First Home Guarantee Scheme

First Home Guarantee (FHG) – Key Points

The government is bringing forward its plan, so that from 1 October 2025 all eligible first home buyers will be able to access the First Home Guarantee scheme with only a 5% deposit.

What is the First Home Guarantee (FHG)?

• The FHG allows eligible first home buyers to purchase a property with a deposit as low as 5% without paying Lenders Mortgage Insurance (LMI).
• The government provides a guarantee to the lender, making it easier for first home buyers to enter the property market.
• Applies to both new and existing residential properties.

Key Changes from 1 October 2025

• Deposit as low as 5% with no LMI
• No income caps – available to all eligible first home buyers
• Unlimited places – no annual limit on participants
• Property price caps have been increased across all major capital cities

New Property Price Caps (Effective 1 October 2025)

Note: For new builds with vacant land and separate building contracts, the combined land purchase price and build cost must be equal to or below the relevant price cap.

Example – $700,000 Property in Melbourne

• Deposit required: $35,000 (5%)
• Loan amount: $665,000
• No LMI payable (saving approx. $25,000–$30,000)

What Properties Are Eligible?

• Existing homes (house, unit, townhouse, apartment)
• New builds – house & land packages, off-the-plan, or vacant land with a building contract
• Must be for owner-occupation (not an investment property)

Other Victorian / State Support (in addition to FHG)

• First Home Owner Grant (FHOG): $10,000 for new homes valued up to $750,000
• Stamp Duty Relief:
  • Full exemption for first homes up to $600,000
  • Concessions for homes $600,000–$750,000