The First Home Guarantee scheme is one of the most useful tools available to first home buyers in Australia right now. It lets eligible buyers purchase a property with a deposit of as little as 5%, without having to pay Lenders Mortgage Insurance. Here's how it works and who can apply in 2026.

What Is the First Home Guarantee?

The First Home Guarantee is an Australian Government scheme administered through Housing Australia. Instead of requiring you to save a 20% deposit, the government acts as a guarantor for up to 15% of the property value. This removes the LMI requirement, which can save buyers tens of thousands of dollars on smaller deposits.

You still borrow the full amount from a participating lender. The government's guarantee just means the lender doesn't require the insurance that would otherwise be mandatory when your deposit is below 20%.

What Changed in 2026?

From 1 October 2025, the scheme was significantly expanded. The most important changes for buyers are:

  • No income caps. Previously, eligibility was limited to individuals earning below a certain threshold. That restriction no longer applies.
  • No waitlist or annual place limits. In earlier years, places filled quickly. The scheme now has unlimited places, so you don't need to rush to secure a spot before it closes.
  • Updated property price caps. The maximum purchase price you can use the scheme for has been increased across multiple regions.

These changes make the First Home Guarantee accessible to a much wider group of buyers than before.

Who Is Eligible for the First Home Guarantee?

To qualify in 2026, you need to:

  • Be an Australian citizen, permanent resident, or New Zealand citizen on a Special Category visa (Subclass 444)
  • Be at least 18 years old
  • Be a first home buyer, or someone who hasn't owned residential property in Australia in the past 10 years
  • Intend to live in the property as your principal place of residence
  • Have a minimum 5% deposit saved

The scheme is available through participating lenders. Not every lender offers it, so you'll need to apply through one that is approved to process First Home Guarantee applications.

How the First Home Guarantee Works in Practice

The process is simpler than it might sound. You find a property, confirm it's within the price cap for your area, and apply for a home loan through a participating lender or broker. The lender checks your eligibility, the government guarantee is applied, and you proceed with a standard loan settlement.

You borrow 95% of the purchase price and pay a 5% deposit. The government guarantees the gap between your deposit and the 20% threshold, removing the LMI requirement. You don't make any payments to the government and there's no fee for the guarantee itself.

What Are the Property Price Caps?

The property price caps vary by location and are updated periodically. They apply to both new builds and established homes. You'll need to check the current caps for the area you're buying in, as they differ between capital cities and regional areas. A broker can confirm what applies to your target suburb.

Is the First Home Guarantee Right for You?

For most eligible buyers, the scheme is worth considering. Avoiding LMI with a smaller deposit frees up capital and gets you into the market sooner. However, borrowing 95% of a property's value does mean your loan balance starts high, and your repayments will reflect that.

It's worth thinking through whether a 5% deposit is the right amount for your situation, or whether saving a larger deposit first gives you better financial footing. There's no single right answer, and it depends on your income, the property you're buying, and your current costs of renting.

Find Out If You're Eligible

At Swish, we work with first home buyers throughout the process, including assessing First Home Guarantee eligibility, identifying participating lenders with strong rates, and handling the application. We can tell you quickly whether the scheme applies to your situation and what the best approach looks like from there.

Book a free call with Swish to get a clear picture of your options as a first home buyer in 2026.