First Home Guarantee 2026: the 5% deposit scheme explained
The Australian Government's First Home Guarantee allows eligible buyers to purchase with as little as a 5% deposit — with no Lenders Mortgage Insurance, no income caps, and no waitlist as at 2026. Here is how it works, who qualifies, and how it interacts with new-build stamp duty exemptions and the APRA DTI cap.
What changed from the old scheme
The FHBG has been significantly expanded since its original launch. The key changes as at 2026 are important to understand, particularly if you were previously told you did not qualify.
| Feature | Old rules | 2026 rules |
|---|---|---|
| Income cap (single) | $125,000 pa | Removed |
| Income cap (couple) | $200,000 pa | Removed |
| Annual places | 35,000 per year | Unlimited |
| Waitlist | Yes, often exhausted | No waitlist |
| Minimum deposit | 5% (2% for single parents) | Unchanged |
| LMI waived | Yes | Unchanged |
| NSW price cap | $900,000 (new builds) | $1,500,000 |
Table is indicative. Verify all figures at housingaustralia.gov.au before acting.
How the scheme works
Under the FHBG, the government does not pay part of your deposit — it provides a guarantee to your lender for up to 15% of the purchase price. This means the lender treats your loan as if you had a 20% deposit, avoiding the need for LMI.
You still need to save the minimum deposit (5% or 2% for single parents), pay stamp duty (unless exempt), and meet the lender's normal serviceability and credit requirements. The guarantee is not a cash benefit — it is a risk mitigation instrument between the government and the lender.
How savings stack for a new build in Western Sydney
- 5% deposit — no LMI (saving typically $15,000–$30,000+ depending on purchase price and LVR)
- New home stamp duty exemption (NSW new builds under $800k — verify at revenue.nsw.gov.au)
- APRA DTI cap exemption for construction loans — bypasses the 6x flow limit
- Interest only repayments during build — lower cashflow pressure while renting
Free — no obligation
Want to know if the FHBG applies to your situation? Talk to a broker.
Check your indicative eligibility
Indicative eligibility checker
This checker is illustrative only — not a determination of eligibility or a credit assessment. Verify at housingaustralia.gov.au. Data as at June 2026.
Free — no obligation
Check if the First Home Guarantee applies to your specific situation.
Interaction with NSW stamp duty exemptions
In NSW as at 2026, first home buyers purchasing a new home valued at or below $800,000 may be fully exempt from stamp duty. A concession applies for new homes between $800,000 and $1,000,000. For established homes, the exemption threshold is lower. These thresholds change — verify the current rates at revenue.nsw.gov.au.
A house and land package in areas like Leppington, Austral, Marsden Park, or Box Hill — typically priced in the $600,000–$900,000 range depending on block size and spec — may qualify for both the stamp duty exemption and the FHBG simultaneously, representing a material reduction in upfront costs.
House and land packages in Western Sydney
Suburb-specific guides for buying and financing a house and land package in the South-West and North-West growth corridors:
Related guides
Frequently asked questions
General advice warning: This information is general in nature and does not constitute personal financial or credit advice. Figures shown are indicative only — not guaranteed. You should consider your own circumstances and consult a qualified mortgage broker or financial adviser before acting on any information on this page. Michael Short (Credit Representative 468493) operates under Australian Credit Licence 389328.