The government’s First Home Guarantee scheme helps first homebuyers get into their own home for less, and they’ve just announced 50,000 new places for the 2024/25 financial year. Here’s everything you need to know.
Buying your first home can seem overwhelming, but the government is helping make it more achievable through the First Home Guarantee scheme. For the 2024/25 financial year, they’ve introduced 50,000 additional spots, making it easier for first-time buyers, single parents, and people in regional areas to step out of renting and into homeownership.
Benefits of the First Home Guarantee Scheme
The First Home Guarantee Scheme, managed by Housing Australia, supports first homebuyers, single parents, and those in regional areas to purchase or build their own home with a very low deposit—while avoiding the Lenders Mortgage Insurance (LMI) typically required for loans above an 80% loan-to-value ratio.
In addition to the advantage of a low deposit, skipping mortgage insurance can lead to significant savings. For example, mortgage insurance on an $800,000 home with a 5% deposit usually costs between $30,000 and $35,000. This fee is waived under the scheme.
Another perk for buyers using the scheme is that lenders often offer lower interest rates since these loans are backed by a government guarantee.
50,000 New Places Now Available
The government has recently announced the availability of 50,000 new places on the First Home Guarantee scheme for the 2024/25 financial year.
These places are divided among three different schemes:
First Home Guarantee Scheme: For FY2024/25, there are 35,000 spots to help eligible buyers purchase a home sooner with a deposit as low as 5% and without paying Lenders Mortgage Insurance (LMI).
Regional First Home Buyer Guarantee: This scheme offers 10,000 places for FY2024/25, assisting buyers to purchase homes in regional areas with a minimum 5% deposit and no LMI required.
Family Home Guarantee: Designed for eligible single parents and single legal guardians with at least one dependent, this scheme provides 5,000 places for FY2024/25, allowing home purchases with as little as a 2% deposit and no LMI.
Now Open to NZ 444-Visa Holders
One of the great updates to the scheme is its recent inclusion of New Zealand citizens holding a subclass 444 visa—the visa automatically granted upon arrival in Australia.
Previously, first home buyers from New Zealand had to contribute a 5% deposit and also pay Lenders Mortgage Insurance, which could add up to $75,000–$80,000 on an $800,000 property. Now, under the scheme, their upfront costs are reduced to approximately $40,000 for the same purchase.
The nuts and bolts
To qualify, applicants must be at least 18 years old and either an Australian citizen, an Australian permanent resident, or a New Zealand citizen holding a subclass 444 visa. Each scheme also has an income cap: $125,000 per year for individuals and $200,000 for couples or joint applicants. The property must be used as a primary residence.
- First Home Guarantee Scheme:This scheme is available to first home buyers or those who haven’t owned property in the past 10 years. It also allows two people—such as friends, siblings, or other family members—to apply together. In Melbourne, the maximum purchase price is capped at $800,000, and a minimum 5% deposit is required.
- Regional First Home Buyer Guarantee: Open to first-time buyers and those who haven’t owned a home in the last 10 years, this scheme also allows joint applications from two people. Properties must be located in regional areas, with a price cap of $650,000 in regional Victoria. A minimum 5% deposit is required.
- Family Home Guarantee: This option is designed for single parents or single legal guardians with at least one dependent. It’s available to those who may have previously owned a home but do not currently own any residential or investment property. In Melbourne, the property price cap is $800,000, and in regional Victoria, it’s $650,000. A minimum 2% deposit is required. Applicants must be the sole name listed on the mortgage and property title.
Top tip
With just 50,000 spots available across the schemes, acting quickly is key. Allocations under the First Home Guarantee are only valid for 90 days, so it’s best to submit your request close to your settlement or when your land titles.
How to apply
Start by checking your eligibility for the scheme. Next, choose a participating lender who will submit your application to Housing Australia on your behalf.
