When buying a home traditionally, buyers needed to save around 20% upfront, which often meant years of disciplined saving while property prices continued to climb.
That is about to change. From October 1st, the Australian Government’s First Home Buyers Guarantee (FHBG) will allow eligible buyers to purchase a property with a deposit as low as 5% without the added cost of Lenders Mortgage Insurance (LMI).
The FHBG can also be combined with other support measures such as the First Home Super Saver Scheme (FHSS), state and territory first homeowner grants, and stamp duty concessions. Together, these programs can help you move into your first home sooner than you may have thought possible.
What does this really mean for the buyer?
To put it simply, the FHBG reduces the size of the deposit you need. On a $600,000 property, a 20% deposit would normally mean saving $120,000. Under this scheme, that figure drops to just $30,000.
For young professionals, couples, and families looking to buy in metro or suburban areas, this can make homeownership feel achievable now rather than years down the track.
What kind of homes can you buy?
The FHBG can be used for a wide range of residential properties, including:
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- An existing house, townhouse or apartment
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- A house and land package
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- Land with a separate contract to build a home
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- An off-the-plan apartment or townhouse
Specific timelines and requirements apply for each property type, so it is important to check the details before you commit.
Who is eligible?
To apply for the First Home Guarantee, you will need to meet the following criteria:
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- Be a first home buyer, or not have owned a property in the past 10 years
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- Earn less than $125,000 as an individual, or less than $200,000 combined as joint applicants (based on your ATO Notice of Assessment)
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- Be at least 18 years old and hold a valid Medicare card (or Defence ID)
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- Be an Australian citizen or permanent resident
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- Have a deposit of between 5% and 20% of the property’s value
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- Plan to live in the property, since investment properties are not eligible
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- Choose a home within the property price cap for your postcode, which can be checked on Housing Australia’s website
If you qualify for other schemes such as the Regional First Home Buyer Guarantee (RFHBG) or the Family Home Guarantee (FHG), you will not be eligible for the FHBG.
What else do you need to know?
The details can feel like a lot, so here are the key points to remember:
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- Your loan needs to include principal and interest repayments for the full term, with a few exceptions for construction loans
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- The loan term can be no longer than 30 years
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- Once approved, you will have 90 days to buy your home before your place in the scheme expires
Other supports: Grants, schemes, stamp duty concessions
The First Home Guarantee is just one piece of the puzzle. Depending on your situation, you may also qualify for:
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- First Home Owner Grants to help boost your deposit
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- The First Home Super Saver Scheme (FHSS), which lets you use voluntary super contributions towards your deposit
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- Stamp duty concessions that reduce upfront costs on eligible properties
Taken together, these supports can make entering the property market much more achievable.
How Manage Your Loans can help
At Manage Your Loans, our brokers make the process simpler. We help you confirm your eligibility, work out your borrowing power, and compare home loans from a wide panel of lenders. We’ll guide you from application to settlement and will be with you at every stage.
Ready to see how close you are to owning your first home?
Buying your first home does not have to feel overwhelming. With the right guidance, you will gain clarity on your options, confidence in your decisions, and the support of a broker who puts your goals first.
Reach out to Manage Your Loans today and take the first step toward turning homeownership from a dream into a reality.