First Home Guarantee (FHBG): What You Need to Know
Christian Stevens, Mortgage Broker
Published December 10, 2025, 2:10 P.M ET
Learn how the First Home Guarantee (FHBG) helps first home buyers purchase with just a 5% deposit and avoid LMI. Understand eligibility, price caps, benefits, and how Flint supports smarter first-home buying decisions.
🔑 Key Facts
- The First Home Guarantee (FHBG) helps eligible first home buyers purchase with as little as a 5% deposit, giving faster access to the Australian property market.
- The government guarantees up to 15% of the loan, allowing buyers to avoid Lenders Mortgage Insurance (LMI) and reduce upfront costs.
- Available for both newly built and existing properties, with purchase price caps based on location.
- Buyers must meet specific income, residency, and property eligibility requirements.
- Flint provides strategic first-home buyer guidance, helping buyers navigate FHBG rules, lender selection, and borrowing-power optimization.
What Is the First Home Guarantee?
The First Home Guarantee (FHBG) is part of the Australian Government’s Home Guarantee Scheme (HGS) and is designed to help eligible first-time buyers enter the market sooner. It enables you to purchase a home with just a 5% deposit — without the need to pay Lenders Mortgage Insurance (LMI), which can otherwise cost thousands.
Under the scheme, the government acts as guarantor for up to 15% of the loan, helping reduce upfront expenses while the buyer maintains full ownership. For Australians trying to break into competitive housing markets, this scheme can be a powerful strategic advantage.
How Does the FHBG Work?
- Administered by Housing Australia and delivered through a panel of participating lenders across the country.
- Available for first home buyers, eligible single parents, and some permanent residents depending on criteria.
- Up to 35,000 places are released each financial year, and demand is consistently high due to rising property prices.
While the scheme helps minimise deposit requirements, buyers still need to qualify for a home loan. Lenders will assess income, stability, spending habits, credit score, and overall borrowing capacity to determine serviceability.
Eligibility Criteria
To qualify for the FHBG, you must:
- Be an Australian citizen aged 18 or over
- Not have previously owned or held an interest in property in Australia
- Earn under $125,000 as an individual or under $200,000 combined as a couple (based on most recent taxable income)
- Intend to live in the property as your principal place of residence
- Have a deposit between 5% and 20% of the property price
Property Price Caps
Price caps apply depending on state and whether the location is considered metro or regional. These limits ensure the scheme supports accessible, realistic price brackets.
- NSW Metro: up to $900,000
- VIC Metro: up to $800,000
- Regional centers: between $650,000–$750,000
- Other locations: typically $600,000–$700,000 (subject to government updates)
Benefits of Using FHBG
- Avoid LMI: Save thousands by skipping Lenders Mortgage Insurance even with a small deposit.
- Buy sooner: Eliminates the long savings period usually required for a 20% deposit.
- More lender options: Delivered through many participating Australian banks and lenders, giving buyers flexibility.
- Full property ownership: The government guarantees the loan portion; it does not own or share any part of the property.
This can significantly increase affordability, especially for younger professionals, couples, and families entering the Australian housing market.
Things to Watch Out For
- Limited places: The scheme operates on a capped annual quota, so applying early is essential.
- Loan approval required: Buyers must still meet lender serviceability standards and demonstrate responsible financial behavior.
- Owner-occupier requirement: FHBG cannot be used for investment properties or rentals.
📞 Ready to Buy Your First Home with a 5% Deposit?
At Flint, we support first home buyers through every stage of the process by offering:
- Eligibility and affordability checks for the First Home Guarantee
- Guidance on comparing lenders, rates, features, and government incentives
- Borrowing-power strategy to strengthen applications
- Pre-approval support to help you avoid LMI and purchase sooner
Speak with Flint today for expert, strategic support — and move confidently toward your first home.
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