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First Home Guarantee explained


We take a closer look at what it is and how it works.

The First Home Guarantee (FHBG) is part of the Home Guarantee Scheme (HGS), an Australian Government initiative to support eligible first home buyers purchase a home sooner. 

It is administered by the National Housing Finance and Investment Corporation (NHFIC) on behalf of the Australian Government.

We take a closer look at the First Home Guarantee and some of the requirements for first home buyers.

How does it work for first home buyers?

When you’re buying a home, most lenders want to see that you have a 20% deposit saved. If you don’t, you need to pay Lenders Mortgage Insurance (LMI), which protects the lender in case you default on the loan.

However, if you’re eligible for the First Home Guarantee, you only need to save a minimum 5% deposit. This is because NHFIC guarantees to a participating lender up to 15 percent of the value of the property purchased that is financed by an eligible first home buyer’s home loan, helping you avoid paying LMI.

The guarantee is not a cash payment or a deposit for your home loan.

Am I eligible for the Guarantee?

There are criteria on who can apply for the Guarantee. All borrowers must have at least 5% of the value of an eligible property saved, and be a first home buyer who hasn’t previously owned property in Australia. Borrowers must also:

  • Be an Australian citizen who’s at least 18; and
  • Be single with a taxable income of up to $125,000 per annum for the previous financial year, as shown on the Notice of Assessment (issued by the Australian Taxation Office); or
  • Be part of a couple (married or de-facto) with a combined taxable income of up to $200,000 per annum for the previous financial year, as shown on the Notice of Assessment (issued by the Australian Taxation Office).

Another condition: you must intend to owner-occupy the property you’re looking to buy – investment properties are not supported by the Guarantee.

If you’ve saved over 20% for your deposit, the home loan won’t be covered by the Guarantee.

How do I apply for the Guarantee?

If you’re eligible (see our checklist above) you’ll need to apply for the Guarantee via a participating lender. Your lender will work with you throughout your loan application to apply for a place under the relevant Guarantee.

While you don’t need to pay any costs to secure a Guarantee, you will be responsible for meeting all costs, fees and repayments in relation to the home loan being guaranteed as well as any costs relating to the property purchase.

What type of property can I buy?

You’re only able to purchase what’s considered ‘residential property’ under this Guarantee. These include:

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

Specific dates and requirements apply for the different property types deemed eligible under the Guarantee. So, if you’re not sure, check with the participating lender you’re hoping to secure a home loan with.

What else do you need to know?

The Guarantee supports eligible first home buyers to purchase or build a home, but it’s worth checking the property price thresholds.

The cost of the property you buy or build can’t exceed the relevant price cap for the area in which it’s located – check this fact sheet for the specifics around the capital city and regional centres in your state or territory.

Another initiative offered under the HGS is the Family Home Guarantee, designed to help eligible single parents with at least one dependent child buy or build their home sooner, with as little as a 2% deposit. If you’re eligible, talk to your lender about securing a place under this Guarantee.

This article is intended to provide general information of an educational nature only. Information in this article is current as at the date of publication. We do not recommend any third party products or services and we are not liable in relation to them. Any links to third party websites are for your information only and we do not endorse their content.

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