The First Home Guarantee Scheme (FHBG) is back in FY24 and it’s bigger and better than ever, with 35,000 FHBG places available until 30 June 2024! We explain how it works, and share some purchase scenario examples to help you understand your eligibility, and the cash contributions required, to buy your first home with a 5% deposit.
What is the First Home Guarantee (FHBG)?
First home buyers will know the hardest part of buying a home is saving up the 20% deposit. But thanks to the First Home Guarantee , you could be eligible to buy an established or new property with as little as 5% deposit, and no need to pay Lenders Mortgage Insurance (LMI). Administered by the National Housing Finance and Investment Corporation (NHFIC), the Australian Government essentially guarantees a 15% chunk of an eligible home buyer's loan from a Participating Lender.
The First Home Guarantee provides 35,000 places in FY24 and is one of three guarantees under the Home Guarantee Scheme. The others are the Regional First Home Buyer Guarantee (RFHBG), which we cover below, and the Family Home Guarantee (FHG) , which supports eligible single parents or legal guardians to buy a home regardless of whether they're a first home buyer or previous home owner.
The basic breakdown of the scheme is as follows:
- Bank Lending: $80% of the purchase price
- Government Guarantee: 15% of the purchase price
- Individual/Joint Applicants: 5% purchase price (plus relevant fees & charges)
The applicant/s will then need to be able to show serviceability to be able to pay back the loan at a 95% LVR, whilst showing savings to cover the 5% cash contribution required to complete the purchase.
Property price caps do apply, and they vary depending on your state, territory and property location. In capital cities (and regional centres of Newcastle and Lake Macquarie, Illawarra, Geelong, Gold Coast and Sunshine Coast) the below price caps apply:
State | Purchase Price Cap |
|---|---|
NSW | $900,000 |
VIC | $800,000 |
QLD | $700,000 |
WA | $600,000 |
SA | $600,000 |
TAS | $600,000 |
What is the Regional First Home Buyer Guarantee (RFHBG)?
The Regional First Home Buyer Guarantee is the same as the First Home Guarantee but is exclusive to buyers in regional areas. Places in the regional edition of the scheme are limited to 10,000 in FY24. (Check out the Regional Checker tool to determine your eligibility).
Price caps are lower under the Regional First Home Buyer Guarantee, too. Outside of the regional centres listed above, the regional area price caps are:
| State | Purchase Price Cap |
|---|---|
NSW | $750,000 |
VIC | $650,000 |
QLD | $550,000 |
WA | $450,000 |
SA | $450,000 |
TAS | $450,000 |
NT | $600,000 |
First Home Guarantee Changes
Casting a much broader net for FY24, the government has shifted away from restricting availability to just Individuals or Couples, and has opened the scheme to ‘Joint Applicants’, which includes buying a home with friends, siblings and other family members. Notably, permanent residents can also utilise the government’s assistance to purchase their first property together or individually.
The First Home Guarantee scheme also allows for applicants who have NOT owned property for over a ten-year period to be viewed as “first home buyers” for the purpose of the scheme.
First Home Guarantee Eligibility
The property purchase must be for owner-occupied purposes, with the required scheduled repayments to be principal and interest for the full period of the loan agreement (with limited exceptions for interest only).
Potential applicants must apply through an authorised representative (such as BlueRock Finance ) or directly through one of the 32 lenders that are supportive of the scheme.
If an applicant is applying individually, they cannot have earned more than $125,000 in FY23 (1 July 2022 – 30 June 2023) and for joint applicants to utilise the scheme, they must’ve earned less than $200,000 combined in FY23. All income is verified from the applicant’s notice of assessment (NOA) for FY23.
Because there are only 35,000 places available nationally (plus 10,000 in the regions) we recommended potential applicants reach out sooner rather than later, as early demand has been strong.
What Type of Property Can Be Bought under the FHBG?
The property must be considered ‘residential’, with the following property types eligible:
- 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.
FHBG Purchase Scenario Examples
The numbers can be hard to wrap your head around, but that’s why we’re here! We’ve provided a summary of the total cash contribution required and related repayments for different purchase scenarios available under the scheme.
$600,000 Purchase at 95% LVR under First Home Guarantee Scheme
Purchase Price | $600,000 |
Stamp Duty | $0 |
Land Transfer and Mortgage Fee | $1,630 |
Estimated Conveyancer Fees | $1,500 |
Estimated Lender Fees | $1,000 |
Total Funds Required | $604,130 |
Loan Amount (80% LVR) | $480,000 |
Plus First Home Loan Guarantee Scheme (15%) | $90,000 |
Total Loan Amount (95% LVR) | $570,000 |
Cash Contribution Required | $34,130 |
$700,000 Purchase at 95% LVR under First Home Guarantee Scheme
Purchase Price | $700,000 |
Stamp Duty | $24713.33 |
Land Transfer and Mortgage Fee | $1,865 |
Estimated Conveyancer Fees | $1,500 |
Estimated Lender Fees | $1,000 |
Total Funds Required | $729,078.33 |
Loan Amount (80% LVR) | $560,000 |
Plus First Home Loan Guarantee Scheme (15%) | $105,000 |
Total Loan Amount (95% LVR) | $665,000 |
Cash Contribution Required | $64,078.33 |
$800,000 Purchase at 95% LVR under First Home Guarantee Scheme
Purchase Price | $800,000 |
Stamp Duty | $43,070 |
Land Transfer and Mortgage Fee | $2,100 |
Estimated Conveyancer Fees | $1,500 |
Estimated Lender Fees | $1,000 |
Total Funds Required | $847,670 |
Loan Amount (80% LVR) | $640,000 |
Plus First Home Loan Guarantee Scheme (15%) | $120,000 |
Total Loan Amount (95% LVR) | $760,000 |
Cash Contribution Required | $87,670 |
Monthly Repayments at Each Level
| Purchase Price | Loan Amount | Rate | Repayment |
|---|---|---|---|
$600,000.00 | $570,000.00 | 5.79% | $3,340.86 |
$650,000.00 | $617,500.00 | 5.79% | $3,619.27 |
$700,000.00 | $665,000.00 | 5.79% | $3,897.67 |
$750,000.00 | $712,500.00 | 5.79% | $4,176.08 |
$800,000.00 | $760,000.00 | 5.79% | $4,454.48 |
Speak to our Mortgage Brokers about the FHBG
Before entering into any home loan agreement, home buyers should talk with a mortgage broker about the potential implications of changing interest rates or house prices in relation to their individual circumstances. Our finance team can help you determine your borrowing capacity and explain what your repayments will look like under the First Home Guarantee scheme.
As an authorised representative of most of the Participating Lenders, we’re your first port of call if you’re considering taking advantage of the scheme. Get in touch today and we’ll arrange a free consultation with a mortgage broker to discuss your first home purchase!
