Home Guarantee Scheme
The federal scheme that lets eligible buyers skip LMI with a small deposit. Three streams, 50,000 places per year, and price caps that vary by region.
The three streams
First Home Guarantee (FHBG): 5% deposit, no LMI, for first-home buyers. 35,000 places per financial year. Family Home Guarantee (FHG): 2% deposit, no LMI, for single parents or single legal guardians of dependents. 5,000 places. Regional First Home Buyer Guarantee (RFHBG): same as FHBG but for regional areas, 10,000 places.
Eligibility rules (current FY25-26)
Income: $125K p.a. for singles, $200K combined for couples. First home buyers (FHBG / RFHBG) — must not have owned property in Australia previously. Must intend to live in the property as principal place of residence. Property must be under the regional/metro price cap (these vary widely — Sydney $900K, Melbourne $800K, regional NSW $750K, Hobart $600K, etc.).
How the scheme actually works
Housing Australia (the government body running the scheme) guarantees the portion of the loan above 80% LVR — meaning the lender treats it as an 80% loan for capital purposes and waives LMI. You still owe the full loan, including the guaranteed portion. If you default and the bank loses money, the government pays the bank, then chases you for the shortfall.
Spots fill fast — apply through one of the participating lenders (33 listed for FY25-26) as soon as you have a property under contract.
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