First Home Guarantee Scheme - 5% Deposit, No LMI Costs
The expansion of the Home Guarantee Scheme has been brought forward to 1st October 2025.
The update allows eligible buyers to purchase homes with only a 2-5% deposit without having to pay LMI costs, whilst removing the income caps, increasing price caps and making it available to an unlimited number of buyers.
The scheme will cover first-home purchases up to:
$1.5m Sydney
$950k Melbourne
$1m Brisbane & Canberra
$900k Adelaide
$850k Perth
$700k Hobart
Key benefits of the First Home Guarantee
Buy with a smaller deposit – Purchase a home with as little as a 5% deposit, helping you get into the market sooner.
No Lenders Mortgage Insurance (LMI) – Normally, lenders require LMI if your deposit is less than 20%. Under the scheme, the government acts as the guarantor for the remaining deposit, saving you potentially thousands of dollars.
Support for individuals and couples – Available to both single applicants and joint applicants (such as couples), subject to income and eligibility criteria.
Available nationwide – Price caps apply depending on the property’s location, ensuring the scheme is accessible across metropolitan and regional areas.
Helps first home buyers compete in the market – By reducing the deposit hurdle, the scheme gives first-time buyers an opportunity to secure a home sooner.
Property Price Caps (pre-October)
Maximum property price caps apply and vary depending on the location of the property. Both the purchase price and property value must fall within the relevant price cap. For new builds where land is purchased separately and a construction contract is entered into, the combined cost of the land and build must not exceed the cap. The property value is determined by the lender’s assessment which, may differ from the purchase price.
What type of home can you buy?
Existing house, townhouse or apartment
House and land package
Vacant land with separate contract to build a home
Off-the-plan apartment or townhouse
Are you Eligible?
To be eligible, applicants must meet specific requirements based on their personal circumstances, including:
Citizenship or Residency – Applicants must be Australian citizens or permanent residents.
Income – Taxable income must not exceed $125,000 for individuals or $200,000 combined for joint applicants, as verified by the ATO Notice of Assessment from the previous financial year.
Deposit – A minimum deposit of at least 5% of the property value is required.
Previous Property Ownership – You must be a genuine first home buyer or have not owned property in Australia within the past 10 years (this applies to both applicants in the case of a joint application).
Owner-Occupier Requirement – The property must be intended as your primary place of residence. Investment properties are not eligible.
Age Requirement – Applicants must be at least 18 years of age.
Book a Call or Online Meeting
Get in contact with us today
Alan Harrosh 0422 264 558
Mark Harrosh 0407 877 115
Campbell Morrow 0431 260 055
1300 671 801 (Chadstone Office)
admin@roshpartners.com.au
Arrange a review / same-day call back
Frequently Asked Questions
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Places under the First Home Guarantee are limited each financial year and allocated to participating lenders. Once the spots are filled, applicants may need to wait until the next release.
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Getting your finance pre-approved before you make any decisions is always a very good idea. While not strictly required, getting a home loan pre-approval can be highly beneficial, especially in a competitive housing market. Here’s why:
1. Know Your Budget
A pre-approval provides you with a clear understanding of how much you can borrow based on your financial situation. This helps you focus your property search within your price range, saving time and preventing disappointment.
2. Strengthen Your Position as a Buyer
Pre-approval shows sellers and real estate agents that you're a serious buyer with financing already conditionally secured. This can make your offer more attractive and give you an edge over buyers who haven’t been pre-approved.
3. Avoid Surprises
During the pre-approval process, your lender will assess your financials (income, savings, credit history) to give you an accurate borrowing estimate. This way, you can address any issues or discrepancies early on, reducing the chance of surprises later.
4. Faster Loan Approval
Having pre-approval can speed up the loan approval process once you’ve found the right property. Since much of the groundwork is already done, the final approval can be quicker and smoother, which is especially helpful when dealing with tight settlement timelines.
5. No Obligation
A pre-approval is typically valid for 3-6 months, and while it gives you a better idea of your borrowing power, you're not locked into a particular lender or loan until you proceed with a formal application. This gives you flexibility if your circumstances change.
When Might You Not Need Pre-Approval?
In certain situations, such as if you're making an unconditional cash offer or if you’re a returning buyer with extensive equity, pre-approval may not be essential. However, even in these cases, knowing your borrowing capacity is still helpful.
Final Thoughts: While it’s not mandatory, getting pre-approval can provide peace of mind, clarity, and a competitive edge when buying a home. It’s a smart step in the home-buying process, especially if you’re serious about securing your next property. A mortgage broker can guide you through the pre-approval process and help you find the best loan options based on your needs.
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Eligible properties include established homes, townhouses, apartments, and house-and-land packages (subject to price caps by location). For new builds, both the land and construction costs must fall under the relevant price cap.
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Property price caps vary depending on the state and whether the property is located in a capital city, regional centre, or other area. For example, the cap in Melbourne is $800,000, while in regional Victoria it is $800,000, and in other areas of Victoria $650,000.