Everything You Need to Know About the First Home Buyers Guarantee in Australia
Everything You Need to Know About the First Home Buyers Guarantee in Australia
The First Home Buyers Guarantee (FHBG) is an Australian government initiative designed to assist first-time homebuyers in purchasing their first property. The scheme aims to make homeownership more accessible by helping buyers with a smaller deposit and avoiding the need for costly lenders mortgage insurance (LMI). Here’s everything you need to know about the First Home Buyers Guarantee in Australia.
What is the First Home Buyers Guarantee?
The FHBG, formerly known as the First Home Loan Deposit Scheme, is a government-backed scheme that allows eligible first-time homebuyers to purchase a property with a deposit as low as 5%. The government provides a guarantee for up to 15% of the property’s purchase price, which means you don’t have to pay LMI, a significant cost for buyers with smaller deposits.
Eligibility Criteria
To be eligible for the FHBG, there are several requirements:
First-time Buyer: You must be purchasing your first home in Australia.
Income Limit: Applicants must meet specific income limits. As of 2025, singles can earn up to $125,000 per year, while couples can earn up to $200,000 annually.
Property Price Cap: The scheme has set property price caps depending on the location of the property. These caps vary across states and territories, with larger caps in major cities like Sydney and Melbourne.
Minimum Deposit: You need at least a 5% deposit of the property’s purchase price. The government guarantees the remaining 15% to help you avoid LMI.
How Does it Work?
Under the FHBG, once your application is approved, the government guarantees up to 15% of the property value to the lender. This reduces the risk for the lender and allows you to borrow more with a smaller deposit. In turn, this helps you avoid paying LMI, which can add thousands of dollars to your home purchase.
Benefits of the First Home Buyers Guarantee
Lower Deposit: You can secure a home with just 5% of the purchase price, making it easier to enter the property market.
No LMI Fees: The government guarantee removes the need for LMI, saving you a significant amount of money.
Faster Home Ownership: With a smaller deposit and no LMI, you can get into your home sooner, building equity faster.
How to Apply
To apply for the FHBG, you’ll need to contact a participating lender who will assess your eligibility and help you through the application process. It's advisable to get in touch with your lender early to ensure you meet all the criteria and can secure the guarantee.
Need help navigating the First Home Buyers Guarantee?
At Broker Vision, our expert team is here to help you understand and access the FHBG, guiding you through the application process and ensuring you take full advantage of the benefits. We’ll work with you to find the best lending options and help you secure your dream home sooner. Contact Broker Vision today to start your journey to homeownership!