First Home Guarantee 2026: the complete guide

The federal First Home Guarantee (FHG) is the single most material first home buyer benefit in Australia in 2026. The scheme lets eligible first home buyers purchase a home with a deposit as low as 5 per cent without paying Lenders Mortgage Insurance (LMI), saving $20,000-30,000 in upfront cost on a typical purchase. The October 2025 removal of the annual cap made the scheme universally accessible to all eligible applicants for the first time.

This guide walks through how the scheme actually works, who is eligible, the regional property caps, the participating lenders, and how to stack FHG with state-level benefits for the strongest possible first home buyer package.

How the First Home Guarantee actually works

Under the FHG, eligible first home buyers can purchase or build a home with a deposit as low as 5 per cent of the purchase price without paying LMI. The federal government, through Housing Australia, guarantees the portion of the loan between the 5 per cent deposit and the 20 per cent LVR threshold that would normally trigger LMI requirement.

The mechanic is invisible to the borrower at the loan level. The loan still settles, the repayments still apply, the same property is purchased. The difference is that no LMI premium is charged, which removes a $20,000-30,000 cost from the upfront purchase. Over the loan life, the LMI saving compounds because LMI is typically capitalised into the loan balance and accrues interest.

The October 2025 cap removal

Before 1 October 2025, the FHG operated with an annual cap of 35,000 places allocated each financial year. Applications closed once the cap was hit, which typically happened within the first 6 months of each year. Many eligible applicants missed out.

From 1 October 2025, the cap was removed. There is now no place limit; any eligible applicant who finds a participating lender can access the guarantee. The same expansion removed the income caps and lifted the property price caps. This was the most significant change to the scheme since launch and materially increased accessibility for late-year applicants and for borrowers who were previously deterred from applying due to perceived rationing.

Eligibility checklist

To qualify for the FHG, all of the following must apply:

• Australian citizen aged 18 or over (permanent residents are not eligible)
• Genuine first home buyer; you have not previously owned property in Australia
• Intend to live in the property as the principal place of residence (owner-occupier only, not investment)
• Property purchase price within the regional cap
• Loan with a participating lender

There is no income test. The income caps that applied before 1 October 2025 ($125,000 for singles, $200,000 combined for couples) were removed alongside the places cap.

For couple applications, only one applicant needs to be a first home buyer. If you are buying with a partner who has previously owned property, the application can still proceed as long as you (the first home buyer) are on the title and the loan.

Property price caps by region (mid-2026)

The property price caps vary by region. As at mid-2026:

• Sydney metropolitan and regional centres: $1.5 million
• NSW elsewhere: $800,000
• Melbourne metropolitan and regional centres: $950,000
• VIC elsewhere: $650,000
• Brisbane and large regional centres: $1 million
• QLD elsewhere: $700,000
• Perth metropolitan and regional centres: $850,000
• WA elsewhere: $600,000
• Adelaide and large regional centres: $700,000
• SA elsewhere: $500,000
• Hobart and large regional centres: $700,000
• TAS elsewhere: $550,000
• Canberra: $1 million
• Darwin: $600,000
• NT elsewhere: $500,000

The caps are reviewed periodically. Check the current Housing Australia website for the most up-to-date caps before making a property offer that depends on FHG eligibility.

Participating lenders

The full participating lender list is published on the Housing Australia website. As at mid-2026 it includes:

• All four major banks: Commonwealth Bank, Westpac, NAB, ANZ
• Major tier-2 banks: Bendigo Bank, Bank of Queensland, Suncorp, Macquarie Bank
• Customer-owned banks: Newcastle Permanent, IMB Bank, Beyond Bank, Teachers Mutual Bank, Heritage Bank, Police Bank, Defence Bank
• Digital and non-bank lenders: ING Australia, ME Bank, some specialist participants
• Westpac group brands: St.George, Bank of Melbourne, BankSA

The participating lender list extends to dozens of options. The decision of which lender to use within the FHG scheme is the standard home loan choice: rate competitiveness, service, credit policy fit. A broker on the FHG-accredited panel can identify the best lender for your specific file.

Stacking with state benefits

The strongest first home buyer package typically combines FHG with state-level benefits. The state benefits available vary by jurisdiction:

• NSW: First Home Owner Grant ($10,000 for new build), full stamp duty exemption up to $800,000 plus partial concession to $1m
• VIC: First Home Owner Grant ($10,000 for new build), full stamp duty exemption up to $600,000 plus partial concession to $750,000
• QLD: First Home Owner Grant ($30,000 for eligible new builds in 2026), First Home Concession stamp duty exemption up to $700,000 plus partial concession
• WA: First Home Owner Grant ($10,000 for new build), stamp duty exemption up to $450,000 plus partial concession to $600,000
• SA: First Home Owner Grant ($15,000), stamp duty exemption thresholds
• TAS: First Home Owner Grant ($10,000), state concessions
• ACT: Specific FHB stamp duty concessions through the Home Buyer Concession Scheme
• NT: Stamp duty discounts and FHOG variations

The combined federal-plus-state package can be material. For a first home buyer purchasing a $650,000 new build in Victoria, the combined benefit can include: FHG (saves $20,000-25,000 LMI), VIC state stamp duty exemption (saves $32,000 at the $600K threshold), state FHOG ($10,000 for new build). Combined first-year benefit: $62,000-67,000.

FHG versus Help to Buy

The federal government also operates the Help to Buy shared equity scheme, which is a different mechanism. Help to Buy lets the federal government take a 30-40 per cent equity stake in the property, reducing the loan amount the buyer needs to service. The two schemes solve different problems:

• FHG: solves the LMI cost on a low deposit. Buyer retains 100 per cent equity. Best for borrowers who can service the full loan at the buffered rate.
• Help to Buy: solves the serviceability constraint on a smaller loan. Buyer shares equity with the government. Best for borrowers whose buffered borrowing capacity falls short of the property price they need.

For most first home buyers who can service the standard loan at the buffered rate, FHG is the better single-scheme choice because it preserves full equity. For borrowers who cannot service the full loan amount, Help to Buy is the path that actually makes the purchase possible.

The application process

1. Choose a participating lender. Use the Housing Australia participating lender list as the starting point.
2. Apply for pre-approval from the lender. This is a standard home loan pre-approval process; the FHG mechanic does not add separate documentation.
3. The lender confirms FHG eligibility during the pre-approval assessment. The lender submits the FHG application to Housing Australia.
4. Once pre-approval is confirmed, search for property within the regional cap and other eligibility criteria.
5. Make property offer subject to formal loan approval. Settlement proceeds in the standard way; the FHG removes the LMI cost.

The typical FHG application adds 2-4 days to the standard pre-approval process. A broker familiar with FHG can typically navigate the application without the borrower needing to engage directly with Housing Australia.

Frequently asked questions

Related reads

• Help to Buy scheme guide
• FHG plus Help to Buy: how they stack
• FHG unlimited places six months in
• First home buyer guide