The First Home Guarantee

Home Guarantee Scheme First Home Guarantee Fact Sheet 2024/25

What is the First Home Guarantee?
The First Home Guarantee (FHBG or Guarantee) is an Australian Government initiative to support eligible home buyers to buy a home sooner. It is administered by Housing Australia under the Home Guarantee Scheme (Scheme) on behalf of the Australian Government. Usually, home buyers with less than a 20 per cent deposit need to pay lenders mortgage insurance. Under the First Home Guarantee, eligible home buyers can purchase a modest home with a deposit of as little as 5 per cent (lenders criteria apply). This is because Housing Australia guarantees to a participating lender up to 15 percent of the value of the property purchased that is financed by an eligible home buyer’s home loan.

How does the First Home Guarantee work?
Eligible home buyers are able to apply for an eligible loan to buy an eligible property through a participating lender. The First Home Guarantee supports up to 35,000 guaranteed loans each financial year. Eligible borrowers can use the FHBG in conjunction with other government programs like the First Home Super Saver Scheme or state and territory first homeowner grants and stamp duty concessions. The Guarantee is not a cash payment or a deposit for your home loan.

Good news for First home buyers

What type of property can be bought?
For a property to be eligible, it must be a ‘residential property’ – this term has a particular meaning under the First Home Guarantee and participating lenders can assist if there is any doubt. Eligible residential properties include:
• 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 dates and requirements apply for the different property types.

Note: For transactions involving the purchase of land, Participating Lenders require your land to be titled prior to the issuance of a Housing Australia guarantee, therefore the land will need to be titled before the end of the 90-day pre-approval period.

Who is eligible?
• Australian citizens and permanent residents who are at least 18 years of age. • Individual applicants with a taxable income of up to $125,000 per annum for the previous financial year and joint applicants with a combined taxable income of up to $200,000 per annum for the previous financial year, as shown on the Notice of Assessment (issued by the Australian Taxation Office). For all FHBG applications made from 1 July 2024 to 30 June 2025 the relevant f inancial year assessed will be 2023-24. • The First Home Guarantee assists individual applicants and joint applicants (together) who have at least 5 per cent of the value of an eligible property saved as a deposit. If 20 per cent or more is saved after paying other home purchasing costs (e.g., stamp duty, legal costs), then the home loan will not be covered by the First Home Guarantee. • Loans under the First Home Guarantee require scheduled repayments of the principal and interest of the loan for the full period of the agreement (with limited exceptions for interest-only loans, which mainly relate to construction lending). The loan agreement must have a term of no more than 30 years. • Applicants must intend to be owner-occupiers of the purchased property. Investment properties are not supported by the First Home Guarantee. • Applicants can be either first home buyers or previous homeowners who haven’t owned a property in Australia in the past 10 years. Prior property ownership includes an interest in real property (including owning land) in Australia, a lease of land in Australia or a company title interest in land in Australia.

For more details: FHBG Factsheet.pdf (housingaustralia.gov.au)