A Comprehensive Guide to the First Home Guarantee Scheme 2023

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Buying your first home is an exciting life milestone, yet it comes with its own set of challenges. The financial barriers associated with high deposits and additional costs like Lenders Mortgage Insurance (LMI) can often discourage potential first home buyers. To address this, the Australian government have introduced initiatives like the First Home Guarantee Scheme to support qualifying first home buyers in purchasing a home sooner. This program is part of a federal government’s Home Guarantee Scheme, which also includes Family Home Guarantee for single parents and Regional First Home Buyer Guarantee.


What is the First Home Guarantee Scheme?

The First Home Guarantee Scheme is a government initiative aimed at assisting first-home buyers in realizing their dreams of homeownership. With a total of 35,000 First Home Guarantee positions up for grabs this financial year, this scheme allows eligible buyers to secure a home loan with a deposit as low as 5%, while avoiding the burden of Lenders Mortgage Insurance (LMI). By acting as the mortgage insurer, the government provides a guarantee of 15% of the property value. This reduces the risk for lenders, much like it would if the borrower had actually provided a deposit of 20%. 


Eligibility Criteria for the First Home Guarantee 2023 – Who can apply?

The eligibility criteria for joint application have been expanded this year. In the past, only married or de-facto couples were able to apply jointly. However, starting in July 2023, any two eligible individuals, including friends or family members, can apply together.


To qualify for the First Home Guarantee Scheme, applicants must meet the following criteria:


1. Deposit: A minimum deposit of 5% is required, accumulated through genuine savings or approved sources.


2. Residency: Applicants must be Australian citizens or permanent residents aged 18 or above.


3. Income: Single first-home buyers with annual incomes up to $125,000 and couples with combined incomes up to $200,000 are eligible.  These income figures will be based on the previous financial year. If you would like to apply for this year, your income will be based on the Notice Of Assessment (NOA) from the 2022/23 Financial year.


4. Property Type: Eligible properties include existing houses, townhouses, apartments, house and land packages, vacant land with a construction contract, and off-the-plan properties.


5. Intention to Reside: Buyers must intend to move in within six months of owning and use the property as their primary place of residence till their home loan has a guarantee under the Scheme.


6. Ownership History: Applicants should be first-home buyers or individuals who haven't owned property in the last 10 years.


Property Price caps FY 2022-23

The First Home Guarantee Scheme has maximum prices for properties you can buy depending on where the property is located. You can find the price limits in the tables below.


Capital City and Regional Centre

Rest of State

























* Regional centres are Newcastle and Lake Macquarie, Illawarra, Geelong, Gold Coast and Sunshine Coast.


Is it necessary for my deposit to be genuine savings?

Most lenders expect your deposit to be saved over time, which is called genuine savings. So, in most cases, your deposit should be genuine savings to qualify for the First Home Guarantee. However, if you are currently renting, then many lenders do consider paid rent or your rental history as proof of genuine savings.


What are the benefits of the First Home Guarantee Scheme?

LMI Savings: You could potentially save tens of thousands of dollars over the course of your loan by not having to pay LMI. For e.g.: If you were buying a house in Victoria (capital city or regional centre) for $800,000, making a 5% deposit, then you would have to pay an LMI of $33,072, which you can easily save if you apply through First Home Guarantee Scheme. 

Accelerated Homeownership: The scheme enables buyers to enter the property market with a smaller deposit, making homeownership more accessible. With a lower required deposit, buyers can achieve their homeownership goals sooner than through traditional methods.

Synergy with Other Programs: The scheme can be combined with other government programs like the First Home Super Saver Scheme, stamp duty concessions and state-specific grants.


Applying for the Scheme

To apply for the First Home Guarantee Scheme, prospective buyers can either directly approach participating lenders or seek assistance from mortgage brokers. The National Housing Finance and Investment Corporation (NHFIC) does not accept direct applications. During the application process, lenders assess eligibility factors alongside standard home loan considerations such as credit checks and serviceability.

If you want to take the first steps towards homeownership, contact the Loan Concern Broker today for personalized guidance on your eligibility and the road ahead.


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