The Complete First Home Buyer Guide in Australia (Grants, Schemes & Deposit Options)
Buying your first home in Australia can feel complicated. Between deposits, borrowing capacity, government grants, and lender rules, many buyers aren’t sure what help is actually available.
The good news is there are several government grants and schemes designed specifically for first home buyers that can dramatically reduce the deposit required or help with upfront costs.
This guide explains the major first home buyer programs in Australia, how they work, and what the eligibility rules look like today.
The First Home Guarantee (Buy With a 5% Deposit)
The First Home Guarantee (FHBG) is the main federal government scheme helping Australians buy their first home.
Under the scheme, the government guarantees up to 15% of the property value, allowing buyers to purchase with just a 5% deposit without paying Lenders Mortgage Insurance (LMI).
Normally buyers need a 20% deposit to avoid LMI. With this scheme, the government effectively acts as the guarantor for the missing portion.
Key Benefits
• Minimum deposit of 5%
• No Lenders Mortgage Insurance
• Available for new or existing homes
• Can be used for houses, townhouses, or apartments
Major Changes to the Scheme (2025 Expansion)
The scheme was significantly expanded from 1 October 2025, making it far more accessible.
Key changes include:
• No income caps for first home buyers
• Unlimited places available
• Higher property price caps across Australia
• Easier access for buyers in regional areas
Previously the scheme had income limits of:
• $125,000 for singles
• $200,000 for couples
These limits were removed in the expansion.
Property Price Caps for the First Home Guarantee
To qualify for the First Home Guarantee scheme, the property price must fall under the government price cap for the area where you're buying.
These caps are designed to reflect typical property prices in different markets across Australia.
New South Wales
Sydney and major regional centres:
Up to $1,500,000
Other areas of NSW:
Up to $800,000
Victoria
Melbourne and major regional centres:
Up to $950,000
Other areas of Victoria:
Up to $650,000
Queensland
Brisbane and major regional centres:
Up to $1,000,000
Other areas of Queensland:
Up to $700,000
Western Australia
Perth:
Up to $850,000
Other areas of WA:
Up to $600,000
South Australia
Adelaide:
Up to $900,000
Other areas of SA:
Up to $500,000
Tasmania
Hobart:
Up to $700,000
Other areas of Tasmania:
Up to $550,000
Australian Capital Territory
Up to $1,000,000
Northern Territory
Up to $600,000
These caps are designed to reflect average property prices in each market.
For example, buyers in Sydney can now purchase properties up to $1.5 million under the scheme.
Understanding how much you can borrow is one of the first steps when buying property. Read our guide: How Much Can I Borrow for a Home Loan in Australia?
How Much Deposit You Need
The minimum deposit under the First Home Guarantee is 5% of the property value.
Example:
Property price: $700,000
Minimum deposit: $35,000
Without the scheme, buyers would typically need:
Deposit to avoid LMI: $140,000
That means the scheme can significantly reduce the amount of savings required to enter the market.
You can read more about deposit strategies in our guide: How Much Deposit Do You Really Need to Buy a Home in Australia?
How Much Deposit You Can Keep
One important nuance many buyers don’t realise is that lender policy and scheme rules are different.
Government Scheme Requirement
The government only requires a minimum 5% deposit.
Lender Policy
Individual lenders may still require buyers to show:
• Genuine savings
• A small financial buffer after settlement
• Proof of consistent savings
Many lenders prefer buyers to keep some savings after the deposit and purchase costs, rather than contributing every dollar toward the purchase.
A broker can help structure this correctly.
Which Lenders Participate in the Scheme
The First Home Guarantee is not available with every lender.
Currently there are 30+ participating lenders, including:
Major banks
• Commonwealth Bank
• Bendigo Bank
• Bank of Melbourne
• BankSA
• NAB
• ANZ
Regional and specialist lenders
• Great Southern Bank
• Beyond Bank
• Auswide Bank
• Gateway Bank
• Defence Bank
• Australian Mutual Bank
Credit unions and mutual banks also participate.
Each lender still applies their own credit policies, borrowing calculations, and servicing rules.
Family Home Guarantee (2% Deposit Option)
There is also a separate scheme called the Family Home Guarantee, designed for single parents.
Under this program:
• Minimum deposit: 2%
• No Lenders Mortgage Insurance
• Government guarantees up to 18% of the loan
This scheme is intended to help single parents enter the property market earlier.
First Home Owner Grant (FHOG)
Separate from the federal schemes, each Australian state offers a First Home Owner Grant (FHOG).
This is a cash payment designed to support buyers purchasing or building a new home.
Typical grant amounts include:
• $10,000 in many states including Victoria
• Up to $15,000 in some states such as South Australia
• Higher grants in certain regional areas
However, the grant usually only applies to:
• Newly built homes
• House and land packages
• Substantially renovated properties
Existing homes typically do not qualify for the FHOG.
Property Value Limits for FHOG
The First Home Owner Grant also has property value limits.
For example:
• In some states the property must be $750,000 or less to qualify.
These limits vary between states and territories.
Can You Combine Grants and Schemes?
Yes.
Many first home buyers combine multiple forms of assistance, for example:
• First Home Guarantee (5% deposit)
• First Home Owner Grant
• Stamp duty concessions
This combination can dramatically reduce upfront costs.
Other Costs First Home Buyers Should Plan For
Even with grants and schemes, buyers still need to budget for additional costs such as:
• Stamp duty (depending on state exemptions)
• Conveyancing fees
• Building and pest inspections
• Loan application costs
• Moving expenses
Understanding the full purchase cost is critical before buying.
In addition to the deposit, buyers should plan for several additional costs. Our guide explains these in detail: Hidden Costs When Buying a Property in Australia.
Final Thoughts
Government schemes have made it significantly easier for Australians to buy their first home.
With the expanded First Home Guarantee, many buyers can now purchase with just a 5% deposit and no LMI, while grants and stamp duty concessions can further reduce upfront costs.
However, lender policies, borrowing capacity, and scheme eligibility can vary widely between lenders.
Understanding these differences early can make the process much smoother.
Need Help Buying Your First Home?
At Echidna Equity, we help first home buyers understand:
• Which government schemes they qualify for
• How much deposit they actually need
• Which lenders work best for their situation
If you’re planning to buy your first home, feel free to reach out.