First Home Buyer Guide
First Home Guarantee 2026: buy with 5% deposit and no LMI
The federal First Home Guarantee (FHBG) lets eligible first home buyers purchase with as little as a 5% deposit without paying Lenders Mortgage Insurance (LMI). The government guarantees the gap between your deposit and 20%, so you don't need to pay LMI, but you still borrow the full amount. Places are limited each financial year and allocated through approved lenders. This guide explains how it works, who qualifies, and what Brisbane buyers need to know, always verify current figures and available places directly with Housing Australia or an approved lender.
What is the First Home Guarantee?
The First Home Guarantee is a federal government scheme administered by Housing Australia. The government provides a guarantee to approved lenders for part of your home loan, which means you can buy with a deposit as low as 5% without having to pay Lenders Mortgage Insurance (LMI). You still borrow the full loan amount, the guarantee is a promise to the lender, not a cash grant. LMI can add tens of thousands of dollars to the cost of a loan, so avoiding it is a meaningful saving on upfront costs.
Who is eligible for the First Home Guarantee?
Eligibility conditions are set by Housing Australia and may change each financial year. As at the last review date, the following conditions generally apply:
- You are an Australian citizen or permanent resident aged 18 or over.
- You are a first home buyer, you have not previously owned or co-owned residential property in Australia.
- Your taxable income is within the current income cap (single or couple, check Housing Australia for the current threshold).
- The property purchase price is within the cap for your area, Brisbane and regional QLD have different caps (check Housing Australia for current figures).
- You intend to occupy the property as your principal place of residence.
- Your lender is an approved scheme lender, not all lenders participate.
- You have a minimum 5% genuine savings deposit.
Property price caps for Brisbane and Queensland
The FHBG has separate property price caps for capital city and regional areas, set by Housing Australia. Brisbane's cap is higher than regional QLD. These figures are reviewed periodically and may change. Check the current caps with Housing Australia or ask us directly, using a lender-approved calculator to check the cap for your specific postcode is the most reliable approach before making an offer.
How many places are available?
Housing Australia allocates a limited number of FHBG places each financial year. Places are not pooled, if they fill up, you'll need to wait until the next financial year or explore other options. We track availability across approved lenders and let you know the current position when you start your assessment.
Which lenders participate in the scheme?
Only Housing Australia-approved lenders can offer the First Home Guarantee. This includes most major banks and a range of non-bank lenders. Many lenders on the AFG panel are approved participants. The key difference from a standard loan is that your lender will manage the guarantee application on your behalf, we handle that process as part of your loan submission.
Can I combine the FHBG with the QLD First Home Owner Grant?
Yes. The federal First Home Guarantee and the Queensland First Home Owner Grant (FHOG) are separate schemes with separate eligibility criteria. You may qualify for both, for example, if you're buying a new home within the relevant price caps. We check your eligibility for both in your first call.
Can I combine the FHBG with the First Home Super Saver Scheme?
Yes. The First Home Guarantee and the First Home Super Saver Scheme (FHSS) can be used together. The FHSS lets you withdraw voluntary super contributions to use as part of your deposit, and that amount can count toward your 5% FHBG deposit, subject to the lender's genuine savings policy. See our separate guide on the First Home Super Saver Scheme, or ask us to check how both apply to your situation.
Frequently asked questions
Does the First Home Guarantee mean the government pays part of my loan?
No. The guarantee is a promise to your lender, not a payment to you. You still borrow the full amount and repay it. The benefit is that you avoid paying Lenders Mortgage Insurance (LMI), which is otherwise required when your deposit is less than 20%.
What is a genuine savings deposit for the FHBG?
Most approved lenders require that your 5% deposit is held as genuine savings, money you have saved yourself over at least 3 months, or an equivalent form accepted by the lender (such as proceeds from an asset sale or a term deposit). A gifted deposit may or may not satisfy the genuine savings requirement depending on the lender. We check lender policy for your scenario.
Can I apply as a couple?
Yes, but both applicants count toward the income cap, and neither can have previously owned residential property in Australia. Housing Australia sets the combined income cap for couples separately from the single-applicant cap, check the current figures directly.
What happens if I sell or move out within the guarantee period?
If you sell the property or cease to occupy it as your principal place of residence, the guarantee may no longer apply, which could affect your LMI exposure depending on the loan balance and property value at the time. We explain the implications for your specific scenario.
Is the FHBG available for investment properties?
No. The scheme is for owner-occupied purchases only. You must intend to occupy the property as your principal place of residence.
What if I buy with a 5% deposit but the property value falls?
The guarantee protects the lender, not your equity. If your property value falls below the loan balance, you would be in negative equity, the same risk as any low-deposit loan. We discuss this alongside your overall borrowing strategy in your first call.