mortgage broker spoke to the selling agent and sent him a copy of the report and asked to speak to the vendor.

Our broker argued that since the couple would have to contribute the last of their savings and would really struggle if they proceeded and requested that the price be brought down to $700,000 (within the limit of the FHLDS).

Soon after, we received a call from the real estate agent saying that the vendors have agreed to $700,000.

The couple were absolutely thrilled as they are now saving $25,000 approximately on LMI fees because they were back within the limit of the FHLDS, as well as saving $10,000 on the purchase price.

What Other Options Are Available?