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First Home Guarantee Scheme: What Is It and Who Can Use It?

November 2, 2023
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4 mins


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First home guarantee

If you want to break into the property market for the first time, you may have heard about the first home guarantee scheme. This scheme, devised by the Australian Government, aims to help homeowners get into their first home sooner. With an Inovayt mortgage broker by your side, buying your first home will go from a distant wish to a reality with the help of the first home guarantee scheme. 

Ready to buy your first home? Read on for more details. 

What is the first home guarantee scheme?

If you’re looking to buy your first home, chances are you’ve heard about the first home guarantee scheme. If you haven’t and are wondering what it is, our expert mortgage brokers are here to walk you through it. 

For those who are eligible, part of their home loan from a participating lender is guaranteed by Housing Australia. This enables an eligible home buyer to buy a home with as little as a 5 per cent deposit without paying lenders mortgage insurance (LMI) through select lenders. 

Who is eligible for the first home guarantee scheme? 

The first home guarantee scheme is only eligible for those who meet specific criteria. This criteria includes

  • You must be an Australian citizen 
  • You must be at least 18 years of age
  • You must not earn above $125k as an individual or $200k as a couple 
  • You must be buying a home to live in, not a home to invest
  • You must be a first-time home buyer

It’s also important to note: 

‘Applicants prior to 1 July 2023 were restricted to those who were married or in a de-facto relationship, as well as single applicants. From 1 July 2023, any two eligible people may apply together, including friends, siblings or other family members.’

This eligibility change has opened some significant doors for family members and friends looking to buy together despite not being in a de facto relationship. 

What are the deposit requirements for the first home guarantee scheme?

Like with all loan applications, the first home guarantee scheme has deposit requirements it asks applicants to meet. First home buyers applying for this scheme must have between a 5 per cent and 20 per cent deposit (varies depending on lender). The deposit must also consist of genuine savings (e.g., not all inheritance money). 

One thing to note is that only some lenders will accept a 5 per cent deposit, with some requiring higher based on your financial situation. The Inovayt team can help you sort through the nuances of the scheme and help you find a lender that suits your financial needs and deposit requirements. 

What are the property types and price caps in the first home guarantee scheme?

Along with deposit requirements, the first home guarantee scheme has particular parameters regarding the type of house or property you can purchase. 

Under the Home Guarantee Scheme (HGS), home buyers can buy a residential property, including

  • an existing house, townhouse or apartment 
  • a house and land package 
  • land and a separate contract to build a home 
  • an off-the-plan apartment or townhouse.

Property price caps (per financial year) apply based on which Australian state you reside in. This price cap is also determined by whether you live in a major city or a regional area. 

You can find the complete list of price caps here

first home guarantee scheme

What are the benefits of the first home guarantee scheme?

The most significant benefit to the first home guarantee scheme is that you can get into the property market sooner while saving on other fees associated with buying a house, such as LMI and stamp duty. 

Saving enough money for a deposit is often the most challenging part of buying a house. With this scheme, the government are trying to give first home buyers the assistance they need to enter the property market. 

It’s important to note that the timing of accessing the grant funding relies on several factors, including:

  • Settlement – typically, these grants are dispersed at the time of settlement when you officially own the property.
  • Application processing time – processing times for your application may vary, so it’s best to submit it well before your planned settlement date to avoid any delays. 
  • Additional grants – your Inovayt mortgage broker may mention that you’re eligible for additional grants or concessions, such as the First Home Buyer Duty Reduction, which can further reduce upfront costs. 

How can an Inovayt mortgage broker help you apply for the first home guarantee scheme?

If you feel like you’ve been treading water trying to save for a deposit for your first home, the team at Inovayt are here to help. We work with clients from various backgrounds and unique financial situations and have helped them into their new homes sooner than they thought possible. 

Having an Inovayt mortgage broker on your side from the beginning is invaluable. They provide you with expert advice regarding your loan and financial circumstances. Aside from this, your Inovayt mortgage broker assists you by checking your eligibility against the criteria set by the HGS and to ensure you meet the requirements for the property you intend to purchase. They can advise you on whether you meet the requirements and how to maximise your chances of approval.

By coming to an Inovayt mortgage broker, you’ll get the best possible deal for your first home. Your broker will also act as the middle person between you and other entities like the bank and your conveyancer while keeping you updated. 

If you’re ready to start house hunting and want to chat about the first home guarantee scheme, get in touch with our expert team today. 

Still have questions about the first home guarantee scheme? Let's talk.


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