Guide to the First Home Guarantee for First Homebuyers

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The First Home Guarantee (Formerly the First Home Loan Deposit Scheme) is an  Australian government initiative, administered by the National Housing Finance and Investment Corporation (NHFIC).The scheme is aimed at helping low and middle income Australians buy their first home sooner by reducing the amount they need to save for a deposit and helping them avoid Lenders mortgage insurance (LMI) and access lower interest rates.

Typically, to avoid paying thousands in LMI fees, a borrower needs a 20% deposit. However, under the scheme, even with a 5% deposit, you avoid LMI fees since the government will guarantee up to 15% of the value of the property.

Eligible first home buyers will be able to use the scheme together with other government programs such as the various state and territory First Home Owners Grant and stamp duty concessions.

Under the First Home Guarantee, participating lenders and mortgage brokers will assess a first-home buyer’s eligibility alongside other standard home loan considerations such as serviceability (borrowing power), credit checks etc.

We will assist you to apply for the guarantee through a participating lender. You cannot apply directly for the guarantee.

Are you eligible?

There are several eligibility criteria first home buyers must meet to qualify for the First Home Guarantee:

  • All applicants must be:
    • An Australian citizen at least 18 years of age,
    • Permanent residents are not eligible,
    • Couples are eligible for the scheme only if they are married or in a de facto relationship,
    • Other persons buying together, such as siblings, parent/child or friends are not eligible,
    • Other persons buying together, such as siblings, parent/child or friends are not eligible.
  • You must meet the income eligibility requirements:
    • For singles, your taxable income cannot exceed $125,000 for the previous financial year,
    • For couples, your taxable income cannot exceed $200,000 for the previous financial year.
  • You must:
    • Be able to provide a deposit of at least 5% and not greater than 20% of the value of the property.  If you have a deposit greater than 20%, your home loan cannot be covered by the Scheme.  Most lenders require that you have accumulated at least 5% through genuine savings,
    • Intend to be the owner-occupier of the purchased property.  In the case of an active Australian Defence Force member applicant, the owner-occupier requirement may be waived after entering the loan, if they cannot meet this requirement because of their duties,
    • Provide your latest Notice of Assessment (NOA) from the ATO. 
  • You must be first home buyers who’ve not previously owned or had an interest in a residential property, either jointly or separately with someone else. This includes all residential strata, company title properties, regardless of whether is was an investment or owner occupied or whether it was ever lived in.
  • Loans under the FHG require scheduled repayments of the principal and interest for the full period of the agreement, which cannot have a term of more than 30years.
  • While there are no costs associated with applying for the First Home Guarantee, eligible applicants are responsible for meeting all costs and repayments for the home loan associated with their FHG.
  • You cannot apply directly for FHG places, this must be done through the lender you will secure finance through.

Is the property I plan to buy eligible?

Property price thresholds apply in capital cities, large regional centres, and regional areas. 
To view the maximum property purchase prices in the areas you’re interested in, click here for the NHFIC’s property price threshold cap table.

Under the FHG, home buyers can purchase 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.
  • Specific timeframes and criteria may apply to the different property types, Contracts of Sale and (if applicable) eligible building contracts may need to be executed by specific dates.  

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