How do I secure a spot under the First Home Guarantee 5 per cent scheme?

The First Home Guarantee is one of the most valuable schemes for first home buyers, letting you buy with a small deposit and no Lenders Mortgage Insurance. It changed significantly in late 2025, so here is how to position yourself for it as at 2026, and what still applies.

What the scheme does

The First Home Guarantee lets eligible first home buyers purchase with a deposit as low as 5 per cent without paying Lenders Mortgage Insurance. The government guarantees part of the loan, up to 15 per cent of the property value, so the lender does not require the premium. The government does not lend you money or take a stake in your home.

No more race for places

Previously the scheme had a limited number of places each year, which created a scramble to secure one before they ran out. From 1 October 2025 the place limit was removed, so there is no longer a cap on places. If you meet the criteria and a lender approves you, the guarantee is available, which removes the old urgency.

Income caps are gone too

The income caps that previously applied, which excluded higher earners, were also removed from 1 October 2025. So eligibility no longer depends on earning under a set income. This opened the scheme to many buyers who were previously shut out, which is why it is worth checking even if you assumed you earned too much.

You still need genuine savings

Despite the changes, you still need a deposit of at least 5 per cent, and lenders generally expect this to include genuine savings, money saved over time rather than only a recent gift. So the scheme reduces how much deposit you need, but it does not remove the need to save and demonstrate that saving.

The other eligibility rules

To qualify you generally need to be an Australian citizen or permanent resident, at least 18 years old, buying as an owner occupier, and a first home buyer, though there is now a provision for those who have not owned property in Australia in the past 10 years. You also need to buy within the property price cap for your area.

Price caps still apply

The scheme only applies to properties at or below the price cap for your location. As at 2026 the cap in Adelaide is 900,000 dollars, having been lifted, with different caps in other cities and regions. So the property you choose still has to fall within the relevant cap, which you should confirm against the official source.

How to position yourself

To make the most of the scheme, focus on building at least a 5 per cent genuine savings deposit, keeping your credit clean, and choosing a property within the cap. A broker who works with participating lenders can confirm your eligibility and apply on your behalf, usually at no cost to you. Always verify the current rules with Housing Australia. This is general information, not advice.