The First Home Guarantee, now officially the Australian Government 5% Deposit Scheme, lets eligible first home buyers in Australia purchase with a deposit as small as 5% without paying Lenders Mortgage Insurance. The government guarantees part of the loan so a participating lender can lend up to 95% of the property value, which is what removes the LMI requirement. Since 1 October 2025 there is no income cap and no annual limit on places — both previously excluded large numbers of applicants. Property price caps still apply and vary by state and region.
Most content still ranking for this scheme describes rules that no longer apply, so it is worth being precise about what is different. The scheme was expanded on 1 October 2025 and renamed. If you checked your eligibility before that date and were knocked back on income or missed out on a place, check again — the two things that most commonly excluded people are gone.
| Rule | Before 1 Oct 2025 | Now |
|---|---|---|
| Income cap | $125,000 single / $200,000 couple | None. Your income does not restrict access. |
| Places available | Capped at a set number each financial year | Unlimited. No quota and no waiting list. |
| Property price caps | Lower caps by region | Still apply, but increased across the board |
| Scheme name | Home Guarantee Scheme | Australian Government 5% Deposit Scheme |
If you were told you earned too much, that advice is out of date. A single applicant on $150,000 or a couple on $250,000 is eligible on income grounds today. The binding constraint is now the property price cap for where you are buying, plus your lender's own credit assessment.
The price cap is the main eligibility limit that remains. Both the purchase price and the lender's assessed valuation must be at or below the cap. If you are building on vacant land under separate contracts, the land price plus build cost combined must come in under it.
Property price caps for the Australian Government 5% Deposit Scheme. Figures transcribed from firsthomebuyers.gov.au, confirmed as at 8 August 2026.
| State or territory | Capital city & regional centres | Rest of state |
|---|---|---|
| New South Wales | $1,500,000 | $800,000 |
| Victoria | $950,000 | $650,000 |
| Queensland | $1,000,000 | $700,000 |
| Western Australia | $850,000 | $600,000 |
| South Australia | $900,000 | $500,000 |
| Tasmania | $700,000 | $550,000 |
| Australian Capital Territory | $1,000,000 | Single cap, all areas |
| Northern Territory | $750,000 | $600,000 |
| Jervis Bay Territory & Norfolk Island | $550,000 | Single cap, all areas |
| Christmas Island & Cocos (Keeling) Islands | $400,000 | Single cap, all areas |
Regional centres attracting the higher cap — New South Wales: Central Coast, Coffs Harbour-Grafton, Illawarra, Mid North Coast, Richmond-Tweed, Newcastle, Lake Macquarie. Victoria: Geelong. Queensland: Gold Coast, Sunshine Coast. Everywhere else in those states falls under the rest-of-state cap. Check the exact cap for a specific address with the government's postcode tool before you make an offer, because a suburb you assume is metropolitan may not be.
The government does not lend you money and does not give you a deposit. It guarantees part of your loan to the lender, which removes the lender's requirement for Lenders Mortgage Insurance. You still borrow up to 95% of the property value and you repay all of it.
The guarantee protects the lender, not you. If you default, the guarantee pays the lender and the government may pursue you for the amount. It is not insurance for the borrower, and it does not reduce what you owe.
The value of the guarantee is the LMI premium you avoid, and it scales with your loan size. On a 5% deposit the premium avoided grows quickly with the purchase price.
Indicative LMI premiums avoided at 95% LVR. Actual premiums vary by lender, insurer and borrower profile — treat these as a magnitude, not a quote.
| Purchase price | 5% deposit | Loan amount | Indicative LMI avoided |
|---|---|---|---|
| $500,000 | $25,000 | $475,000 | $15,000 – $20,000 |
| $700,000 | $35,000 | $665,000 | $21,000 – $28,000 |
| $900,000 | $45,000 | $855,000 | $27,000 – $36,000 |
LMI is normally capitalised into the loan rather than paid upfront, so avoiding it also avoids paying interest on the premium for up to 30 years. The real saving is meaningfully larger than the premium alone.
Core eligibility criteria for the Australian Government 5% Deposit Scheme, confirmed as at 8 August 2026.
| Criterion | Requirement |
|---|---|
| Residency | Australian citizen or permanent resident |
| Age | At least 18 years old |
| Income | No cap. Your income does not restrict access. |
| Places | Unlimited. No quota and no waiting list. |
| Buyer status | A first home buyer, or you have not owned a home or land in Australia in the last 10 years |
| Deposit | Minimum 5% for first home buyers |
| Single parents / legal guardians | Minimum 2% deposit, applying on their own — no joint applications |
| Occupancy | You must live in the home as an owner-occupier. No investment properties. |
| Loan type | Owner-occupier principal and interest loan from a participating lender, up to 30 years |
| Applicants | On your own, or jointly with one other person — a partner, friend or family member |
| Property price | At or below the cap for the location, on both price and the lender's valuation |
Meeting the scheme criteria is necessary but not sufficient. You also have to meet the participating lender's own credit policy, and lenders differ. Being eligible for the scheme and being approved for the loan are two separate hurdles.
This is now the main eligibility limit. Use the government's postcode tool for the specific location rather than assuming the metropolitan cap applies.
Scheme eligibility does not mean loan approval. Knowing what a lender will actually advance you determines whether a property under the cap is within reach.
You cannot apply to the government directly. The guarantee is arranged by the lender as part of your home loan application, so which lender you choose matters.
You must occupy the property as an owner-occupier. The scheme does not cover investment purchases.
No. The income caps of $125,000 for singles and $200,000 for couples were removed on 1 October 2025 when the scheme became the Australian Government 5% Deposit Scheme. Your income no longer restricts access, though your lender still assesses whether you can service the loan.
No. The annual quota was abolished on 1 October 2025. Places are unlimited and there is no waiting list, so there is no need to rush an application to secure a spot. You can apply whenever you are ready to buy.
The Australian Government 5% Deposit Scheme. It was previously part of the Home Guarantee Scheme, and the First Home Guarantee name is still widely used. They refer to the same support: buying with a 5% deposit without paying Lenders Mortgage Insurance.
A minimum of 5% of the purchase price as a first home buyer, or 2% if you are a single parent or legal guardian. Both the purchase price and your lender's valuation of the property must be at or below the price cap for that location.
It varies by state and by whether the location counts as a capital city or regional centre. New South Wales is the highest at $1,500,000 for Sydney, Newcastle, Lake Macquarie, the Illawarra and several other regional centres. Check the exact cap for a specific address with the government postcode tool before making an offer.
Possibly. You qualify if you are a first home buyer, or if you have not owned a home or land in Australia in the last 10 years. That 10-year rule brings back people who previously owned and have since been out of the market.
No. You must live in the property as an owner-occupier, and the loan must be an owner-occupier principal and interest loan. Investment purchases and interest-only loans are excluded.
To a participating lender, as part of your home loan application. You cannot apply to Housing Australia directly. Lenders differ in their credit policies, so which one you apply to affects whether you are approved even when you meet every scheme criterion.
There is no longer a queue to beat — places are unlimited and income no longer matters. What can still put a property out of reach is the price cap, because caps are fixed by region while prices are not. Knowing what you can borrow, and which lenders participate, is what turns eligibility into an approval. Scheme rules confirmed as at 8 August 2026.
Sources
NIK Finance Pty Ltd (ACN 685 393 917) is a Credit Representative (567387) of Finsure Finance & Insurance Pty Ltd (Australian Credit Licence 384704). This page is general information only and does not constitute financial advice. Consider your personal circumstances and speak with a licensed broker before applying for credit.