First Home Guarantee · Free Guide · Clear Path Home Loan

5% Deposit. No LMI.

The Australian Government's First Home Guarantee lets eligible first home buyers purchase a property with as little as 5% deposit — with no Lenders Mortgage Insurance. Here's everything you need to know.

Last reviewed: April 2026
5%
Minimum deposit required under the scheme
35,000
Places available per financial year
$0
LMI payable — the government guarantees the gap
01
Who is eligible?
Australian citizens or permanent residents who have not previously owned property in Australia. Income caps apply: singles earning under $125,000 and couples earning under $200,000 combined (based on the previous financial year's taxable income).
02
Property price caps by location
Price caps apply by location. In Sydney and NSW major cities the cap is $900,000. In regional NSW it is $750,000. Caps vary by state and region — a specialist can confirm the exact cap for your target area.
03
Genuine savings required
Your 5% deposit must come from genuine savings — typically 3 months of regular deposits. Lump sum gifts alone do not generally qualify, though a gift on top of genuine savings may be acceptable to some lenders.
04
Only available through participating lenders
The scheme is only available through approved lenders. Not all banks participate. A specialist who works with scheme-approved lenders ensures your application is structured correctly.
05
Places are limited — timing matters
Only 35,000 places are available per financial year on a first-come, first-served basis. Places typically open on 1 July each year. Getting pre-approved before the new financial year maximises your chances of securing a place.

Common mistakes to avoid

⚠️
Assuming you do not qualify
Income caps are higher than most people expect — $125,000 for singles and $200,000 for couples. Many buyers miss out simply by not checking their eligibility.
⚠️
Not accounting for stamp duty
The guarantee covers your deposit shortfall — it does not cover stamp duty. You still need funds for stamp duty and other purchase costs on top of your 5% deposit. First home buyers in NSW are exempt from stamp duty on properties up to $800,000.
⚠️
Waiting too long to apply
Places fill up. Getting pre-approved early means you are ready to act when the right property comes up without missing your place in the scheme.
⚠️
Applying through a non-participating lender
If your lender is not approved under the scheme, you cannot access the guarantee even if you meet all other eligibility criteria. Always confirm your lender is scheme-approved before proceeding.

💡 Can I use the First Home Guarantee with the First Home Owner Grant?

Yes — these are separate schemes that can be used together. The First Home Guarantee removes the need for LMI on your loan. The First Home Owner Grant provides a cash grant (up to $10,000 in NSW for new homes). Combined, they can significantly reduce your upfront costs.

Frequently asked questions

No — both applicants must be first home buyers. If either partner has previously owned residential property in Australia, you are not eligible for the scheme as a couple.

The government guarantee remains in place until your LVR drops below 80% through repayments or property value growth — at which point the guarantee is released automatically. Selling before then means the guarantee ends when the loan is repaid from the sale proceeds.

The Family Home Guarantee is specifically for single parents with at least one dependent child. It allows purchase with just 2% deposit and no LMI. The First Home Guarantee is for first home buyers generally and requires a 5% deposit.

No — they are different schemes. The First Home Guarantee is about your deposit and LMI. The First Home Super Saver Scheme allows you to save your deposit inside superannuation and withdraw it for a home purchase. Both can be used together.

You apply through a participating lender — not directly through the government. Your specialist will identify the right participating lender for your situation and handle the application process.

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