First Home Guarantee – 5% Deposit for First Home Buyers
The First Home Guarantee (FHBG), formerly called the First Home Loan Deposit Scheme (FHLDS), is a government measure designed to help people enter the property market for the first time.

The First Home Guarantee (FHBG), formerly called the First Home Loan Deposit Scheme (FHLDS), is a government measure designed to help people enter the property market for the first time.
Can I buy a house with a 5% deposit?
It’s possible to purchase a home with a 5% deposit in Australia, however, the tradeoff for this is that you may be asked to pay lenders mortgage insurance (LMI), which can cost thousands of dollars. You can potentially avoid LMI by participating in one of the federal government’s Home Guarantee schemes, including the First Home Guarantee.
What is the First Home Guarantee scheme?
The First Home Guarantee (formerly the First Home Loan Deposit Scheme) is a government initiative that allows eligible first home buyers to purchase a property with a deposit as low as 5%, without paying costly LMI.
Previously, the scheme featured a number of strict caps and eligibility requirements, but from 1 October, a new expanded scheme will kick in, doing away with a number of these in order to give more buyers a chance to enter the market.
What’s changing under the expanded scheme?
From 1 October, you’ll still need to have at least a 5% deposit saved to put towards the purchase of your first home, however, the federal government will:
- Remove the annual limit of 35,000 places in the scheme
- Remove the $125k income cap for singles and $200k for joint applicants
- Increase property price caps
- Replace the Regional First Home Buyer Guarantee
What are the First Home Guarantee eligibility criteria?
To be eligible to participate in the scheme, prospective homebuyer(s) must meet all of the following criteria:
Age and citizenship status
Applicants must be at least 18 years of age and must be Australian citizens.
Income
From 1 October, no income caps will apply; previously, singles were required to have a taxable income of $125,000 or less and joint applicants of $200,000 or less.
Deposit
Applicants must have a deposit of at least 5% – but less than 20% – of the property’s value.
Individual or joint applications
Joint applicants for the scheme can be married, in a de-facto relationship, friends, siblings or other family members.
Owner-occupier status
Loans are only eligible for the scheme if they’re for the purchase of a ‘residential property’ for owner-occupiers. Applicants must intend to move into and live in the property as their principal place of residence, typically within six months after settlement. They must also continue to live in the property for as long as their loan “has a guarantee under the Scheme”.
Repayments
Loans under the Scheme normally require scheduled repayments of the principal (as well as the interest) of the loan for the full period of the home loan contract. However, if the loan relates to the purchase of vacant land to build a house on, it may be eligible even if the terms of the loan agreement permit interest-only repayments for a specified period.
Previous home ownership
Applicants must be home buyers who have not owned nor part owned a property in the past 10 years anywhere in Australia. Applicants must also not have owned or held interests in body corporate and company-owned properties in the last 10 years, regardless of whether it was an investment or owner-occupied property and whether it was ever lived in.
What are the First Home Guarantee property price caps?
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Location | Current property price cap | Price cap effective 1 October 2025 |
NSW – capital city and regional centre | $900,000 | $1,500,000 |
NSW – other | $750,000 | $800,000 |
VIC – capital city and regional centre | $800,000 | $950,000 |
VIC – other | $650,000 | $650,000 |
QLD – capital city and regional centre | $700,000 | $1,000,000 |
QLD – other | $550,000 | $700,000 |
WA – capital city | $600,000 | $850,000 |
WA – other | $450,000 | $600,000 |
SA – capital city | $600,000 | $900,000 |
SA – other | $450,000 | $500,000 |
TAS – capital city | $600,000 | $700,000 |
TAS – other | $450,000 | $550,000 |
ACT | $750,000 | $1,000,000 |
NT | $600,000 | $600,000 |
Jervis Bay Territory and Norfolk Island | $550,000 | $550,000 |
Christmas Island and Cocos (Keeling) Islands | $400,000 | $400,000 |
What lenders are part of the First Home Guarantee scheme?
Three of Australia’s big four banks – Commonwealth Bank, National Australia Bank and Westpac – participate in the First Home Guarantee scheme. The full list of lenders is extensive, but can be found on the Housing Australia website.
How do I apply for the First Home Guarantee?
- Step 1: Check your eligibility: Make sure you meet the criteria for the scheme, which you can do by using Housing Australia’s Eligibility Tool.
- Step 2: Contact a participating lender: The lender will then make an assessment of your eligibility and submit an application for the scheme.
- Step 3: Complete your application: Your lender will require documents like proof of ID and proof of savings and income, as well as a signed statutory declaration confirming that you are eligible to take part in the scheme.
- Step 4: Search for a home: You have 90 days after you receive conditional approval to find, negotiate for and sign a contract on a property.
- Step 5: Buy your home and move in: Once the house contract is settled and final approvals are made, you will be able to move in to your new home (unless the property is a new build, meaning different rules will apply).
- Step 6: Make sure you meet ongoing eligibility criteria: To retain the guarantee, you will need to keep living in your home as an owner occupier.
What are the rules around moving in?
Depending on the kind of property you’ve purchased, the rules around when you’ll need to move in are slightly different.
- Existing home: Move in within six months of settlement of your home loan.
- House and Land Package: Start building your home within 12 months and finish building your home within 24 months of the settlement date for your home loan, and you must move into the property within six months of an occupancy certificate being issued.
- Separate contracts for land purchase and home construction: Enter into an eligible building contract within six months, start building your home within 12 months, and finish building your home within 24 months of the settlement date for your home loan, and you must move in within six months of an occupancy certificate being issued.
- Off-the-plan purchase: You must have signed the contract of sale before the settlement date for your home loan, and you must move into the property within six months of the occupancy certificate being issued.
What happens if I can’t meet the contract conditions?
It is important to note that in most cases, scheme applicants must be living in their home six months after their loan settles (or a certificate of occupancy is issued). If this does not happen, the NHFIC states that the home loan would no longer be covered by the scheme. This could mean your lender may require you to pay fees and charges, and/or take out LMI.
What types of homes can I buy under the FHBG?
While the First Home Owner’s Grant scheme typically only applies to new or newly built homes, under the FHBG an eligible first home buyer could also purchase the following types of property, according to Housing Australia:
- An existing house, townhouse or apartment
- A house and land package
- Land together with a separate contract to build a home
- An off-the-plan apartment or townhouse
It’s worth noting there are price limits that apply to homes under the FHBG, which differ from region to region, and a list of eligibility requirements, too.
Can the FHBG be combined with other government incentives?
The FHBG can be combined with other first home buyer assistance available from the federal, state or territory governments. These could include the First Home Owners Grant (FHOG), a national scheme administered locally in most states and territories, which provides financial incentives for people to build or buy brand new homes, as well as the First Home Super Saver Scheme.
Stamp or transfer duty concessions could also apply to both new and existing homes.
Learn more about FHB assistance from each state
QLD . NSW . ACT . NT . SA . TAS . VIC . WA
This article was reviewed by our Finance Editor Jessica Pridmore before it was updated, as part of our fact-checking process.

Alasdair Duncan is Canstar's Deputy Finance Editor, specialising in home loans, property and lifestyle topics. He has written more than 500 articles for Canstar and his work is widely referenced by other publishers and media outlets, including Yahoo Finance, The New Daily, The Motley Fool and Sky News. He has featured as a guest author for property website homely.com.au.
In his more than 15 years working in the media, Alasdair has written for a broad range of publications. Before joining Canstar, he was a News Editor at Pedestrian.TV, part of Australia’s leading youth media group. His work has also appeared on ABC News, Junkee, Rolling Stone, Kotaku, the Sydney Star Observer and The Brag. He has a Bachelor of Laws (Honours) and a Bachelor of Arts with a major in Journalism from the University of Queensland.
When he is not writing about finance for Canstar, Alasdair can probably be found at the beach with his two dogs or listening to podcasts about pop music. You can follow Alasdair on LinkedIn.
- Can I buy a house with a 5% deposit?
- What is the First Home Guarantee scheme?
- What’s changing under the expanded scheme?
- What are the First Home Guarantee eligibility criteria?
- What are the First Home Guarantee property price caps?
- What lenders are part of the First Home Guarantee scheme?
- How do I apply for the First Home Guarantee?
- What are the rules around moving in?
- What happens if I can’t meet the contract conditions?
- What types of homes can I buy under the FHBG?
- Can the FHBG be combined with other government incentives?
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