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First Home Buyer Guidance
Step by step help with grants, finance and floor plans, move into your first home sooner.
• First Home Guarantee: Buy with a 5% deposit without paying LMI. There is no limit on the number of places available and no income cap, following the expansion in October 2025.
• Help to Buy (introduced in December 2025): The government can contribute up to 40% of the purchase price of a new home, allowing eligible buyers to enter the market with a deposit as low as 2%. Income limits are $103,000 for individuals and $165,000 for joint applicants.
• Property price caps increased substantially in October 2025, with the limits now set at $1,500,000 in Sydney, $1,000,000 in Brisbane and $950,000 in Melbourne.
• Help to Buy cannot be used together with the First Home Guarantee. While Help to Buy can lower the amount you need to borrow, the government receives an equity share in the property.
The Australian Government offers several schemes aimed at helping Australians purchase their first home with a lower deposit. As of 2026, there are three key pathways: the First Home Guarantee, which allows a 5% deposit without LMI; the Family Home Guarantee, which requires a 2% deposit for eligible single parents; and the latest option, Help to Buy, a shared equity scheme introduced in December 2025 where the government can contribute up to 40% of the property’s purchase price.
A significant expansion that took effect on 1 October 2025 removed the annual place limits and income caps for the First Home Guarantee, opening the scheme to all eligible first home buyers regardless of their income. Help to Buy was introduced soon after in December 2025, offering 10,000 places each year and allowing eligible buyers to purchase with a deposit of just 2%.
| Scheme | Who it is for | Minimum deposit | Income cap | Places available |
|---|---|---|---|---|
| First Home Guarantee | Eligible first home buyers | 5% | No income cap from October 2025 | Unlimited |
| Family Home Guarantee | Single parents or guardians with a dependent | 2% | No income cap from October 2025 | Unlimited |
| Help to Buy, introduced December 2025 | Eligible buyers who may not be able to afford a full deposit | 2% | $103K for singles / $165K for joint applicants | 10,000 per year |
Help to Buy is a shared equity program introduced in December 2025 through Housing Australia. Unlike the First Home Guarantee, which primarily removes the need to pay LMI, Help to Buy lowers the amount you need to borrow by giving the Australian Government an equity share in your property.
How it works: The government can contribute up to 40% of the purchase price for a new home, or up to 30% for an existing home. You contribute a minimum 2% deposit and obtain a mortgage to cover the remaining amount. You own and live in the property as usual, while the government retains an equity share that can be repaid when you sell the property or gradually bought out over time.
• Minimum deposit: 2%
• Government contribution: up to 40% for new homes / up to 30% for existing homes
• Income cap: $103,000 for individuals / $165,000 for joint applicants or single parents
• Places per year: 10,000, with the scheme operating for 4 years
• Citizenship: Australian citizens only; permanent residents are not eligible
• Property ownership: You must not own another property in Australia or overseas
• Lenders as of June 2026: Commonwealth Bank and Bank Australia, with additional lenders expected to join the scheme
How you exit: When the property is sold, the government receives its proportional share of the sale proceeds. Alternatively, you can gradually purchase the government’s equity share as your financial circumstances improve. No rent or interest is charged on the government’s equity portion.
The First Home Guarantee, previously known as the First Home Loan Deposit Scheme, enables eligible first home buyers to purchase a property with a 5% deposit without having to pay Lenders Mortgage Insurance. The government provides a guarantee to the lender for the remaining 15%.
What changed from 1 October 2025:
• Unlimited places: The previous annual limit of 35,000 places has been removed
• No income cap: The former income thresholds of $125K for individuals and $200K for couples have been removed
• Higher property price caps: Significant increases now apply across Sydney, Brisbane, Melbourne, Perth and Adelaide
• Regional scheme consolidated: The Regional First Home Buyer Guarantee has been incorporated into the main scheme
Eligibility as of 2026:
• Australian citizen or permanent resident aged 18 or over
• First home buyer, or someone who has not owned property in Australia during the past 10 years
• Purchasing the property as an owner occupier
• Property purchase price must be below the applicable price cap
• Minimum 5% genuine savings
The Family Home Guarantee follows a similar structure but is designed for eligible single parents or legal guardians with at least one dependent child. It allows qualifying applicants to purchase with a deposit of just 2% and also provides an exemption from Lenders Mortgage Insurance.
| Location | Previous price cap | Current price cap from October 2025 |
|---|---|---|
| NSW: Sydney, Illawarra, Newcastle, Lake Macquarie | $900,000 | $1,500,000 |
| NSW: Other areas | $750,000 | $800,000 |
| VIC: Melbourne, Geelong | $800,000 | $950,000 |
| VIC: Other areas | $650,000 | $650,000 |
| QLD: Brisbane, Gold Coast, Sunshine Coast | $700,000 | $1,000,000 |
| QLD: Other areas | $550,000 | $700,000 |
| WA: Perth | $600,000 | $850,000 |
| WA: Other areas | $450,000 | $600,000 |
| SA: Adelaide | $600,000 | $900,000 |
| SA: Other areas | $450,000 | $500,000 |
| TAS: Hobart | $600,000 | $700,000 |
| TAS: Other areas | $450,000 | $550,000 |
| ACT | $750,000 | $1,000,000 |
| NT | $600,000 | $600,000, with Darwin increasing to $750,000 from 1 July 2026 |
| Feature | 5% Deposit Scheme | Lenders Mortgage Insurance |
|---|---|---|
| Purpose | Helps eligible home buyers purchase sooner with a smaller deposit | Provides protection to the lender if the borrower defaults on the loan |
| Cost to buyer | None: the government guarantees the lender | A premium of $5,000 to $35,000 or more may be added to the home loan |
| Who benefits | The borrower benefits by avoiding LMI and potentially entering the property market sooner | The lender is protected, while the borrower does not receive protection from the insurance |
| Availability | Available to eligible first home buyers and qualifying single parents | Generally available to borrowers purchasing with a deposit of less than 20% |
| Advantages | Disadvantages |
|---|---|
| No LMI: avoids $5,000 to $35,000 or more in insurance premiums | Possible price inflation: stronger demand could increase prices in entry level property markets |
| Unlimited places for the First Home Guarantee: no annual place limit following the October 2025 changes | Higher LVR can mean more interest: a 95% LVR loan may come with higher rates and greater interest costs over the loan term |
| Earlier entry into the market: reduces the time needed to save for a larger deposit | Property must remain within the applicable price cap: this can restrict available choices in expensive markets |
| Help to Buy can reduce the mortgage amount: the government's equity contribution can lower borrowing needs and monthly repayments | Help to Buy can reduce your share of future equity growth: because the government holds an equity stake, you receive a proportionally smaller share of capital gains |
• Check your eligibility: Make sure you satisfy the requirements of the scheme you are applying for, including citizenship, first home buyer status, the Help to Buy income limit and the required deposit.
• Select a participating lender: Not every lender offers these schemes. For the First Home Guarantee, review Housing Australia’s list of participating lenders. For Help to Buy, Commonwealth Bank and Bank Australia are participating as of June 2026, with additional lenders expected to join.
• Apply through your lender: Your lender will submit the guarantee application to Housing Australia for you as part of the home loan application. You do not submit a separate application directly to Housing Australia.
• Combine eligible schemes where permitted: The First Home Guarantee can be used alongside other government initiatives, including the First Home Super Saver Scheme, state based first home buyer grants and stamp duty concessions. Help to Buy cannot be used together with the First Home Guarantee.
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