Two federal first-home schemes are both operating as at May 2026: the First Home Guarantee (FHG), administered by Housing Australia, and Help to Buy, the shared-equity scheme that opened nationally after the necessary state legislation passed in mid-2025. They solve different problems and, importantly, they can be combined in some scenarios with state-level grants and stamp-duty concessions.
This piece walks through what each scheme does, who qualifies, how they interact, and where the trade-offs sit. It does not cover state-by-state grants in detail (see our state-grant pages on /home-loans for those); it focuses on the federal overlay.
First Home Guarantee: the LMI shortcut
Under the FHG, eligible first home buyers can buy with a deposit as low as 5 per cent of the purchase price without paying Lenders Mortgage Insurance (LMI). The federal government guarantees the portion of the loan between the 5 per cent deposit and the 20 per cent LVR threshold, which would normally trigger LMI of $15,000-$30,000 on a typical owner-occupier loan.
From 1 January 2026, the annual cap on FHG places was removed. There is now no place limit, meaning any eligible applicant who finds a participating lender can access the guarantee. Income caps still apply: $125,000 single, $200,000 couple. Property price caps apply by region (e.g. $1.5m Sydney, $950k Melbourne, $1m Brisbane, $850k Perth, $700k Adelaide; lower in regional and other capitals - check the Housing Australia current table for the exact cap that applies).
Help to Buy: shared equity from the Commonwealth
Help to Buy is a fundamentally different mechanic. The Commonwealth contributes up to 40 per cent of the purchase price of a new home or 30 per cent of an existing home, in exchange for an equity share in the property. The buyer needs as little as a 2 per cent deposit and takes out a smaller loan because the Commonwealth holds the rest of the equity stake.
The advantage: a smaller loan means smaller repayments, which materially improves serviceability at a time when the cash rate sits at 4.35 per cent. The trade-off: the Commonwealth shares in any future capital gain (and loss) on the equity portion. When you sell, you repay the Commonwealth's share at the current market value, not the purchase value. You can also buy out the Commonwealth's stake over time.
Income caps under Help to Buy are tighter than FHG: $90,000 single, $120,000 couple as at the program parameters in force in 2026. Property price caps are also lower, indexed to capital-city medians and updated annually. The scheme has 10,000 places per year under the current settings.
How they interact: three buyer profiles
The schemes solve different constraints, which means the right pick depends on the binding constraint in your case. Below are three worked profiles.
Profile A: high-income couple, deposit-constrained
Two professionals on $175,000 combined, $50,000 deposit saved, looking at $850,000 inner-Brisbane townhouse. They fall inside the FHG income cap ($200,000 couple) but materially outside Help to Buy ($120,000 couple). FHG is the only federal option for them. They put down their 5 per cent ($42,500) deposit, the Commonwealth guarantees the LMI portion, and they take a $807,500 loan at the standard owner-occupier rate. They keep 100 per cent of the equity.
Profile B: median-income single, serviceability-constrained
A single buyer on $85,000 in Adelaide with a $40,000 deposit, eyeing a $560,000 unit. Their borrowing power at 6 per cent serviceability is around $450,000 - too low to buy the unit they want even with the deposit. Under Help to Buy, the Commonwealth could take a 30 per cent equity share ($168,000), the deposit covers 2 per cent ($11,200), and they need to borrow only $380,800 - comfortably within their borrowing capacity. The trade-off: when they sell, the Commonwealth gets 30 per cent of the sale proceeds.
Profile C: couple, qualifies for both, new build
Couple on $115,000 combined, $55,000 deposit, $700,000 house-and-land in Perth. They qualify for both schemes. Help to Buy on a new home is the higher-leverage option: Commonwealth takes 40 per cent ($280,000), they bring 2 per cent deposit ($14,000), borrow $406,000. Repayments are materially lower than under FHG (where they would borrow $665,000), but they give up 40 per cent of future capital gains. For a buyer who expects to stay long-term and prioritise cashflow, Help to Buy wins. For a buyer who expects to upsize within 5-7 years and wants to capture the full appreciation, FHG wins.
State grants and stamp duty: the third leg
Both federal schemes stack with state-level concessions. The First Home Owner Grant (FHOG) varies materially by state and applies only to new builds in most jurisdictions: $10,000 in NSW, $10,000 in QLD (effectively replaced by the lower stamp-duty regime for FHBs), $10,000 in WA, $15,000 in VIC, $15,000 in SA, $15,000 in NT. Stamp-duty concessions are larger and more material in practice: NSW full exemption to $800,000 plus partial to $1m, VIC full exemption to $600,000 plus partial to $750,000, and so on.
Used together, a buyer might be using FHG (federal no-LMI guarantee) + stamp-duty concession (state) + FHOG (state, new-build only) on the same purchase. The combinations get materially better the further you sit from the most expensive capital-city markets.
How to work out which scheme fits you
- Run your borrowing capacity at current owner-occupier P&I rates (around 5.99-6.20 per cent variable as at 21 May 2026). If your borrowing power is comfortably above your target property price, you do not need Help to Buy and FHG is the simpler path.
- If your borrowing capacity is short of your target purchase price by more than 10 per cent, run the Help to Buy maths. The shared-equity portion gets you over the line and gives you 5-15 years of breathing room to buy out the Commonwealth share as your income grows.
- Check the income and property-price caps for both schemes in your state. The Help to Buy caps are tighter and exclude a meaningful slice of buyers who would qualify for FHG.
- Layer state grants and stamp-duty concessions on top. The state-level wins are bigger than most buyers expect, especially for new builds outside the two biggest capital cities.
- Get a serviceability calculation that reflects the actual scheme you intend to use. A broker on a panel that includes both FHG-participating and Help to Buy-participating lenders is materially more useful than one that handles only one.
The catch nobody mentions
Both schemes are lender-dependent. Not every lender on the standard broker panel participates in FHG or Help to Buy, and the participating lender list for each scheme is different. A broker who claims to "compare 50 lenders" but only has access to four FHG-participating lenders is not actually comparing 50 lenders for an FHG-eligible buyer. Ask for the scheme-specific panel before you commit time to an application.