First Home Guarantee Scheme 2026: Complete Guide to the FHBG

The First Home Guarantee (FHBG) is the Australian Government’s flagship scheme to help first home buyers purchase a property with as little as a 5% deposit — without paying Lenders Mortgage Insurance (LMI). Since its major expansion in October 2025, the scheme has become significantly more accessible, with unlimited places, higher property price caps, and broader eligibility criteria.

This guide covers everything you need to know about the FHBG in 2026: how it works, who qualifies, current property price caps by state and territory, how to apply, related guarantee schemes, and how it compares to other LMI avoidance options.

What Is the First Home Guarantee (FHBG)?

The FHBG is administered by Housing Australia (formerly the National Housing Finance and Investment Corporation). It allows eligible first home buyers to purchase a property with a deposit as low as 5% without paying LMI.

Here is how it works:

You save a deposit of at least 5% of the property value.
You apply for a home loan through a participating lender.
The Australian Government guarantees the difference between your deposit and 20%.
Because the government acts as guarantor, the lender does not require LMI.

The guarantee is not a cash payment, grant, or loan. The government does not give you money. It simply provides a guarantee to the lender, removing their need to charge you for mortgage insurance. You still need to service the full loan amount, and you still own 100% of the property.

What the FHBG Saves You

On a $750,000 property with a 5% deposit, LMI would typically cost $28,000 to $38,000. The FHBG eliminates that cost entirely. Use the LMI calculator to estimate what the scheme could save on your specific purchase.

October 2025 Expansion: What Changed

The FHBG underwent its most significant expansion since launch. The changes, effective from 1 October 2025, transformed the scheme from a limited, competitive program into a broadly accessible one.

Unlimited Places

Previously, the FHBG was capped at 35,000 places per financial year. Places were exhausted within months, and many eligible buyers missed out. From October 2025, the scheme has no place limits. If you meet the eligibility criteria, you can access the guarantee — no race to secure a spot.

Higher Property Price Caps

The maximum property values under the scheme were increased substantially to reflect actual market conditions:

Location	Previous Price Cap	New Price Cap (From Oct 2025)
Sydney	$900,000	$1,500,000
Melbourne	$800,000	$1,300,000
Brisbane	$700,000	$1,000,000
Perth	$600,000	$900,000
Adelaide	$600,000	$900,000
Canberra (ACT)	$750,000	$1,000,000
Hobart	$600,000	$750,000
Darwin	$600,000	$750,000
Regional NSW	$750,000	$1,000,000
Regional VIC	$650,000	$850,000
Regional QLD	$550,000	$800,000
Regional WA	$450,000	$650,000
Regional SA	$450,000	$650,000
Regional TAS	$450,000	$550,000
Regional NT	$500,000	$600,000

These caps represent a significant improvement. The previous Sydney cap of $900,000 excluded most of the metropolitan area. The new $1,500,000 cap makes the scheme viable for a much broader range of properties.

Broader Eligibility

The definition of “first home buyer” was expanded. You can now qualify if you have not owned a property in the past 10 years, even if you have previously owned a home. This opens the scheme to people re-entering the market after a relationship breakdown, returning from overseas, or recovering from financial hardship.

Permanent residents are also now eligible, not just Australian citizens.

Income Caps Removed

Under previous rules, individuals earning above $125,000 and couples earning above $200,000 were excluded. These income caps have been removed for the FHBG guarantee component. Your income affects your borrowing capacity (through standard serviceability assessments) but no longer disqualifies you from the scheme itself.

Current FHBG Eligibility Criteria (2026)

To qualify for the First Home Guarantee, you must meet all of the following:

Personal Eligibility

Not owned property in the past 10 years — this includes residential property anywhere in Australia, whether freehold, leasehold, or company title. It does not include commercial property or land without a dwelling.
Australian citizen or permanent resident — temporary visa holders do not qualify.
At least 18 years of age at the date of the loan contract.
Individual or joint applicants — joint applicants must both meet the eligibility criteria.

Property Requirements

Below the property price cap for your location (see table above).
Residential property — house, townhouse, apartment, house and land package, off-the-plan apartment, or land with a contract to build.
Owner-occupied — you must intend to live in the property as your primary residence within 12 months of settlement (or completion of construction).
Not for investment purposes — the property cannot be purchased as an investment property.

Financial Requirements

Minimum 5% deposit — genuine savings, including gifts from family (conditions apply per lender).
Standard lending criteria — you must meet the participating lender’s serviceability and credit requirements.
No income cap — there is no maximum income threshold for the guarantee itself, though individual lenders may have their own policies.

What Does Not Qualify

Investment properties
Properties above the price cap for your area
Buyers who have owned property within the past 10 years
Temporary visa holders
Trust or company purchases

How to Apply for the FHBG

The FHBG is accessed through participating lenders, not directly through Housing Australia. Here is the step-by-step process:

Step 1: Confirm Your Eligibility

Review the criteria above. The key questions are: have you owned property in the past 10 years? Are you an Australian citizen or permanent resident? Is your target property below the price cap for its location?

Step 2: Choose a Participating Lender

Not all banks and lenders participate in the scheme. Major participating lenders include:

Commonwealth Bank
NAB
Westpac
ANZ (through select channels)
Bank of Queensland
Bendigo Bank
ING
Various credit unions and smaller lenders

A mortgage broker can help you compare participating lenders and identify which one offers the best rate and loan features for your situation.

Step 3: Apply for a Home Loan

You apply for a home loan as normal through your chosen participating lender. During the application, the lender assesses your FHBG eligibility and submits the guarantee request to Housing Australia.

Step 4: Receive Approval

If you meet the eligibility criteria and the lender approves your loan, the guarantee is issued. The lender then does not charge LMI on the loan.

Step 5: Purchase and Settle

You proceed with your purchase as normal. The guarantee remains in place for the life of the loan (or until you refinance, sell, or reach 80% LVR through repayments and property growth).

Timeline

The FHBG application is processed alongside your standard home loan application. There is no separate application form or waiting period. From initial application to approval, expect 1–3 weeks depending on the lender.

Family Home Guarantee (FHG)

The Family Home Guarantee is a separate scheme within the same program, specifically designed for eligible single parents and single legal guardians of at least one dependent child. It allows purchases with as little as a 2% deposit — no LMI required.

FHG Eligibility

Single parent or single legal guardian with at least one dependent child
Australian citizen or permanent resident aged 18+
Not owned property in the past 10 years
Meets the lender’s standard credit and serviceability requirements

The FHG uses the same property price caps as the FHBG and is accessed through the same participating lenders. It has also been expanded to unlimited places since October 2025.

Why 2% Deposit Matters

For a $750,000 property, a 2% deposit is just $15,000. Without the FHG, buying at 98% LVR would be impossible through standard lending channels (most lenders cap at 95% LVR). The scheme provides a pathway that would otherwise not exist for single-parent families.

Regional First Home Buyer Guarantee (RFHBG)

The Regional First Home Buyer Guarantee supports eligible first home buyers purchasing in regional areas. It uses the regional property price caps listed in the table above and is otherwise subject to the same eligibility criteria as the FHBG.

The RFHBG was introduced to specifically address affordability in regional areas where growth has outpaced local wage growth. It operates through the same participating lenders and application process.

Limitations of the FHBG

While the scheme has been significantly improved, it still has meaningful limitations that buyers should understand before relying on it as their only pathway.

Owner-Occupied Only

The FHBG only applies to owner-occupied purchases. You cannot use it to buy an investment property. If your financial strategy involves purchasing an investment property first and renting where you live, the FHBG is not available to you.

Property Price Caps

Although the caps have been raised significantly, they still exclude properties above the threshold. In Sydney, properties above $1,500,000 are not eligible. In many desirable suburbs, this cap is still a constraint.

First Home Buyers Only (10-Year Rule)

If you have owned a property within the past 10 years, you do not qualify. This excludes many buyers who are purchasing a subsequent home, upsizing, or buying after selling a previous property within the past decade.

Refinancing Complications

If you refinance with a different lender, the FHBG guarantee does not automatically transfer. If your LVR is still above 80% at the time of refinancing, you may need to pay LMI with the new lender — or ensure the new lender also participates in the scheme and can transfer the guarantee.

Cannot Be Combined With Investment Plans

You must live in the property. If your circumstances change and you want to convert the property to an investment within the first 12 months, you may breach the scheme’s conditions.

FHBG vs Professional LMI Waivers: Which Is Better?

For buyers who qualify for both, the choice between the FHBG and a professional LMI waiver depends on your circumstances. Here is a direct comparison:

Feature	FHBG	Professional LMI Waiver
Minimum deposit	5%	Varies (5–15% depending on lender)
Property price cap	Yes (varies by location)	No cap
Owner-occupied only	Yes	No — investment properties also eligible with some lenders
First home buyers only	Yes (10-year rule)	No — works on subsequent purchases
Income cap	None (since Oct 2025)	Varies by profession ($150K+ typical)
Eligible professions	N/A — any buyer who qualifies	Specific professions only
Place limits	None (since Oct 2025)	None
Available through all lenders	No — participating lenders only	Select lenders (broker recommended)
Transferable on refinance	Complicated	Yes — apply with new lender

When the FHBG Is the Better Option

You are not in an eligible profession for an LMI waiver
Your income is below the threshold for professional waivers
You are a first home buyer with a 5% deposit and the property is under the price cap
You want access to the widest range of participating lenders

When a Professional LMI Waiver Is Better

Your target property exceeds the FHBG price cap
You have owned property within the past 10 years
You are purchasing an investment property
You want more flexibility with refinancing in the future
You want no restrictions on property type or location

For many professionals, the LMI waiver offers strictly more flexibility. If you are eligible, check your waiver eligibility here — it takes 60 seconds with no credit check.

Can You Use Both?

Generally, no. If you qualify for a professional LMI waiver, you do not need the FHBG guarantee — LMI is already waived. In practice, you would choose one pathway based on which provides the better outcome for your specific purchase (usually whichever allows you to borrow more, at a better rate, with fewer restrictions).

A mortgage broker experienced with both pathways can advise on the optimal approach for your situation.

Frequently Asked Questions

Is the First Home Guarantee still available in 2026?

Yes. The FHBG is ongoing and has had its place limits removed since October 2025. There is no annual cap on the number of guarantees issued.

What is the income limit for the First Home Guarantee?

There is no income limit for the FHBG guarantee component since the October 2025 expansion. Your income affects your borrowing capacity through standard lender assessments but does not disqualify you from the scheme.

Can couples apply for the FHBG?

Yes. Joint applicants can apply, but both applicants must meet the eligibility criteria (neither can have owned property in the past 10 years, both must be Australian citizens or permanent residents).

What happens if I refinance while on the FHBG?

The guarantee does not automatically transfer to a new lender. If your LVR is still above 80%, you may need to pay LMI with the new lender or find a participating lender that can transfer the guarantee. It is advisable to wait until your LVR reaches 80% through repayments and growth before refinancing.

Can I use the FHBG to buy an investment property?

No. The scheme is strictly for owner-occupied purchases. You must intend to live in the property as your primary residence within 12 months of settlement.

Does the FHBG affect my stamp duty concessions?

No. The FHBG operates independently of state and territory stamp duty concessions. You can claim both if eligible — for example, a first home buyer stamp duty exemption in NSW plus the FHBG guarantee.

Can I use the FHBG with a guarantor?

No. The FHBG acts as the guarantor (the government guarantees the gap between your deposit and 20%). You cannot stack a family guarantor on top of the scheme.

What if property prices exceed the cap in my area?

If your target property exceeds the FHBG price cap, you cannot use the scheme for that purchase. Alternatives include a professional LMI waiver (no price cap), a guarantor loan, or saving a larger deposit. Explore all deposit options to find the right fit.

How do I find a participating lender?

Housing Australia maintains a list of participating lenders on their website. However, the easiest approach is to work with a mortgage broker who can compare all participating lenders and find the best loan product for your circumstances.

Next Steps

The FHBG is one of several pathways to buying a home without paying LMI. Your best option depends on your profession, deposit size, property price, and whether this is your first home.

Check if you qualify for a professional LMI waiver — free, 60 seconds, no credit check. If eligible, this may offer more flexibility than the FHBG.
Explore all deposit options including the 5% deposit pathway
Estimate your LMI cost to see exactly how much the FHBG or an LMI waiver could save you
Learn more about LMI and why avoiding it matters